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Re: AM: Price point marketing

To:     Larry Brown <larryb@digitalnow.com>
Subject:     Re: AM: Price point marketing
From:     paul@routelink.com (Albert, Paul)
Date:     Wed, 02 Jul 1997 14:42:47 -0400
CC:     "'ad-market@netpreneur.org'" <ad-market@netpreneur.org>
Organization:     RouteLink
References:     <199707011707.NAA22084@services.netpreneur.org>
Reply-To:     paul@routelink.com

A couple of quick thoughts:

1) Why not offer your customer a menu of options?  For example, you
could offer licenses for 15,000 users for $30,000 each or an unlimited
license for $75,000.

2) Why not produce a "Showcase Light" product with limited capabilities
that bears the Digital Now brand and offers an upgrade path and
ancillary revenue opportuities (such as hosting Showcase albums on the
net)?  You could license that for less.  

3) Why not ask for a small percentage of any increase in digital
processing revenue that the customer experiences from the first day they
ship out your product to 6 months after they discontinue shipping your
product or the contract ends?  

4) Why not ask for a certain amount of digital photo processing "credit"
for each copy sent and the ability to resell that processing?

If you do sell an unlimited license, try to find some way that the
version of Showcase being given out will only work with digital pictures
that the licensee has produced.  You will have to do this carefully to
avoid user backlash.

Regards,

 -- Paul Albert
    President, RouteLink
    Internet-Based Freight Matching - "We Help America Run"
    paul@routelink.com, (v)703-242-4444 (f)703-242-3998


Larry Brown wrote:
> 
> I have an interesting problem, which I hope I can get some useful
> feedback on.  I'll try to describe it as briefly as possible.  Please
> feel free to write, or call, if you need additional information, or have
> some input.
> 
> We make software that is just being released to the general public this
> week.  It is called "Showcase" and is effectively a family photo
> organizer.  It puts your digital images in a picture album kind of
> display, lets you add notes, and sort it by every way possible.  We only
> sell to resellers and are going to charge $5.95 per copy, they can then
> choose their resell price.
> 
> One of our distributors wants to buy an unlimited right to give away our
> software to their customers for one year.  They develop the film in a
> digital manner from regular 35 mm film.  They think, correctly, that
> giving away our software with a digital order will increase their
> digital share of  business. How much should we charge for this? It will
> be a one time upfront fee.
> 
> We don't have a clue so here are some of my thoughts.
> 
> 1) They will only be giving away our software to their existing
>     customers.  I don't think this takes away to much from any of our other
>     resellers marketing possibilities.
> 
> 2) They have 1,000,000 customers.   Statistically about 40%, 400,000, of
>     these have computers.  Currently 3% of their customers order digital
>     film, in addition to regular pictures.
> 
> 3) Our customer in Finland has 15% of their customers also order
>     digital.
> 
> Any thoughts, ideas or suggestions?
> 
> Larry Brown, CPA
> Chief Operating Officer
> Digital Now!
> larryb@digitalnow.com
> 703-902-0600 ext 104
> 
> Thanks in advance for your help!

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