I have noticed that most of the brand messaging coming out from Alibre has almost always been about price. In fact, any messaging related to new functionality and features has almost always been linked to price, with the result that the entire brand messaging appears to revolve solely around price and nothing else. I asked Paul Grayson if this was intentional and it it was about the change in the future or stay the same. This is what he had to say:
“Yes, it has been intentional and it will continue to be that way. Not that it will be as prevalent as it has been in the past couple of years. In fact, with the recession, we deliberately increased the messaging around price because we believed that businesses and individuals were becoming extraordinarily frugal and that price mattered to them more than most other considerations. The recession was probably the best time to use the price message to our advantage.
Historically we have used price as a message also because it is a key distinguishing characteristic of the product and the company. From the very beginning, the company’s intention was to have an average selling price of $1000 as seat. So when we got into the market in the late nineties, SolidWorks and Autodesk were already approaching the $5000 per seat mark and we felt that going into a market with entrenched competitors, we had to come up with an order of magnitude better price performance in order to able to create a viable niche. So we set out to build a company that could thrive on a $1000 per seat average. And that is still our target. We might sometimes dip below that mark and sometimes go above it.”
I reminded Paul that now the average seemed to be $500, the price of Alibe Design Professional. He said:
“Yes, the average has come down but the volume has gone up. We made a deliberate decision to test the effect of price at an increased volume with the belief that the volume would more than make up for the price. And that has definitely turned out to be true, which is why we formalized the prices to what they are now.”
I asked Paul exactly whose idea it was to slash the price of Alibre Design Standard to $99.
“It was me. Normally, I do not force people in the company to do things. I hear them out and use their opinions to make a decision. This was an exception. It was my idea and I had to fight for it (Ha! Ha!). I had to insist with a couple of people that we were going to do it and they were given a choice of either supporting it or moving on. And the result of doing it was that we had the best financial year every last year. We made more money and improved our financial position significantly.”