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Following my earlier entry regarding Printable's volatile pricing strategy for FusionPro Desktop, I was surprised to read Printable's latest announcement where they've slashed the price of their VDP server product, FusionPro Direct, to $2,995—a 70% price cut and they're also bundling in a copy of FusionPro Desktop.
While this may seem like a great deal, I really believe by dropping your product below the market acceptable price and giving away another product for free, you're not doing yourselves or your market any favours. It might provide Printable with a short-term revenue gain, but it's a dangerous tactic that can de-value your product and piss your customers off—if I was a Printable customer who paid $10k for a product which was slashed to $3k (and bundled with a $600 product) a month or so later, then I'd be feeling pretty ripped off right now.
I expect to see this type of promotion in an infomerical on the Shopping Channel, but not in a media release from a software vendor.
Posted on Friday, 8 August 2008 at 12:12 PM | TrackBack: http://www.veedeepee.com/cgi-bin/mt-tb.cgi/171
I'd like to expand on my initial brief entry. I received an email response from Printable's Marketing Director, to which I gave the following reply:
"No doubt your key objective of this deep discounting strategy is to increase your customer base and take away sales opportunity from competitors. I really don't believe it's helpful to have a large customer base—while it might look impressive on the corporate profile, the reality is that it's never an accurate reflection of actual active users.
In addition, the risk in deep discounting is that it can de-value the perceived 'real value' of your products and undermines your credibility with "fake" sales, so that the market stops believing in your real prices. Also, deep discounting can be seen as a tactic of desperation, and creates uncertainty and doubt in the stability of your business."
I'd be keen to hear thoughts from others. Does anyone believe this is a sensible pricing strategy?
Posted by Eliot Harper on Saturday, 9 August 2008 at 4:46 PM