T Minus 22 Days – Confidence Building
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Home Document Manager is coming along nicely. I’m very confident of
getting the application to a stable 1.0 version by then end of the
month, although I’m a little less confident of getting the other stuff,
help, web site, e-commerce up. But those might just have to be just
good enough, rather than as good as I would like for the 1st of August.
I’ve just read a post on Eric Sink’s blog about pricing micro ISV products, and it’s thrown my ideas on pricing a little in the air. Is $49 too cheap? My only real competitor is Nuance’s PaperPort, and PaperPort pro, which seem to retail for about $100 and $200 respectively.
I think I might be falling into the trap of differentiating on price, I’m not sure.
I was particularly heartened by the reviews of PaperPort and PaperPort Pro on Amazon,
which are amongst the worst I’ve seen. Several of the reviewers say
that Nuance have very little reason to improve PaperPort because
there’s no competition. Well that’s about to change :¬) Have a look:
They’ve set the bar quite low.
What would you say the price of Home Document Manager should be?
I think you probably are falling into that trap. There are a few
things to consider here, the first being that you are offering a better
product – which makes it easy to price it in the same range as the
competition. $149 sounds good to me here.
However, what happens then is that you leave the door open for some
to bring in a lower priced program that
“upstart” (such as yourself
offers equal or greater functionality than yours, because that
“upstart” is caught in the same trap.
If it were me I would differentiate on *features* and follow
Nuance’s lead by creating a more limited-functonality edition priced at
$49 which will firewall out the competition. Perhaps a single-user
version, vs. a higher priced enterprise version? The only “gotcha” in
the $49 firewall version is that you need to promote it every bit as
heavily as the full version to get the full firewalling effect.
As I write I think $79/179 or $99/199 are better since your product is stronger than theirs.
Sounds like a great product and one I am planning to investigate for
myself in the near future – glad I didn’t get stuck with PaperPort! I
look forward to the demo.
I suspect $49 is too low, the risk is people will assume it is no good because it is so cheap.
Well we’ve emailed about this just last week
but I think you’re
underestimating the amount of competition. Granted, it’s quite hard to
find the home-focused products, but there are quite a number of them -
although most are bad and hard to find. Since my post on BoS I’ve
re-tried Docsvault version 3 (released just last week) and I quite like
it. The ‘home’ version is old and doesn’t have many features but it’s
free. The ‘pro’ version is $80 with another $50 charge for the ocr
module. I haven’t tried Paperport, I will soon. I think your main
problem is going to be just to be found by customers – searching for
‘document management system’ and ’scanned files software’ seemed to
produce completely different search results, as if they were two
different markets, but from how I see it’s just two descriptions for
the same thing. Maybe I just haven’t found the right words to find the
home-focused document management system.
Anyway, still looking forward to your demo
Thanks for the input guys. I’m starting to lose track of the number
of times I read micro ISVers writing things like “yea, we doubled the
price and it made no difference to the number sold”. The lesson should
sink in at some point.
If you are selling to consumers, then alot of research which was
done at Logitech on price points suggest that below $100 you don’t have
to consult your spouse (i.e. $99). So exponentially higher unit sales
were made. I can send you the info if you like.
Take care,
-j