Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013. More information about Business of Software - www.BusinessofSoftware.org

1. Pricing Isn’t Rocket Science --It Just Takes Some Work
and time
and teamwork
and judgment
and experience
and luck
233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330

3. The Ethics of Garage-Sale Arbitrage
Is it ethical to buy something at a yard sale or flea market
at the seller’s asking price, if you know the value of the item to
be significantly higher than what is being asked because the
seller didn’t do their research?
Should you say anything to the seller?
The Ethicist, New York Times Magazine

4. The Ethics of Buying Software Licenses
Is it ethical to buy software from a software sales rep
at the seller’s asking price, if you know the value of the item to
be significantly higher than what is being asked because the
seller didn’t do their research?
Should you say anything to the seller now?

5. Wrong Price
Right Price
Pricing That Works

6. Pricing That Works
Market
Stage
Target
Customer
Offering
Your
Economics
Value
Delivered

7. Pricing Works Better When You …
• Look Beyond Price Level
• Focus on Right Customer
• Manage Perception of Value
• Have Good Processes

8. Level
Look Beyond Price Level
Customer
Perception
Process

9. Level
Focus on Right Customer
Customer
Perception
Process

10. Level
Customer
Manage Perception of Value
Perception
Process
Economic Drivers
Revenue
Cost
Other Considerations
Implementation
Timing
Risk

11. Manage Perception of Risk
+ € 1,000
€0
- € 1,000
€0
€0
€ 1,000
- € 500
+ € 500
Expected
Value = € 500
Expected
Value = € 500
Would you flip a coin?
Pain (Loss) > Pleasure (Gain)

12. Manage Perception of Value
• Loss aversion
• Anchor high
• Compromise
• Herd instinct

13. Manage Perception of Value
Technology  Value
“Technology means nothing unless it enables
a differentiated customer experience.
Nobody goes into a restaurant because it has
a mobile app.”
CEO Panera Bread

14. Level
Have Good Processes
Customer
Perception
Process

15. Have Good Processes
Bundles
Incentives
Deliverables
Amount
Metric
Incentives
Terms
Bundles
Deliverables
Terms
Deliverables
Metric
Packages
Amount

16. To-Do List
• Look Beyond Price Level
• Focus on Right Customer
• Manage Perception of Value
• Have Good Processes

17. To Help With Your To-Do List…
http://downloads.businessofsoftware.org/dontjustrollthedice.pdf

19. Thanks!
Jim Geisman
jimg@softwarepricing.com
+508 - 647 - 0330
233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330