Found+READ: Comments on stories by Jeff Curie

Emile Bourquin — Mon, 04 Jun 2007 15:21:19 GMT

Joel Spolsky gets into this (and other related subjects) at http://www.joelonsoftware.com/articles/CamelsandRubberDuc…

Adam Davis — Fri, 01 Jun 2007 15:48:28 GMT

It’s a difficult question, with no one good answer. The bottom line is “what the market will bear.”

What does your market research tell you? Do the differences between your competitor suggest a pricing strategy? It may be hard to base it on their’s, but it may be easier than doing the real work yourself.

If the product is in a beta stage, you can do some surveys and research yourself. Find a bunch of beta testers in your target market (ideally a wide range) and have them test your product, and answer questions about pricing, usability, etc.

If your product is ready to roll, you can place a small ad with a low price in the back of a trade magazine and gauge the response. If you resize the ad and change the price over the next few issues you can gain a fairly accurate model based on ad size/location and price (don’t change the ad, otherwise you have too many variables – but do change the size and location since you may not have experience with typical response in that magazine).

If it’s a physical product, it’s fairly easy to give a starting price – your margin, assuming a direct sale (no middlemen) should be between 40-60%. Go up if you expect retailers to take a big chunk, go down if you expect most sales to be direct or low overhead. You might price it higher if your customers gain a huge benefit from it, and lower if it’s practically trivial for a competitor to duplicate.

Keep in mind that you don’t have to set your price in stone. Pick a price, and then move up or down as needed. Down is easy with coupons, specials, sales, etc. Up is not difficult, although it may seem to be. A lot of companies overprice their product at the start (ie, choose the ideal high-profit price) and then have an “introductory deal” to gauge interest. Then it’s easy to move up (the deal expires, sold out, etc) and easy to move down (demand was so great, we’re keeping the price!)

-Adam

Blue Voter — Tue, 15 May 2007 00:18:34 GMT

I hate to nitpick, but the credibility of your opinion drops sharply for me when you don’t correctly spell the plural of “shoe” as “shoes”.

Howard Kaplan — Tue, 08 May 2007 17:09:27 GMT

Jeff-

You’re preaching to the choir on putting customer-centricity 1st and foremost in your marketing strategy. I recognize it’s far more difficult to do what you did (come out first, and write the article) than what I’m about to (stand beside it and criticize ;) but I have to mention- did you realize you described visitors/customers/people as USERS a total of 15 times? As a marketer, I’ll wonder aloud how many positive associations to being labeled a *user* exist.

The difference between users (of say, a tool) and people (who makeup the audience, of say, a community) is one of motivation. You’ve no doubt heard the famous, people don’t buy drills, they need holes. Sure improving the feature set should increase market-share, per se, but in my experience is not usually following your advice of aiming to return the most bang for your buck.

Again, I agree with a lot of your solid points- take a walk in the audience’s shoes, expect to keep learning about them (by measuring *what they do* not what *they say they will do*), and adjust your resources accordingly. I’ll simply add I believe there’s a more scientific way to do this than just the principles you’ve laid out… but perhaps that’s a subject for a different article. Thanks for taking the harder spot, and putting something out there for the community to comment on.

Jeff Scott — Fri, 04 May 2007 19:22:59 GMT

Great article! Helps to clarify a few strategy points that tend to get lost in the shuffle. Rethinking partner relationships and adding viral initiatives can expose a number of new ideas or approaches!

Shan Haq — Thu, 03 May 2007 21:29:07 GMT

Makes a lot of sense. Agree that there are a lot of useful points regarding rethinking a current strategy.

Alan McCann — Thu, 03 May 2007 17:09:44 GMT

Very practical advice – especially if you are either new to thinking strategically about marketing or rethinking current strategy.

Kevin Donaldson — Fri, 04 May 2007 21:35:57 GMT

Great points. I was given the advice once to think about ‘your product/service space’ as an ecosystem. People you think of as competitors could be possible partners and visa versa. Thinking about things in this way also helps you clarify what market you are really in or potentially should be in.

Lally Rementilla — Wed, 02 May 2007 19:11:07 GMT

Very good artile. Simple and straight to the point.

Ravneet Grewal — Wed, 02 May 2007 17:30:49 GMT

A nice writeup. Also is it helpful to look at local possible biz partners and ‘use’ them to market your services? What are the common pitfalls for such scenarios?