What is your pricing model?

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Pricing is a tough thing. You’re never going to make everyone happy with it, so I’ve focused on being fair.

Value-Based Pricing

I’ve used value-based pricing–this means the price is based on the value of the reports in the market, rather than their cost to produce.

In the exact niche of SharePoint Intranets, there is nothing else out there like this, so nothing to price compare with. I’ve done a lot of research on similar information in different markets, and they are priced well below their value.

This is high-value and high-quality information that is put together in a format that is easy to consume.

A comparison with Time-Based Pricing

Time-based pricing uses an hourly rate, like a consultant would bill time. This would put the reports out of reach for most organizations. From my first-hand experience as a decision-maker in a +400-person business, the Overview report would cost well over $100,000 as a consultant engagement. I’m giving this report away for free.

Let’s break-down what it would cost for you hire someone to create just the Knowledgebase portion of the standard architecture for you as a project. (that’s about 1/3 of the Architecture report’s contents)

  • More than a thousand hours time has gone into my analysis of 100+ award-winning intranets
  • Using a rate of $150/hour for an analyst and very experienced SharePoint expert (in Chicago, this would be a very low rate)
  • That portion of the Architecture Report would cost $150K to reproduce, and that’s just one part of one report

Customer Research

I’ve done a lot of research with customers. After reviewing the content with them, most of the folks have felt the reports are inexpensive, a lot of bang-for-the-buck. The ones that feel they are pricey tend to be looking for something for free. When I probe further it is apparent they think the price is fine, they just don’t like paying for stuff. I’m like that too sometimes.

BTW–My friends in the industry that have helped me out with reviewing the reports for technical accuracy think my prices are way too low. They believe they should be priced a minimum of 3-4 times where they are.

The Bottom Line

  • When you’re creating a wholly new product like this, what pricing really comes down to is a wild-ass guess.
  • I’m a fair person, and have tried to come up with a fair price.
  • I’ve priced the reports at the absolutely lowest point that I am comfortable. Any lower, and the tons of work I’ve done just wouldn’t be worth it
  • Prices may increase in the future, but I don’t see them being reduced.

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