pricing

Sheepdogs concert announcement

By all accounts, competing solely on price is a horrible strategy, but it’s also the easiest.  Still, even if you aspire to being a luxury brand with higher than average margins, there seems to be a puzzle there, especially if you seem to be doing all the same things that your competitor is doing.

Here’s an example from the retail world: I shot the above photo on Dec 13 outside The Source in the Toronto Eaton Centre after I attended the free Sheepdogs concert.  Well… I didn’t really attend the concert, though I was at the site at the appointed time, “today” as the sign advertised.

The concert was a week ago.  The sign’s been up for a week now, telling countless people to go to an event that’s over.  Someone at that location had to take that sign and set it up outside the store’s doors every morning, apparently either oblivious or apathetic to the fact that it refers to a specific event on a specific day (then again, it’s always “today” so who knows…)

I asked a staffer about it (it wouldn’t be fair to mention his name, since this had to have been a solid team effort) and he said they had the sign up “for advertising” (the bottom of the banner advertised the launch of the new Nexus phone, also “today”.)

He may have seen my point, and the sign may have been removed after I left; I don’t know and I don’t care, really.  At that moment, The Source lost its status in my mind as trusted advisor, and I’m not silly enough to say I’ll never shop there, but the only circumstance where I see it happening is if they have the lowest price.  They’ve lost any ability to command  premium pricing from me, because they lack the most basic of attention to detail.

I’d venture to say that you wouldn’t see this kind of thing in, say, an Apple store.  If you did, it’d be a blip, and it’d feel really weird, like it clearly shouldn’t have happened.  I had no trouble believing that it happened (even for a week) at The Source.  It’s nothing that they did; it’s all about what they didn’t do.

Oh, and since Bell owns The Source, and I want to be an equal opportunity pointer-outer, here’s a shot from a nearby Black’s, which is owned by rival telecom company Telus:

camera incongruence

The green camera isn’t blue, and neither is the (what is that? rust?) coloured one, though the product tags say they are.  It’s a little thing, and people are willing to compromise and overlook it on a conscious level, but I believe that the incongruence hits the subconscious just the same, and again, there’s no reason to shop for anything other than price in these cases either.

The iPad and the pricing paradox

by Jason on October 20, 2011 · 0 comments

iPad comics

Here’s something weird: the Apple iPad has managed to make cheap things expensive and expensive things cheap.

The expensive part’s easy. True story: I bought my first iPad because I had a meeting and I figured that displaying the pictures on it to the people around the table instead of trying to hook up a projector would make my presentation look, basically, more luxurious.

I didn’t get that deal, but I hold by that premise. More and more, people are using iPads at trade shows to collect email addresses, and even though the things have been out for a year and a half now, it’s still working. In the past, people wanted to touch the new thing. Now that more people have one, it’s a mark of quality that people want to identify with. In public.

But at the same time, the iPad’s made things cheaper. I can buy Kindle books for generally less than the print equivalent, and comics are something I’m watching closely as the major players move to same day digital. Now you’ve got something that used to be available only in print, at (a dwindling number of) collector’s shops, and you can download it and read it right away. The pricing is still being figured out, but in general, it’s cheaper than the print version right out of the gate.

Sure, a print edition might be more collectible, but those of us who studied just a tiny bit of math (and, uh, survived the 90’s collector bubble) have pretty much figured out that editions with print runs over a million aren’t going to be especially rare.

In the meantime, a book that used to sell for $3.99 now sells for $2.99, or $.99, or ultimately the 99 cent sweet spot that used to be reserved for mediocre hamburgers.

On a device that makes my horrible graphic mockups worth 30% more on the average pitch meeting.

Exciting times.

We need PricingCamp

by Jason on July 16, 2008 · 0 comments

I managed to catch Democamp18 last night (or as Joey called it, Democamp “barely legal”) – the place was packed, so I spent the first half just outside the main speaking area with the rest of the crowd behind me steadily escalating the volume of chatter.  The net result was Democamp – audio edition (since I couldn’t see the screen) which devolved into Democamp – Charlie Brown’s teachers edition by the end (since I could hear less and less over the noise – apologies to Kosta Zabashta, whose demo of IRC integration in DrProject was probably interesting, but I saw and heard nothing (looks like there’s a screencast though, I’ll check it out)…

One bit did catch my eyes and ears, which was the Blueprint Requirements Centre.  It’s some kind of Eclipse specification generating tool that gathers requirements and links visuals together so you can end up with some kind of Choose Your Own Adventure demo for the client that links screens to branching possibilities.  I’m totally oversimplifying, and I’m sure it does a lot more than that, but I couldn’t see everything.  People at the front seemed really impressed, enough so that they were saddened by the price, anyway.

It costs $10,000.  Possibly per seat, I couldn’t hear.

From a crowd that skews towards open source, that got a few chuckles.  I heard one person saying something to the effect that they were wasting their time, because nobody in the crowd was likely to be in the market for a $10K product.   That person probably thought that the only thing being demoed was the technology.

Pricing models need more exposure – there’s more to life than freemiums, ad supported, and “we’ll make money on the consulting side.”  These guys found a market that’s used to paying good money for tools (Visual Studio Team System isn’t cheap either) and made something they’d want to buy.  That’s the demo, folks.

Installable software has an edge in market perception – there’s a lot less “how long did it take you to make that” being asked by customers compared to shops that make custom web solutions, where the “how much would it cost me to hire someone to make that” question usually outweighs the “how much value would this give me right now” one they really should be asking.  It can be crushing for smaller companies to have to spend 95% of their time trying to grind out enough billable work to cover overhead and then, you know, when they get to it, find ways to innovate and be really valuable partners with their clients.

Here’s a basic concept to get started: you own what you write.  Let’s face it, you’re probably going to borrow code from past projects when you work on new ones (why write an email address validator every month?), so be up front about it and start positioning yourself as a solution provider instead of outsourced IT.  If the client’s billing department makes you sign a contract that says they own everything you produce, just cross that part out and initial it before you sign it back.  It might be an issue, it might not, but if you don’t at least put the concept out there, you’re letting yourself get robbed of any residual value of the work and anything you’ve done might as well have been in COBOL as far as your next project is considered.