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How Much Should I Charge?

by Luke Hohmann

A business model defines how you will charge a customer for your products and/or services, but it does not define *how much* you will charge -- a pricing model does that. Transaction fees, for example, can be just a few cents to many millions of dollars, depending on the nature of the transaction! If your business model is based on access to the software, the associated pricing model could be a one-time payment based on the specific modules or features licensed (a "menu" approach), or it could be a set fee based on the annual revenue of the enterprise.

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How Much Should I Charge? 19 November 2003

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Cutter Consortium, founded in 1986, is a global IT advisory firm helping organizations forge solutions to the business technology challenges they face. Through its research, consulting, and training, Cutter assists enterprises as they create, implement, and maintain IT systems and organizations that support business objectives and encourage innovation. Cutter pushes the thinking in the field by fostering debate and collaboration between thought leaders from different domains, countries, and disciplines. As a completely independent entity that has no special ties to vendors, Cutter Consortium is beholden to no one and dedicated to providing completely objective, unbiased information to its clients. Cutter Consortium gives you access to the top thinkers in IT.

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