Interesting concept... But how would you adapt it when you're selling to businesses instead of individuals?
Ryan Hunter
· 1 month ago
Andrew, I've spent a ton of time in my career developing various ways to price and license technology. This is a very fresh idea. As you note in the beginning of your post, the trick will be to put the portion of the ACDI into a concept that the consumer can grok. Hence, the cup of coffee analogy. I wonder if there are better ways to get the point across? Great work.
Ryan Hunter
· 1 month ago
As an example... I just saw this on a Boing Boing post:
"A US-based genomics company announces that it can perform genomic sequencing for under five thousand dollars. In my budget, that's 'fully loaded 8-Core Mac Pro and a monitor,' or 'sweet new Canon 5D with one nice lens.' But unlike those tools I covet, DNA is forever."
So while I love the notion of ACDI from a price modelling perspective, I think that a consumer requires more context...
joshyarber
· 1 month ago
This is quite an interesting concept. I see the problem being small startups want their own personal ACDI to increase. Since they ARE their company, thinking about what others should spend isn't in their big picture a lot of times.
In small business classes they teach us to create a budget and include things like office rent, expenses, etc. and price accordingly. I think if more startups considered their customer's ACDI, they would provide greater value and increase their loyalty, something a lot of companies have lost sight. Increased loyalty builds a marketing team of customers/clients that will, in the end, sell your product/service for you whether by word of mouth referrals or repeat business. ACDI is something successful startups pay a lot of attention, hints to why they're successful.
Case in point, 37signals. @Adii, Maybe they use ABDI (Avg. Business Daily Income?)
Deano
· 1 month ago
This is such a timely post, because sometimes the ACDI is a factor when looking at services that provide multiple service levels... For example, I just checked out http://typekit.com today, basically a web service selling "font usage for your website for one low monthly/annual fee". The only problem is, the annual fee at the upper end is well past my ACDI! And at the lower, more acceptable end, the featureset SUCKS too much. So, even though this startup has accounted for multiple ACDI levels to a point, they stopped thinking of the non-financial incentives, and/or their service model only works under such a tight-focused market that I'm just never going to be a good fit, regardless.
So, I think an additional point to make is, while it's nice to have something like ACDI guiding pricing, it's equally important to realize that the pricing, whatever it is, needs to provide appropriate or even excessive value to the consumer (and I would suggest that this is more true for LOWER ACDIs, where the choice essentially boils down to pay for excellent things and make do without a lot, rather than pay a small increment for a so-so solution).
Anyway, cool stuff! Perhaps ACDI is also the "natural" point at which individuals who are beholden to other interests (the bank, parents, spouses, etc) don't need to consult with a higher power to make the buying decision. I definitely notice the difference in trying to buy something I really want if it's over $200... And if an annual service crests $99, I tend to take MUCH longer thinking about it, whereas I am a Flickr Pro user who barely uses his account, simply because $25 wasn't even an afterthought for what I could get in return.
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"A US-based genomics company announces that it can perform genomic sequencing for under five thousand dollars. In my budget, that's 'fully loaded 8-Core Mac Pro and a monitor,' or 'sweet new Canon 5D with one nice lens.' But unlike those tools I covet, DNA is forever."
So while I love the notion of ACDI from a price modelling perspective, I think that a consumer requires more context...
In small business classes they teach us to create a budget and include things like office rent, expenses, etc. and price accordingly. I think if more startups considered their customer's ACDI, they would provide greater value and increase their loyalty, something a lot of companies have lost sight. Increased loyalty builds a marketing team of customers/clients that will, in the end, sell your product/service for you whether by word of mouth referrals or repeat business. ACDI is something successful startups pay a lot of attention, hints to why they're successful.
Case in point, 37signals. @Adii, Maybe they use ABDI (Avg. Business Daily Income?)
So, I think an additional point to make is, while it's nice to have something like ACDI guiding pricing, it's equally important to realize that the pricing, whatever it is, needs to provide appropriate or even excessive value to the consumer (and I would suggest that this is more true for LOWER ACDIs, where the choice essentially boils down to pay for excellent things and make do without a lot, rather than pay a small increment for a so-so solution).
Anyway, cool stuff! Perhaps ACDI is also the "natural" point at which individuals who are beholden to other interests (the bank, parents, spouses, etc) don't need to consult with a higher power to make the buying decision. I definitely notice the difference in trying to buy something I really want if it's over $200... And if an annual service crests $99, I tend to take MUCH longer thinking about it, whereas I am a Flickr Pro user who barely uses his account, simply because $25 wasn't even an afterthought for what I could get in return.