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Playing with the price

Marketing Add comments

Sale tag #7

I’m just starting in the shrink wrap software world, so I read a lot of forums and blogs, specially BOS forum.  I learn a lot of things, and have a great time :-)

One thing that amazes me is the  rigid position of the guys there regarding the price. They all stick to the “price signals quality” way of thinking and seldom consider other points of view.

Many of them are also afraid of special sales, they think that after you make a sale it’s difficult to return your price to the previous tag.

On a recent article on Coding Horror,  Jeff Atwood presented the case of Valve, a game producer. They tested the reaction to their holiday sales, with impressive results:

The massive Steam holiday sale was also a big win for Valve and its partners. The following holiday sales data was released, showing the sales breakdown organized by price reduction:

75% sale = 1470% increase in sales

10% sale = 35% increase in sales (real dollars, not units shipped)

25% sale = 245% increase in sales

50% sale = 320% increase in sales

Not all the markets are the same, not all the products are the same. Sales must be carefully designed, planned and communicated to avoid affecting product image. But we must remember that, with all that taken into account, price is a powerful lever to play with!

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August 12th, 2009 |

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