Subject: Re: offering pre-purchases
From: "Ben Tilly" <btilly@gmail.com>
Date: Mon, 8 Oct 2007 16:08:39 -0700

On 10/8/07, Thomas Lord <lord@emf.net> wrote:
> Stephen J. Turnbull wrote:
> > La Monte Henry Piggy Yarroll writes:
> >
> >  > The $5000 option in your experiment violates this recommendation. The
> >  > core problem is that prices above $1000 force you into more expensive
> >  > sign-off processes which generally require a more active sales process.
> >
> > Tom's already recognized that (in a different context).  What would
> > you suggest here?
>
> My pricing for pre-purchases has three tiers:
>
>   $175 - individual
>   $499 - corporate, basic
>   $5,000 - corporate, premium
[...]

You haven't addressed the fact that the $5,000 figure violates the
recommendation to not price software between $1,000 and $75,0000.  If
you believe what Joel Spolsky wrote, at most organizations you've just
guaranteed that they can't choose to buy the premium corporate
version.

The problem is simple.  Once a purchase gets too big, it needs a
signoff from higher up in the organization.  Convincing those people
is a lot harder than it is to convince people who can make smaller
purchases.  That requires a more active sales effort.  If you're only
making $5,000 a sale, you can't afford the cost of making a successful
sale.

Cheers,
Ben