Archive for the ‘Pricing Strategy’ Category

The concept of “free” as a business model, or at least a phase of a business model, is here to stay, but does it really work? The short answer is, yes and no. One school of thought says to give your service away for free in order to get exposure and dominate the market, then find a way to monetize your service. There is some validity to this, but for most people/companies, it just won’t work. First, you have to have money to support yourself and/or your company during the free period, and this isn’t just a matter of providing the service because a large percentage of the people receiving your free service will expect you to provide free support as well. Another factor is that, quite often, the people interested in your free service won’t be willing to pay for...

From time to time, almost every business owner is forced to negotiate prices in order to close a deal; especially during a recession. If you’ve been through this before, you know that it can go down hill pretty quickly and end with both sides unhappy. The key to creating a win-win scenario is knowing how much wiggle room you have with your prices, and staying within that range. Sometimes you may have to cut your prices just to keep revenue flowing, but you still need to make a reasonable profit. The problem is that if you spend much time working with an unprofitable client, it takes away from the time you could be spending with profitable clients, and you’ll most likely begin to become resentful and under-appreciated. Before long, you’ll find yourself looking for ways to cut corners on their project so that you...