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MarketShare, Inc.Wayland, MA 01778Tel: (508) 647-0330
Unique focus since 1987Unique focus since 1987Pricing computer softwarePricing computer software
Practice areasPractice areasValueValue--Driven PricingDriven PricingValueValue--Based SellingBased SellingStrategic DiscountingStrategic Discounting
ResultsResultsImproved financial performanceImproved financial performanceMore value from products & services More value from products & services Increased sales effectivenessIncreased sales effectiveness
AgendaAgendaWhy weWhy we’’re herere hereDefine the offerDefine the offerAttract new customersAttract new customersEncourage unit growthEncourage unit growthStimulate upgrade growthStimulate upgrade growthWrapWrap--upup
Define the offerDefine the offerFocused app, meet needFocused app, meet need
Attract new customersAttract new customersEasy to try, buy, useEasy to try, buy, useEntryEntry--level level product(sproduct(s))
Encourage unit growthEncourage unit growthFair dealFair deal““BeachheadBeachhead”” configurationconfigurationBreadth of appealBreadth of appealReceptivity / contagionReceptivity / contagion
AgendaAgendaWhy weWhy we’’re herere hereDefine the offerDefine the offerAttract new customersAttract new customersEncourage unit growthEncourage unit growthStimulate upgrade growthStimulate upgrade growthWrapWrap--upup
AgendaAgendaWhy weWhy we’’re herere hereDefine the offerDefine the offerAttract new customersAttract new customersEncourage unit growthEncourage unit growthStimulate upgrade growthStimulate upgrade growthWrapWrap--upup
Attractive entryAttractive entry--level productslevel productsHow much value?How much value?At what price?At what price?
Free vs. FeeFree vs. FeeSharp drop off from feeSharp drop off from feeFee means skin in the gameFee means skin in the gameImpulseImpulse-- vs. consideredvs. considered--buy price pointbuy price point
33--5% more revenues or cost savings5% more revenues or cost savings•• ROI of 2X in 3ROI of 2X in 3--5 years5 years•• $25$25--40K/year (=340K/year (=3--5% x $3.6M/4 yrs.)5% x $3.6M/4 yrs.)
Start further down Start further down ““learning curvelearning curve””More mature codeMore mature code55--10% less debugging effort10% less debugging effort
AgendaAgendaWhy weWhy we’’re herere hereDefine the offerDefine the offerAttract new customersAttract new customersEncourage unit growthEncourage unit growthStimulate upgrade growthStimulate upgrade growthWrapWrap--upup
AgendaAgendaWhy weWhy we’’re herere hereDefine the offerDefine the offerAttract new customersAttract new customersEncourage unit growthEncourage unit growthStimulate upgrade growthStimulate upgrade growthWrapWrap--upup
Stimulate Upgrade GrowthNot Just Not Just ““Other Price PointsOther Price Points””
Product planning and packagingProduct planning and packagingCustomer value extraction is keyCustomer value extraction is keyFind price point to deliver value packageFind price point to deliver value package
Opportunity for segmentOpportunity for segment--based pricingbased pricingSpecialized users, usage, capabilitiesSpecialized users, usage, capabilitiesPremium price for premium valuePremium price for premium value
Features vs. addFeatures vs. add--onsonsProduct simplicityProduct simplicityGetting paid for valueGetting paid for value
All price points countAll price points countPrice stepsPrice stepsRelative valueRelative value
Near Entry PriceNear Entry PriceAttract users of entry productAttract users of entry productBig jump to premium productBig jump to premium product
Near Premium PriceNear Premium PriceToo expensive for entry usersToo expensive for entry usersSteal from premium product salesSteal from premium product sales
Easy to modelEasy to modelPrice and value must alignPrice and value must align
Price testing Price testing Mix value delivered with price chargedMix value delivered with price chargedBilling and monitoring systems essentialBilling and monitoring systems essential
AgendaAgendaWhy weWhy we’’re herere hereDefine the offerDefine the offerAttract new customersAttract new customersEncourage unit growthEncourage unit growthStimulate upgrade growthStimulate upgrade growthWrapWrap--upup
WrapWrap--upupIndicators of Pricing SuccessIndicators of Pricing Success
Key business metricsKey business metricsNew customer acquisition rateNew customer acquisition rateInitial and followInitial and follow--on order sizeon order sizeUpgrade rateUpgrade rateViral expansion across or in customersViral expansion across or in customersRetention rateRetention rate