Will You Pay For Your Own Product?

“If you’re not going to pay for your own product, don’t expect anybody else to either” — David Heinemeier, 37 Signals Podcast

This point really struck a chord with me as I was listening to the (really awesome) new podcast show from 37 Signals.  When determining the pricing model for the product you will be selling, it’s important to focus on the customer’s perspective, not your own bottom line.

Of course, the goal is to create a profitable business.  However, you can’t reach this goal by overcharging for your product.  You also can’t get there by giving it away for free or too little.  It’s a balancing act of figuring out that sweet spot between you running a sustainable business and your giving your customer a great value for their money.

So ask yourself

What would you pay for this product?  Does the quality / usefulness / return on investment justify the price for the product, in your opinion as a consumer?

Set it and forget it

As I’m contemplating the pricing model for my upcoming WordPress themes business, there is one guiding principle that I seem to keep coming back to:  It’s a lot easier to lower your prices later than to raise prices.  So this means set the price high out of the gate, right?

Well, I’m not sure about that.  Given that I’m entering such a saturated market, my products will be competing not only on the basis of quality, but also on price.  And in the WordPress themes market, the price range is all over the map.  You have single theme prices ranging from free to $150 for a developer licsense.  You’ve got membership models (access to all themes) ranging from $5 a year to hundreds of dollars for just a few months.

So I’m aiming to fall somewhere in the middle of the road.  Not the most expensive out there, but not the cheapest.  I’m putting serious hours to make these themes of the utmost highest quality possible (by the way, I’m seeking beta testers for the next month!), not to mention the personal support I’ll be providing.  I want my prices to reflect these qualities.  But at the same time, I want to keep the barrier to entry (the price) low enough to attract consumers at the beginning.