If you have ever shopped for Church management software, you know that pricing varies widely. Maybe you've even wondered why that is. I've done a lot of thinking about pricing ChMS through the years. Here are some of the different factors I've considered.
Pricing to pay the bills. This is the obvious starting point. Software as a service, like every business has costs associated with it. There are technology costs including servers, computers, phones, label printers, software licenses, and business services. There are HR costs for salaries, wages, taxes, insurance, retirement. There are marketing costs for conferences, travel, marketing campaigns and referral systems. There are often brick and mortar costs for offices or buildings.
Pricing to please the church budget. Then, there's the price that will fit the budget of the client. In our case churches. Yes, there are churches who are fine with paying the same amount for software that they would for a part time staff person. But, most churches have to be really careful about their budget. I managed a church budget for six years and know what that's like. This is a really big factor for us.
Pricing for profit. In the past few years there has been a lot of activity to consolidate our industry. Many private equity firms and venture capitalists have begun to look at our industry as an untapped vertical for profit. Historically, businesses serving churches and non-profits were seen as poor investments. However, as online giving and web-based software services have increased in popularity in churches, a whole new interest in purchasing and consolidating church software businesses has risen. Add that to the multiples for software as a service platforms in our current financial environment and interest in the possibility of church software as a profit opportunity has increased. We'll see a lot more of this in the next decade.
Pricing for perception. There's an old adage when it comes to pricing, "you get what you pay for." This is the idea that if something costs more, it must be of greater value than something that costs less. Status is associated with the more expensive brand. So, the thinking goes, if we price our software at or near the top of the market or maybe even push the market a bit, we will be perceived as higher quality and status and be more attractive to buyers. This has been a hard one for me to consider. Maybe it is my blue-collar background. Or, the responsibility I feel to help churches steward people's giving well.
Next time, I'll look at the options for the basis of pricing and share some of my thoughts about things like pricing per user, module, activity, etc.. But this time, I'll end with a question for you. If you were me, thinking about the price of software for church administration, how would you evaluate the above factors?
