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Pricing Niche Enterprise Software

Pricing Niche Enterprise Software. Aviv Handler January 4 th 2007. Identify Market Type. Cross market. Database Software. Word Processing. Capital Markets Software. Pharmacy Management. Niche. Mass market. Enterprise. Pricing depends on the type of market you serve.

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Pricing Niche Enterprise Software

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  1. Pricing Niche Enterprise Software Aviv Handler January 4th 2007

  2. Identify Market Type Cross market Database Software Word Processing Capital Markets Software Pharmacy Management Niche Mass market Enterprise Pricing depends on the type of market you serve

  3. Pricing Strategy Depends On Market Served Cross market Prospect Universe Level of Packaging Interaction with Prospects Flexibility Niche Mass market Enterprise • General • Value Added • Competitors • Typical Budget • Stage in Lifecycle

  4. Enterprise Software Pricing • Clients are expensive to acquire • Focus on “plus one” sales • Modular price list – Never give away all your wares • Usually negotiated • Either using sales person or channel • Never give away the entire product • Holy Grail • Pricing is correlated to growth e.g. per transaction • Good for product company, clients hate it • Hosted/rental model is making this easier

  5. Niche-Enterprise Software Pricing • Usually a small number of clients • Budget driven • All players know all movements • Capital Markets • “IT = Competitive Advantage” mentality • Ability to deliver is key • Price is market driven, but market is driven by price

  6. Who Sets The Price? With a small number of prospects the price is driven by the budget. Distribution (Sales, Marketing) Development Product Management Market Driven Inbound Market Price List Set by Product Management Outbound In some niche markets the accepted price is driven by the price!

  7. Summary • Pricing strategy is driven by profile of target market • Key to serving enterprise markets profitably is to exploit customer lock in – plus one sales • In a niche-enterprise market • All players are known – “gaming” is common • Prospect budget often drives pricing Pricing is both a science and an art

  8. Pricing Niche Enterprise Software Aviv Handler January 4 2007 aviv.handler@co-herence.com

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