Our September/October 2016 newsletter explores different aspects of the challenge pricing to value: setting the price of your product based on the value that it offers a prospect.
September/October 2016 Newsletter: Pricing to Value
|This blog post summarizes our Sep/Oct 2016 newsletter; you can subscribe to the monthly SKMurphy newsletter using the form at the right.
Pricing is where your product strategy faces the acid test. This month we look at some of of challenges of basing your pricing on the differentiated value that your product or service offers your customers.
Professional service pricing has a very different physics from product pricing: service hours cannot be stockpiled, they arrive one hour every hour, and they have to be delivered synchronously. Even if you are pricing your services based on value and not on time it’s a very different equation from product pricing.
Amazon’s S3 and AWS platforms, and similar on demand storage and computing services, are becoming increasing popular as core infrastructure for software startups. There is a tendency, because the costs are well defined, to base pricing on adding a margin to these services. There are three problems with that.
Here are a couple of rules of thumb you may find helpful in thinking about price, value, and your prospect’s perception of risk.
One of our clients, Taimur Alavi of IVALA design announced to subscribers on Sep-8-2016 that IVALA is joining VIN, the Veterinary Information Network. IVALA has bootstrapped a significant amount of progress and I think that VIN will provide the resources to accelerate the development of innovative applications and their reputation for excellence will encourage the spread of IVALA’s technology into veterinary practice. More information and my take is available at “IVALA Joins Forces with VIN.”
If you are revising your strategic plan or considering longer term exit plans please schedule an office hours session and we can walk around what you can do over the next two to three years to increase the value. Our focus is the founders in B2B startup teams that are bootstrapping. Set whatever agenda you like; it’s an opportunity to have a focused conversation on topics of your choice at no charge.
SKMurphy E-Mail Newsletter
- July/August 2016 Newsletter: Thought Leadership
- May/June 2016 Newsletter: Early Sales
- Mar/Apr 2016 Newsletter: Lead Generation
- December 2015 Newsletter: Retrospectives, Post Mortems, and After Action Reviews
- November 2015 Newsletter: Referrals / Thanksgiving
- October 2015 Newsletter: Customer Discovery Interviews
- September 2015 Newsletter: When and How to Seek Investment
- August 2015 Newsletter: Strategies for a Winning Sales Presentation
- July 2015 Newsletter: Collaborating to Build Better Companies & Teams