by Matt Soreco on February 23, 2010
Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity.
-Charles Mingus
“Our fully-functional solution is best-in-breed and its robust feature set will ensure maximum ROI!”
Great, what the heck does it do?
I made that up, but it’s not that much of an exaggeration.
I actively look for new opportunities, programs, and services for my company. I have to laugh at the language some companies use to describe their services. Man, just tell me what you do!
by Matt Soreco on February 23, 2010
This post on Lifehacker got me thinking about an idea I had for a while. The post compares the advantages of bootlegged movies over buying a legit copy. FBI warnings, movie previews, etc that you can’t skip.
It’s so true.
Nothing strikes this notion more than sports gear. A replica NFL jersey (a replica!) costs about $80 ($80!). Knock-offs cost $15-$20.
I bet any amount of money that they would sell more than 100% more if they cut that price in half. They’d probably sell 10x the jerseys if they sliced the price to 1/3.
The demand for the counterfeit gear should sound alarms. Not the counterfeiters fulfilling the demand!
They would not only get more people to buy who would have passed on a jersey all together, but they would put a serious cramp on the counterfeiters. Instead of playing whack-a-mole with Asian importers, they can compete on price. And sell a ton more–not only recapturing lost sales to counterfeiters.
Pricing is a funny thing. I used to work in the casual games industry. The going rate for a game when I started was $19.95. That’s getting up there. This was a free trial model. The conversion rate from free trial to buy was extremely low (a small fraction of a percent low). We ran a test once, and slashed prices in half. We more than doubled sales. More revenue when charging less! hmmmm Still though, I thought there was more room to cut. I thought $4.95 was the magic number. Where there is little or no cost resistance. Almost competing with the cost of a premium cup of coffee. At that rate, I bet there would have been 100x the sales.
I wonder how many companies do a true price sensitivity analysis.
Why punish your best customers?
