How to price Enterprise Software Products

Marketing a product is the most important thing in business. You can not survive if you do not market your product properly. The process of marketing involves many further steps but first of all you need to price your product because pricing plays a pivotal role in marketing the product. Especially the enterprise software products are sold only when they are within the price range of common people. Due to increased awareness and easy availability of software products, people have to choose from a variety of choices and for the same reason, the price of the product determines the buying decision at the end of the day. Therefore, the pricing strategy should be formulated after considering different factors. Here are only some of the tips for pricing of the enterprise software products.

Marketing strategy

The most important thing to remember is that the sales of software products depend on the quality of marketing effort being put in by the marketing team. So the strategy should be made such as to minimize the price but providing the best possible product. The results of your sales policy may take a bit more time to surface but that does not mean that you try a different one. Instead, be very consistent and patient.

Cost of sales

The pricing is done by most of the beginners on the basis of the costs incurred during its development. They ignore the fact that there will be further costs during the process of sales. Due to this, they just under-estimate the expenses and consequently, the product is under-priced. This may be helpful in increasing the volume of their sales but it definitely does not earn the company the long-term profits.

Variable Pricing

Fixed pricing, though, a practice of many companies may be losing impact in the wake of changing business world. Now while pricing enterprise software products, one has to consider the option of variable pricing. Yes! This can be done by capitalizing on the value of the product, a customer wants to get.  This may boost your sales because the customer will create value himself and your product will be sold as well.

Avoid the Guess game

Guessing is what is normally done while pricing a particular product. What is this Guessing thing all about? Well! The pricing of the product is done on the basis of a calculated guess about the affordability of the target customers. Though it is a bit tricky but it has been extensively followed by even the leading companies in the market. However, it is not as reliable in the field of enterprise software products. So it is better to avoid the guess game.

Pricing in the beginning years

The price of the enterprise software product is crucial especially in the beginning years of its launch. Yes! That is to say that the option is to fluctuate the price of you product from time and again. This will not only provide an opportunity for the target customers to get the maximum benefit in the beginning but will enable you to make up for the low profits by increasing the price at the later stage of the product life. 

Maintenance costs

Whenever you offer your customer the support after purchase, you need to consider the pricing of the maintenance. The price of your maintenance facility should be such as to serve you two purposes. First is to cover the salaries of your support staff. Second is to spend more on the research and development on your product. So it is usually a very well managed policy of pricing the maintenance facility so as to ensure the profitability of the business.

Trials

Trial installation of the enterprise software products is a bit tricky thing from the company’s point of view. If in case you are offering the trial installations, it will raise your costs and obviously, you are not charging your customers for the trial. So, except in the extreme cases, the trial installations of the software products are not at all recommended considering the effect on profit margins of the company.

Well! These are only a few tips on pricing of enterprise software products. There may be many other factors which must be considered for the purpose.