Pricing Advice Service

A service designed to help position, license and price your products correctly.

Why are we qualified to help you?

ComponentSource has been working in the software component and developer tool market since 1995. We market and sell software products globally from our offices in United States, Europe and Japan to over 110 countries around the world. The products we sell are for all the main technology platforms: .NET, ActiveX/COM & Java - as well as C++/MFC, DLL, VCL components and tools for Windows, Linux and Unix. This gives us a unique perspective on what products are the most popular and successful with our customers and what licensing and pricing models seem to work best. As a publisher partnering with us you can benefit from this international experience and get our advice on how we believe you should position, license and price your products. Here are some examples of typical discussions that we have with new and existing publishers:

Q. I am new to the developer market and need advice to get me started?
A. Some of the most common problems with pricing come from initially undervaluing your product. Many new publishers contact us explaining that their new product is better than the other existing products on the market. When we ask for details, they can usually list lots of reasons why it is better - with more functionality, better ease of use etc. When we ask for their target market or audience and the pricing model - there is often a mismatch between the price they are setting and the market they say they are going after. If your product is the best in the market and everyone else has a product that costs $499 - why not charge $599 for it - to show the customers that it is a better product? You certainly shouldn't be charging $49 for the product - as the customer will probably wonder why it is so cheap. Likewise - if you charge $249 and you claim the product is better than the other $499 products - customers may not perceive or believe that a product that costs 50% less than the competition is going to be of a higher quality than the other more expensive options. If you study various price points - you will find that they will impact customer expectations and buying decisions. What is your product quality and service expectation for a product that costs: $49, $499, $999, $1,499, $4,999 or $9,999? You would probably expect a lot more from a product that cost $4,999 than you would from a product that cost only $49 - right? So make sure your price matches the target audience you are going after. If you would like advice on your initial pricing email: harryk@componentsource.com.

Q. I have a product that has been in the market for several years and our sales are declining?
A. Quite often even established publishers forget a very important and fundamental thing - namely remembering to revise and update the product! Customers expect you to be moving ahead with your product development, adding support for new operating systems, adding new functionality and fixing bugs. When you update your product to a new major version from say V2.0 to V3.0, this helps to show your customers that you are moving ahead and continuing to invest in and support the product they have purchased. You will also have a newsworthy event that you can publicize to all your existing customers, evaluators, community Web sites, magazines and partners. You can also get repeat sales from your existing customers with upgrade programs to move to the latest version. You can even revise a very old product and get a very positive reaction and stronger sales from the customer base. For example - why not revise that old ActiveX/COM product? You sold the previous version to over 3,000 people and you haven't updated it in over 2 years! Are you sitting on a potential 'gold mine'? If you would like advice on stimulating the sales of your existing products email: harryk@componentsource.com.

Q. Most of my sales seem to be for single licenses - how can I get better multiple license sales?
A. The easiest place to start is to offer licensing for multiple developers or users that will appeal to them. ComponentSource introduced the concept of a "Team License" and a "Site License" for components several years ago. The idea was to encourage companies to legally license their development teams and encourage them to adopt the usage of your products across whole projects, development groups or a complete site. At the same time we were seeking to convince larger organizations that it would be better to buy and license your existing pre-built products and not think that they could write something themselves - as it would save on license costs. The "Team and Site License" model solves many of these issues and can be adjusted as your product and company becomes more established in the marketplace. If your product costs $499 for a single developer license - here is a fairly typical model that you can adopt:

Team and Site Licensing - Example 1:
$499 1 Developer License
$999 4 Developer Team License (4 licenses for the cost of 2)
$1,499 8 Developer Team License (8 licenses for the cost of 3)
$4,999 Unlimited Developer Site License (An unlimited number of developers on a single physical site)

OR

Team and Site Licensing - Example 2:
$499 1 Developer License
$1,499 4 Developer Team License (4 licenses for the cost of 3)
$2,499 8 Developer Team License (8 licenses for the cost of 5)
$9,999 Unlimited Developer Site License (An unlimited number of developers on a single physical site)

Do you need help with questions like these?
Should you be using a Subscription model with annual renewals? What are the advantages and disadvantages of this approach? Is a per server deployment model right for your products? What about run-time or OEM licensing? Are you thinking of introducing an innovative new licensing model and wondering if it will work? Should you be selling source code licenses? Or offering a source code escrow service instead? Should you be charging for maintenance or support and updates? If so - what should you be charging? What is my 3 year product price plan and how does this impact my pricing today?

What should I do next?
If you would like some help with setting your prices or defining your license model - please email: harryk@componentsource.com.