I read blog post recently that used pricing of Raphaels’ painting to draw conclusions to pricing of software and concluded that fair product price is determined by what people think not what your product actually is. I disagree. Big time.

Comparing pricing of art and software does not really make sense. Why? Value of the art is in the eye of beholder. You buy art that you like and that liking is entirely subjective. You don’t buy art to perform certain job. You buy art because how it makes you feel.

On the other hand, most people buy software do to something with it. They buy a tool. There is a job that they have in mind for that tool and the value of the tool is determined by how well it solves the job at hand.

Value thus, is the foundation of pricing. Customers choose price they are willing to pay based on value they receive from a product. Any healthy business should concentrate on creating value not hot air that will burst the balloon sooner rather than later.

Is there perception there? Sure there is, but it is often very small part of the equation. When you evaluate tool, you choose the one that works best for the task you have at hand. I am not aware of single product that was long lasting and which had not provided value to its customers. None. You can’t sell perception for long. There is work to be done.

Besides, how do you build perception? I admit, I have no clue and have no interest in that. I believe it is much healthier to concentrate on building value. You concentrate on building things that are useful to people. Let others build perception while you build tools that help people do their job every day… Guess who’s going to be around in 5 years.

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