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I'm trying to figure out how to price a desktop application that I'm currently developing. I have read a few articles on the subject, but I'm unable to come up with a clear path.

A bit of background... my application is a foster software that targets fostering and adoption agencies for children. There are many agencies and local authority organizations that place children in foster homes or for adoption. I'm developing foster care software that records all the information that an agency or organization need in order to place a child successfully i.e. child data, foster family data, contact data (doctor, dentist, social worker), employee data etc. The application is written using Windows Presentation Foundation, and I've spent a lot of time finessing the UI element to get it right.

I also hope to expand this to foreign language versions. In addition, this model can be used for Mental Health, Residential Care and a host of other 'Care' professsions.

Anyway, my question: Do I

  • Charge a monthly rental cost, that includes support

    Charge a monthly rental cost, that doesn't include support

    Charge a one off fee and then charge for support

    What else?

I'm interested to hear peoples views on what pricing model to follow.

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5 Answers

up vote 8 down vote accepted

I think the key for pricing desktop applications is to make it as boring as possible. Don't try to invent a fancy new pricing model. Most users have set expectations for the cost of desktop applications these days.

The traditional model for business applications is to charge a licensing fee plus annual maintenance. It's pretty standard in the enterprise applications world.

For small office / home office applications, it's typical to have a one-time license fee with support included.

If you hope for repeat business as you continue to develop your product, you'll need to define your upgrade policy, too. Most software vendors provide patches and minor version updates for free, but charge customers again for major version upgrades.

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1  
I think you may have hit the proverbial nail on the head. Make it boring, i.e. stick to the tried and tested model of charging an upfront license fee and then annual maintenance on top. – SmartCompanySoftware Dec 1 '09 at 5:35
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+1, and if you're selling B2B the expected annual maint. is 20%. For B2C they often expect to have to outright purchase new versions at a discount TBD, something like 50-70% off. – Jason Dec 2 '09 at 3:23
up vote 1 down vote

Given you're market is almost 100% non-profit, I'd suggest the more you can make tech support a non-issue, the better (non-profits typically have no/little/very bad IT). In some ways, the rental option seems most attractive: lower initial outlay, easily understood, a strong sense you will be there to support them.

The biggest obstacle is that these people need to own - and be able to fully export their data.

Something to think about: Making it possible for charitable donors to donate a year of your app to their favorite caregivers. And please make a version for animal adoption agencies!

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Thanks for the reply Bob. I'd just like to point out that the market is not almost 100 non-profit. There are many agencies that now operate to find homes for children in care or at risk and these are companies that in most cases charge local authorities for their services. Animal adoption software - I'll add it to the list of potential markets! – SmartCompanySoftware Dec 1 '09 at 3:07
Aha - good to know. Do these private companies have a for profit or non profit company culture? – Bob Walsh Dec 2 '09 at 15:59
Many of these have a profit culture. The company that I worked next door to was owned by a very bright women who made a very profitable living from the agency. The main gripe they had was software and storing/retrieving information. – SmartCompanySoftware Dec 15 '09 at 1:49
up vote 1 down vote

The theoretical answer is to charge every individual customer what he is willing to pay for.

Of course, that's not practical. But a good approximation is to offer different options and let your customers choose.

For example, it seems you could split the desktop software into a desktop and a server software. The later could also be split into a hosted and a self-hosted version. Then, you'd be able to offer:

  1. a desktop license for a one-time fee,
  2. a self-hosted server license for a one-time fee,
  3. a hosted server service for a monthly fee,
  4. a community support option for free,
  5. an installation service package for a one-time fee,
  6. a basic service package for a monthly fee, and
  7. an emergency service package for a monthly fee.

If that's too much hassle, I'd agree with DThrasher's answer.

Hope this helps.

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that is a great list. +1 – Kim Jong Woo Dec 6 '11 at 5:00
up vote 0 down vote

That's the million dollar question Adrian. There are many different techniques as you have probably read, but none can be used as a silver bullet.

I like the pricing strategy that puts the customer at the center of everything because it makes the justification of the price easier. For example, in your case, how much time do you think your app will save to foster home workers? How much value does it add (always from the customer point of view, not yours) to those type of institutions.

I understand your argument of working long hours in the app (together with the stress and the opportunity cost), but that is something that the customer may not value as much.

As for your other questions, I would offer support as an option. Some institutions may have IT people in house, or geeks already in their payroll that could fix anything simply by reading a user manual; others may require more help, so you may offer two different prices.

You can also offer the product for free, for the first month (hoping that once they use it they'll fall in love with it or once they have put some data in the system it will be worth it), give discounts for long commitments,...

Good luck.

Aurelio.

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up vote 0 down vote

Pricing aside, I'd ask yourself, what do YOU want out of this? I know for me I want (financial) stability in life as an entrepreneur. Having said that, I would go with a subscription/monthly support plan. This ensures that you'll make at least $X amount a month. Would you rather go to sleep hoping you're going to sell more software tomorrow? Or would you rather go to sleep knowing that unless something terrible happens and all your clients run away, you're going to make $XXXX a month?

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