How much we decided to charge for our software

A couple of weeks ago I asked how much we should charge for our software. There were some really good responses in the comments, in particular Andy Brice's link to the Joel on Software forums (which I'm now devotedly following). My takeaway was:

• You can probably charge more than you think.
• You should ask your existing customers.

The post also included a poll, which came in with an almost perfectly linear relationship between price and the number of votes; the lower the price, the more people voted for it.

Since that post, I've emailed our existing customers and crunched the numbers. The results were pretty convincing -- our price point was too high. When we released version 1.3 of our software, we'd bundled in our webserver option and pushed the price up from $199 to $399. Almost every customer we asked felt that that had been a mistake. For many of them, the webserver wasn't of interest, so bundling it in wasn't useful. And the new price took us out of their impulse-buy range. So we're going back to the old model - $199 for the core product, $199 for the webserver.

We announced this on Tuesday, and sales have already ticked up.