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Re:Ask HN: Your prices are too high by tudorghr on Wednesday August 20, 2014 @07:04AM (#8201829)
Without knowing what industry you operate in - Except if making a commodity product/service and have a cost advantage to competition (i assume you are not) you need to price @ and consequentially sell value not cost.

My experience in selling value: You need to: 1) Understand and quantify opportunity cost for client in not working with you (Difference in dollar amount profit for client between working with you and alternative options: 1)working with competitor, 2)using alternate solution for the same problem - status quo solution if your product/service involves an operational change)- the value of your product is that number: If positive be explicit about it.

2) Sell a relationship not a service/product ie: make the person in front of you feel better off in working with you than not through long term benefits. To do this understand their own KPIs other than profit (first point on that) and issues (time spent doing stuff they or their staff hate doing) in doing their job - make them understand that a relationship with you will make their job easier based on how you improve KPIs and/or eliminate issues in the long run.

Other points: - Listen and adapt to every client - none two are the same - first question you should ask yourself: "Who do I have in front of me" - you will have a few dozens types of client behaviors not more - adapt accordingly to address points 1 and 2.

- Don't rush sales - understand the two points above very well and go through them with each of your clients patiently.

- Be in a position to walk away - do not allow one client to represent more that 30% of your business - if that happens seek to diversify client base fast. Very difficult to negotiate pricing with a client when they are aware of the fact that loosing their business will kill your treasury.

- Above all else, be empathic - people do business with people they like. All else being equal, a decider will always choose to buy from guy he feels he can have a beer with after work.

Re:Ask HN: Your prices are too high by notahacker on Thursday August 21, 2014 @02:29PM (#8208853)
Quantifying the opportunity cost for the competitor cannot be stressed enough

After you've calculated that (even down to estimates of the man hours they'll save multiplied by how much those staff members cost), it helps to point out you're actually spending in the region of XXX per annum creating this software that's saving them YYY in relation to the alternative. If YYY is significantly greater than the cost of your product the buying it should be a no-brainer (if it usually isn't then maybe you are too expensive...) but that doesn't mean they won't try to negotiate, especially if they think they're being gouged and understand software has [near] zero marginal cost

That's where pointing out that XXX reassuringly higher than the price of the product is useful in establishing your price point isn't merely aspirational, and cheaper alternatives aren't likely to emerge from the woodwork any time soon.