Tuesday 13 May 2008

Cost is not the only measure of value

My feeling is that, in general, most people realise that if they want to buy a product that they will use again and again - perhaps for years - cost isn't really a deciding factor. More than one customer has told me this.

As stated in an earlier post, I think writing a non-trivial, valuable program is the key. These days, lots of software is cheap and there are lots of big companies allowing people to use software either for free or for a trial period. The distinction between shareware and fully-fledged commerical software is becoming increasingly blurred.

If you sell shareware you have to fill a niche and still offer a quality offering. One niche might be an "easy-to-use" version of a more complicated package. Note the key phrase here is "easy-to-use", not trivial or cheap. People will pay to have complication taken away from them if the software offering still does an effective job.

A number of times in the past I bought things because they were cheap, e.g. a cheap power tool like a battery-powered drill. Every time I've done this I've regretted it. Nowadays I spend a bit more to get a product I know I can live with and continue to use for more than a couple of days.

One selling point for small software development companies is that they can offer better support than a larger company. Often, large companies are unresponsive to support calls or can't hold a meaningful discussion with a potential customer. With small companies there are few barriers between the company owner and the customer. Both sides can benefit from this - the customer can make his case and get a decision quickly.

When setting a price for a software product always bear in mind that you should be operating as a business. Businesses should make a profit. Don't charge so little that you are literally working for peanuts. If a business's products are too cheap, some customers may believe that the since the company does not value their own products why should they.

by ML

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