Pricing Strategy for Digital Products

[dchuk]

This is all fluff. You can do better. You should do better.


You spend way too much time on Hackernews bro.

Paul Graham also does not understand what ad hominem is.

Ad hominem - Wikipedia, the free encyclopedia

I never did that. In fact, I never claimed your argument lacked any validity because you're clueless about economics.

Now if I had said, "Your argument is wrong because you're an idiot." then that would have been ad hom.

What I did, was quote Rothbard, and by doing so implied that your lack of knowledge about economics should probably temper the zeal with which you discuss it.


This is a cowards tactic Darrin. No one has attacked you personally. You've been called out for being wrong, and I think it's because you're ignorant about economics.

That's not a personal attack.

Doing this crap where you can't be criticized because you'll claim it's against the man is really weak shit. I have never claimed I am right because I know more economics than you. I am right because I can form a coherent argument on the subject because I understand it. And I am happy to demonstrate that for you, anytime.

So, enough with faking injuries that didn't occur. No one is impressed.

kk?

from your link:

"An ad hominem (Latin for "to the man"), short for argumentum ad hominem, is an attempt to negate the truth of a claim by pointing out a negative characteristic or belief of the person supporting it.[1] Ad hominem reasoning is normally described as a logical fallacy,[2][3][4] more precisely an informal fallacy and an irrelevance.[5]"

A negative characteristic here is your argument that I don't understand economics. You quoted someone regarding ignorance of a topic.

I don't really know a clearer way of explaining that you lack a fundamental understanding of what a fucking ad hominem attack is.

 

[dchuk]

Fuck it, I'm just going to bow out of this with a quote that I find extremely relevant:

"You're not wrong Walter. You're just an asshole. "

 

[guerilla]

A negative characteristic here is your argument that I don't understand economics.

No, you're wrong and it is because you don't understand economics, for the same reason I would probably be wrong in a coding thread because I can't program.

I never said your lack of knowledge about economics disqualified you from being right (source pls). There are plenty of people here with a superficial understanding of economics who could get this right, by accident or by providence.

You quoted someone regarding ignorance of a topic.

I quoted Rothbard, in reference to your zeal with which you discuss topics you don't understand. It had nothing to do with you being wrong or right.

I don't really know a clearer way of explaining that you lack a fundamental understanding of what a fucking ad hominem attack is.

I didn't claim you're wrong because you're you (an attack against the man). I said the position was wrong and then I dissected that post to demonstrate how.

And my last response was more of the same.

Look, if you want to drag your ass around here and cry that you're being wronged, you're the one not interested in serious discussion. I wouldn't even have posted that Rothbard bit, if you hadn't made your typically ignorant comment about markets in the OP. That Rothbard bit wasn't addressed at the argument. You chose to interpret it as such, but do you really expect me to be responsible for how your mind works?

I've got hundreds if not thousands of posts debating here, and I almost never (in case I did and I forgot) attack the man. It's a shit position in debate, which is why I don't do it.

 

[Unarmed Gunman]

Was going to jump in for fun until I realized:

 

[Affiliatin]

this thread got crazy real quick

 

[greenleaves]

No, you're wrong and it is because you don't understand economics, for the same reason I would probably be wrong in a coding thread because I can't program.

I never said your lack of knowledge about economics disqualified you from being right. There are plenty of people here with a superficial understanding of economics who could get this right, by accident or by providence.


I quoted Rothbard, in reference to your zeal with which you discuss topics you don't understand. It had nothing to do with you being wrong or right.


I didn't claim you're wrong because you're you (an attack against the man). I said you were wrong and then I dissected that post to demonstrate how.

And my last response was more of the same.

Look, if you want to drag your ass around here and cry that you're being wronged, you're the one not interested in serious discussion. I wouldn't even have posted that Rothbard bit, if you hadn't made your typically ignorant comment about markets in the OP. That Rothbard bit wasn't addressed at the argument. You chose to interpret it as such, but do you really expect me to be responsible for how your mind works?

I've got hundreds if not thousands of posts debating here, and I almost never (in case I did and I forgot) attack the man. It's a shit position in debate, which is why I don't do it.

Dchuck, can't you see Guerilla when he says your wrong without explaining why is always right?

If he says you don't understand, you should accept it; since ironically the basis of most of guerilla's arguments are his intellectual superiority.

He is a poster who believes in 'gurus'. And if you believe in 'gurus', you believe in people so superior they aren't even able to debate with facts, only their 'superior understanding and your inferiority'.


Now, back on topic:

Discussing price structures and types in general is too academic for me. I like action. Now I think split testing price is bad unless you re-design the entire page and split test it page 1/page 2. If you are aiming at 'price conscious' users you need to have all kinds of design/copy write elements to please them. If you are aiming at 'high end seeking users' you need to design/copy write accordingly.

Just split testing price with the same design/copy is stupid and is too numerical and disconnected to the emotional aspect of purchasing (which is most of it IMHO)

 

[tangy]

Either you two cats (dchuk & guerilla) put up some bank statements so you can end this pissing contest, or just ignore each other's accounts already. This is getting ridiculous.

You're both intelligent, know internet marketing, blah blah blah. Please stop turning what could be actually useful threads into the rest of the utter shit that pervades this forum.

 

[mituozo]

Either you two cats (dchuk & guerilla) put up some bank statements so you can end this pissing contest, or just ignore each other's accounts already. This is getting ridiculous.

You're both intelligent, know internet marketing, blah blah blah. Please stop turning what could be actually useful threads into the rest of the utter shit that pervades this forum.

I think that anarchy would make for a bad society. I love the state, and wish that the state had more power. No state would be bad and allow big companies to amass cash, whilst poor people can hardly afford homes or a roof over their head.

Value is also something that can be calculated from a series of calculations and is nothing to do with what people are willing to pay. I can prove it, it's called net present value.

please don't hurt me, if I can't troll wf, where can I troll?

 

[Moxie]

your zeal with which you discuss topics you don't understand

Hypocrisy is great fodder for comedy.
- Mo Rocca

 

[okuma31]

this is about to get real... again...

shitjustgotrealmj.gif
scarlettpopcorn.gif
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p.s.

can anyone see why this is relevant?

 

[mituozo]

this is about to get real... again...

shitjustgotrealmj.gif
scarlettpopcorn.gif
mjpopcorn.gif

p.s.

can anyone see why this is relevant?

It's a good book, in fact most his books are. I liked his one on worrying too.

 

[okuma31]

You have notes on the worry book, it's sat on my desk for the past year and keeps getting pushed back in favor of my ever growing collection of marketing books from old school copywriting legends and dan kennedy books.

ill trade you some emmm e-myth revisted notes lmao.

 

[Andrew Scherer]

define ad hominem

 

[drave]

The price your customers end up paying for something should be determined between you and the customer, without any influence from other products in the market. It does not matter what other products cost, it only matters what your customer is comfortable paying for your product based on what it can deliver to them.

If you end up with a price similar to competitors then so be it. But you shouldn't be basing your price off of your competitors from the get go.

i agree with guerilla... this is so anti-economics/reality, its laughable. we could go sentence by sentence if you'd like, but it's just bad.

 

[cardine]

I spend a shit ton of time reading about this stuff, and these two articles are just fucking fantastic:

Perfect Pricing Part Deux — More money from fewer sales by @ASmartBear
Will Low Prices Help You Sell More? (Biz Book Friday!) « Unicornfree

The basic idea they're presenting is: Supply and demand does not exist for digital products as there is no tangible product or upper limit to supply (someone buying your ebook or subscription product doesn't reduce supply in the market). As market pricing is dependent on supply and demand, market pricing is an inappropriate model to follow for pricing digital products and you should instead be using Value Pricing models (prices determined by the value the customer derives from the product).

My favorite excerpt from the asmartbear post:



Discuss.

Also, inb4 "markets 4 lyfe" and "the market is the sole determiner of value" bullshittery begins

I don't necessarily disagree with any of your statements, but I also think you have a bit of a bias as a product owner whose product hasn't really ever had a true competitor.

Also assuming you are talking about more than just ebooks, there are other costs that can effect the supply chain such as server costs, licensing fees, bandwidth, customer support, load balancing, etc. that can be present in digital goods.

 

[dchuk]

i agree with guerilla... this is so anti-economics/reality, its laughable. we could go sentence by sentence if you'd like, but it's just bad.

it's really fucking simple:

when you sit down to price your product, you don't look at other prices of similar products...you talk to prospective customers and ask them what the value is that they derive from your product. that's it.

 

[dchuk]

I don't necessarily disagree with any of your statements, but I also think you have a bit of a bias as a product owner whose product hasn't really ever had a true competitor.

Also assuming you are talking about more than just ebooks, there are other costs that can effect the supply chain such as server costs, licensing fees, bandwidth, customer support, load balancing, etc. that can be present in digital goods.

Value Based pricing is especially suited for digital products such as what you and I own, as the value derived from them can often be exponentially more than what the customer is paying.

Market pricing (competitive to competition) is a good way to price your box of cereal. Value pricing is what you use to price products with utility.

 

[cardine]

Value Based pricing is especially suited for digital products such as what you and I own, as the value derived from them can often be exponentially more than what the customer is paying.

Market pricing (competitive to competition) is a good way to price your box of cereal. Value pricing is what you use to price products with utility.

Essentially what you are suggesting with "value based pricing" is pricing in the same way that a monopoly prices goods.

I think it isn't so much digital vs non digital, but emerging (with few true competitors who can match your quality) vs non emerging industries. In an emerging industry, because things evolve so quickly you can have a monopoly on a certain type of product by being the first to market, and maintain that monopoly until products of an equal quality emerge.

And in this case I would argue that because both SerpIQ and WordAi don't have true competitors (competing products that can offer the same quality of product) they are priced with what you call value pricing. However, that is absolutely not the case for digital goods that have a direct competitor of similar quality.

Value based pricing works in the cases you mentioned, but I disagree with you on why it works.

 

[shawnhag]

why do these great topics have to be arguments instead of collaborative discussions?

its just me, but when this got posted, my initial reaction wasnt to try and prove what was wrong with it, it was to read both articles and see how i could apply it to what i was doing.

 

[drave]

it's really fucking simple:

when you sit down to price your product, you don't look at other prices of similar products...you talk to prospective customers and ask them what the value is that they derive from your product. that's it.

and those customers, in response to your heartfelt inquiry, analyze the market prices and come up with what they'd pay. in sum, its just pushing market research onto your customers, and basing your product pricing onto a tiny market segment of trusted customers that likely won't represent the larger customer base. otherwise, you just continually move your prices according to demand, which makes this argument moot.