Daniel Leary on 37Signals, Pricing Business Services vs. Consumption Services, and Getting the customer to invest

"So we’ve said a few things now:

  • That business-services operate pricing models which do not represent costs but investments, and are viewed as such.
  • That consumption-services (which either aid or directly represent consumption) operate pricing models which represent real costs.
  • That investing in order to generate profit on that investment is popular, and spending money on direct consumption is increasingly not.
  • This is the most important one: that comparing investment opportunities and consumable products is like comparing chalk and cheese, with mutually exclusive business models and pricing logic."
  • I like the notion that you can charge more for your product if your users see it as an investment in themselves or their business--not just buying something to be consumed.  How much money are you going to make your save your customers if they *invest* in your service?