What is flinch pricing?

Posted at 8:24 on Monday July 17, 2006 | Filed Under Miscellaneous

I was having lunch with my friend Chris Yeh the other day, and he mentioned this phrase I hadn't heard before. I don't know why, but it struck me as pretty funny.

"Flinch pricing: Attempting to find the highest possible price the customer will bear. If you're trying to sell a software product, you might say the following to your customer:
"The price is $1,000...per application...per CPU...per month...for the ongoing maintenance...etc."

You stop when the customer visibly flinches from the pain, and then negotiate down from there."

DONE READING?: Now you can leave your own comment or subscribe to the newsletter

Comments (6)

1.: I've seen this described the other way around, which is to say that a savvy purchaser is willing to flinch early in the negotiations. Most people are nervous about pricing and some will fold rapidly if they sense that the other person reacts viscerally to the first offer.

I guess I would offer up the caveat that "flinch pricing" may work, but you better be adept at reading if the buyer is already a good negotiator. Otherwise, they will gain the upper hand easily.

Posted by Duane Gran at July 17, 2006 11:10 AM

2.: LoL I think sometimes designers are same way with their pricings which is why some peopel don't tell others how much they charge. It's smart, but you better know how to read the buyer and base your price by them.

Posted by Tammy at July 17, 2006 12:43 PM

3.: This is also why I'm generally firm on my pricing. Sure, I'll negotiate - but only if I think it's worth it to me. Most of the time, I move negotiations away from my rate and more toward the deliverables. When the rate is static, the customer is forced to choose between paying up or losing features.

Posted by Chas at July 17, 2006 01:14 PM

4.: goes to show how overpriced most crap is in a retail setting. Avoid retail when you can.

Also, we may be seeing an end of an era on the "per CPU" pricing. With Intel looking forward to 32 core processors, I don't know too many people willing to pay 32x to run it on one machine. Good riddance, I say.

Posted by debt-free at July 17, 2006 04:06 PM

5.: This sounds similar to what happened when I told my current boss how much I made at my last job. She flinched and said "There is no way I can pay you that much, my full time people with two masters don't get paid that well" and I said thats why I told you I wasn't expecting that and didn't want to tell you how much I made before! It was helpful in getting me a few dollars extra an hour though.

Posted by Mike at July 18, 2006 04:22 AM

6.: And if you miss the flinch, you can always go to "walk out the door pricing" -- which is when the customer walks out the door as you're adding to the price, and providing less value.

Funny term, stupid concept though. Anyone who prices like this is going to lose out in the long run.

Posted by Ben Yoskovitz at July 20, 2006 12:50 PM

Leave your comment

NOTE: Fields marked with asterisk (*) are required.

name*:
e-mail*:
your website:
remember me:	yesno
comment*:(You may use HTML tags for style)