My software company is in Canada. We sell our software for download from our web-site. Most of our sales are made in the US, though we do about %25 of our business in Canada and Europe. We sell our product in US dollars.
A problem we have is dealing with the rising value of the Canadian dollar (which is what we pay our expenses, a.k.a employees, in)
Year over year the exchange rate has affected our revenue by as much as %20! This unpredictability is a problem for our planning. It would be nice to insulate ourselves (at least partially) from that volatility, even if it meant not reaping the rewards if the CAD drops.
My question is: What strategies have people tried in software companies to deal with this issue? How did they work out.
Currently we're considering:
1) Raising our prices. This isn't immediately attractive because we're concerned that a price hike will put off customers.
2) Selling in "local" currencies at a fixed price for each. i.e. Euros in europe and CAD in Canada. Our concern with this is that for something like software that you can buy and download from pretty much anywhere on the planet, a savvy customer would look at the actual cost of the software in each currency, factor in the exchange rate and other costs, then pick the cheapest one (heck, it's what I do!). Has anyone tried this and seen if that's what happens? Any negative perceptions from customers? We wouldn't want to be perceived as trying to rip people off with a higher relative price in currency vs. another.
Any other strategies?