Why Software Companies Should Slash Their Prices
Posted on 4th Feb 2010 at 11:09 by Antony Leather with 26 comments
Value. It’s a funny word, and never more so when applied to the IT industry. In fact it’s so tricky to place in this fast-moving online world that it’s usually only spoken of as “perceived” value and that’s about as accurate as we can get. Saying a piece of software - be it a game or operating system - is good value is even more of a convoluted statement.
How do you compare one piece of software to another? Features? Price? The space it takes up on your hard drive? How would you predict how well a product might sell and factor that into the pricing?
For most of us it comes down to cold hard cash and whether we can find something that’s as good or better, for less, or even for free. However, only a handful of companies have grasped the fact that if you lower the price of software enough, sales will skyrocket so high, they’ll make many times more profit than if they priced it twice as much, however popular the software may be.
How do you compare one piece of software to another? Features? Price? The space it takes up on your hard drive? How would you predict how well a product might sell and factor that into the pricing?
For most of us it comes down to cold hard cash and whether we can find something that’s as good or better, for less, or even for free. However, only a handful of companies have grasped the fact that if you lower the price of software enough, sales will skyrocket so high, they’ll make many times more profit than if they priced it twice as much, however popular the software may be.
