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Pricing Structures: Would you like value with that?

I’ve been getting good and ready to release the first version of BizCandy which I am sure will change a lot in the coming months and years of operation. I know that I will not get the pricing structure correct the first time but that doesn’t mean I am not checking out various options to release with. If you’ve ever released a product or service that is all your own you’ll know that figuring out the pricing can actually be tougher than figuring out the product.

Do you focus on value? Or Discounts? Personally and I have the word of a few others to back me up that say value is the best way to go. Discounts are how traditional businesses seem to get most people in the door to buy. How many times have to been out to a mall and saw a sign “Buy 2 and get one FREE”? Plenty! Because the internet is such a global tool relying on price alone is a game that is hard fought, just look at eBay. If you are a vet of the net you’ve probably learned the hard way or you’ve managed to squeeze a profit out of it. Is there another way? Why yes of course!

Value perception goes back ages but it relies on a different set of tools to sell by. It is seen in the following ways…

• Quality
• ROI
• Intrinsic Value

A big thinker of the 20^th century on “Value” and most importantly “Intrinsic Value” was an economist by the name of Ben Graham who actually took a young apprentice under his wing by the name of Warren Buffett. He wrote a book called “The Intelligent Investor” which at great length discussed value and how to define value and invest in it.

Today value seems to be a rare thing in business unless you’ve got a great deal of wealth. Most companies forget about you before they’ve even finished selling you something. This is part of the reason why I believe that the internet has become a fresh and new way of doing business because it can put the owner and the customer together much more easily then it occurs in the real world.

My goal with BizCandy is a value-oriented option because I personally believe that people and customers need value for their dollar. Probably the easiest way to start developing more value into your business is in the following ways…

• Enhanced Searching and Available Knowledge - Develop a knowledgebase or searchable index for your customers inquiries (Allows them to access 24×7x365 and gives you back time you’d otherwise spend answering the same questions over and over again… value can work both ways! :D)
• Articles - (sure it’s along the same idea as a knowledge base but without searching enabled) you can grow a list of customers and subscribers and provide them with valuable content about your business and the products they’ve bought from you on a monthly basis, etc.
• Price – Offering value doesn’t mean you’ve got to be the cheapest or the most expensive seller on the block. Sometimes the higher the price, the higher the perceived value is behind a service or product. This can save you from bad customers who don’t want to pay in the first place or as I like to say “kick out the punters!”
• By Committee Development – if you are developing a product or service overtime for your business and you develop a loyal following of users allow them to weigh in on the latest revisions. Very few good things ever come from developing in a vacuum and there is no way to anticipate what users and customers will think.

Value Option 1: the Cost per Customer option

My first thought for developing a pricing structure for my service was the Cost per Customer option of selling. My business is business intelligence and more specifically Customer Intelligence focused around existing customer bases of companies and marketing back to these customers and interested parties and collectively building Customer Intelligence for a business.

Besides the need to keep the service simple and straight-forward there is also a need to provide a good amount of value and find more ways to offer value in the coming years to keep people coming back. The easiest way that I think to start in on this is to offer a Cost per Customer option that allows people to buy for a campaign they’d like to launch at existing customers.

BizCandy Proposed Pricing Structure…

Value Option 2: the Monthly Subscription option

I toyed around with offering a monthly subscription rate with discount levels but I felt as though I was cheapening the services I am offering because of the following points…

• Frequency of Actual Usage - What if people aren’t interested in using this service more than a few times a year?
• Do I charge per customer? This wasn’t defined enough in my initial specs so I needed to revise it.
• Too Vague! There wasn’t enough “measurability” built into this pricing structure

Once I have more feedback from marketing efforts after launching I am sure that I pricing structure will change yet again. If you know anything about running your own business you’ll know that things are always changing, you are always learning and for me that’s a big part of the allure.

Lucas