You might be cost-sensitive and look for a good deal when buying tools and infra to support your own projects. But buyers at larger companies aren’t spending their own money, so their thought process is very different.
As long as the price fits in the budget and isn’t an outlier compared to other products they pay for, then it’s not going to be what they focus on. They’ll care much more about quality, trustworthiness, ease of integration, support, and things like that.
That’s why putting your price at the high end of the 'acceptable' range is a win-win. You don’t leave money on the table, and you make an implicit commitment to high quality and good service, which the customers you really want value more than a bargain.
> I GOT A PHONE CALL ONE DAY FROM A FRIEND WHO HAD RECENTLY opened an Indian jewelry store in Arizona. She was giddy with a curious piece of news. Something fascinating had just happened, and she thought that, as a psychologist, I might be able to explain it to her. The story involved a certain allotment of turquoise jewelry she had been having trouble selling. It was the peak of the tourist season, the store was unusually full of customers, the turquoise pieces were of good quality for the prices she was asking; yet they had not sold. My friend had attempted a couple of standard sales tricks to get them moving. She tried calling attention to them by shifting their location to a more central display area; no luck. She even told her sales staff to “push” the items hard, again without success. Finally, the night before leaving on an out-of-town buying trip, she scribbled an exasperated note to her head saleswoman, “Everything in this display case, price × ½,” hoping just to be rid of the offending pieces, even if at a loss. When she returned a few days later, she was not surprised to find that every article had been sold. She was shocked, though, to discover that, because the employee had read the “½” in her scrawled message as a “2,” the entire allotment had sold out at twice the original price!
> It is easy to fault the tourists for their foolish purchase decisions. But a close look offers a kinder view. These were people who had been brought up on the rule “You get what you pay for” and who had seen that rule borne out over and over in their lives. Before long, they had translated the rule to mean “expensive = good.” The “expensive = good” stereotype had worked quite well for them in the past, since normally the price of an item increases along with its worth; a higher price typically reflects higher quality. So when they found themselves in the position of wanting good turquoise jewelry without much knowledge of turquoise, they understandably relied on the old standby feature of cost to determine the jewelry’s merits.
I don't think blanket statements like, you're SAAS product is not expensive enough, work. You should take a tailored approach for what works for you.
Depends on what you mean by "people". For a lot of average consumers/customers, Walmart _isn't_ taken seriously. They're not aware (and don't care) about the incredible supply/logistics magic that Walmart orchestrates behind the scenes. They'll pay a premium to buy stuff elsewhere to avoid the inferior goods connotations associated with Walmart.
The great majority of products created by techies interested in startups are priced much lower than the market will bear, and so their prices should rise.
There definitely is a market out there for the cheapest possible version of something. Usually, turning a profit while moving a product at the cheapest possible price involves maximizing volume, cutting quality to be bare minimum, and ruthlessly eliminating overhead. Like, if there aren't thousands of people on the internet complaining about how crappy your quality is, you probably need to cut it further. I haven't studied it, but I have a hunch that most of the type of people who surf HN for business advice aren't interested in being in a commodity industry where you have to do these things to have a viable business. Or if they find themselves in one, they aren't going to be ruthless enough in the right directions to make it. They better find the right place to get advice for that sort of business, or they won't last long.
I tend to think that they mostly sell cheap crap, that even their brand-name stuff has been renegotiated with the manufacturer so they can sell you a lower quality version in order to have the lowest price. They have definitely done this with some products, and at least attempted it on others.
So yeah, their pricing definitely affects my perception of their products. I avoid Walmart.
Office 365 has the clout of Microsoft behind it. I don't know that the general rule applies as well as it does to some new SaaS company I have never heard of before.
Pricing is not as simple as "charge more" because it increases the premium factor by applying a this costs to much for me so it must be good factor.
There are hundreds of other factors you need to consider and I don't think applying a double my price equals success to your pricing schema always makes sense.
I think you missed the point. Walmart absolutely has negotiated deals in the past for products that appear to be the same but are not. Levi's jeans is one example. They tried to do the same thing with Snapper, as I recall, but were rebuffed.
If that's okay with you, great, you are matching the price of the product with the quality. But as a result of them doing it and not being completely transparent about it, I question what other products they've done the same thing with.
Even Wal-Mart plays on this by stocking name brands here and there.
This is BS.
If you want your customers to take you seriously, seriously solve their pain. One example is charging $1 USD for a song, which at least one company has done and made billions.
Making an offering "expensive" in and of itself neither conveys legitimacy nor value. It only begs potential customers to contemplate the cost/value proposition more critically.
Your pricing is never high enough
If you want your prospects/customers to take you seriously they have to find you expensive. If you seem cheap they will not take you seriously.