John: Hey, John Sonmez from simpleprogrammer.com.
I got this question about pricing services.
This question is from Francisco and he says, “Hi John, hope you could give me some advice
on this.
Right now I’m the project manager of an ongoing software product.
As it is for a big company, the prize was big as well.
However, we, the team, are going to deliver a great product with many features.”
I think he meant—I think you mean price, “The price was big as well” that makes
more sense.
“The thing is a business woman approached me asking me for a price tag for a similar
software solution, very similar indeed.
Of course she offered me less money than the big company but it is a good amount.
How can I give her a good price but without giving all the features we offered to the
big company?
There are many similar features one could think of.
The big company’s software as a foundation for the software for the business woman, however,
I’d like to make a clear relation between the features this solution should have or
should I just give her a great solution just for the sake of making good software?
Thank you for your time and sharing your knowledge and your emails and YouTube channel.
It’s very much appreciated, best regards, Francisco.”
Francisco, I would say just give her the whole thing, give her all the features regardless
of the lower price because your effort is going to be the same.
Utilize that big company project to build other projects for cheaper.
You might package this differently like if you’re selling the software as a kind of
off the shelf solution.
If you go out and you decide that you’re going to have the enterprise version and then
the smaller version then obviously you’re going to price it differently.
You’re going to have features that are going to be different.
But if you’re looking one-on-one with customers I don’t see any reason to give a substandard
version of the software.
If you have all the features and bells and whistles and you know that this a smaller
business so the price is less, you might as well just exceed expectations and give an
excellent value for the price that this company is paying for.
I don’t really see any value in holding back.
You might think, “Well, what if this bigger company gets word that I sold this to the
smaller company with the same features for less money?”
I think that’s pretty unrealistic worry.
You can always have some kind of disclosure signed where they’re making the price confidential
in that case, but in general I don’t think that’s going to be a problem.
It doesn’t have to—I think a lot of companies do this today, right?
In enterprise sales, it’s not advertised but I’m sure that you’re going to get
charged a much bigger price if you’re a large company than you are if you’re a small
company for a lot of software.
That happens a lot.
Heck, my accountant does that to me I’m sure.
I’m sure she charges me more money for the same work as someone who makes less money.
I can’t really argue that.
I’m not super pissed off and I could be, I suppose, but it’s just a fact of life.
I think most companies, most business people understand that that the bigger they’re
going to get charged more.
Heck, look at real estate.
If you go and you buy a house typically real estate agents you pay a 2 or 3% commission.
It doesn’t matter if you buy a $10-million house or a $100,000 house they still charge
you the 2 or 3%.
In one case they’re doing the same amount of work essentially but in one case they’re
making a whole lot more money based on the value of the thing, based on basically your
income.
That’s going to happen in the business world.
I wouldn’t be concerned about it.
If you shortchange this person and deliver less than—I don’t see any good potential
for that.
what’s going to happen?
What’s the best good thing that can happen?
It didn’t cause you any—it might have caused you even more time to cut features
out, right?
If you over deliver I think there’s a benefit.
Maybe she spreads the word.
Maybe this business ends up being a good testimony and hooks you some big client that pays you
a huge amount of money.
I would go with the full version.
I wouldn’t be too concerned about this.
Everything is not like totally fair on the line.
I think a lot of times, like I said, in the business world prices are based on what someone
can afford and not on the value that is given especially in software where the price is
so subjective.
Anyway, hopefully that helps you out.
If you’ve got a question for me email me at john@simpleprogrammer.com and if you like
this video definitely subscribe.
Take care.