Product Nation / ISpirt, the new forum for nurturing software product startups in India, has an interesting article by Pune based serial entrepreneur Shirish Deodhar on Product Pricing, titled The biggest mistake companies make is to fix the price based on their costs
Here are some interesting excerpts:
Ideal first clients (‘anchors’) are strategically important for their brand value or volume of business. Signing up a well-known company becomes a great validation of the product. Pricing should not stand in the way of closing such deals.
If you are getting clients easily, without significant discounting, then your product is probably priced too low. Conversely, if most prospects are not signing up, look for root cause. It may not be the cost – the problem may be in the product, how you sell, or which customers you are pitching to.
Read the full article