67 Open Source Replacements for Really Expensive Applications By Cynthia Harvey

Why spend thousands or even hundreds or thousands of dollars on a closed source application when you can get a comparable open source app for free? Even if you need commercial support, many open source programs now offer paid support that costs much less than the alternatives.

For this list, we looked for quality, open source alternatives to software that has a reputation for being expensive. Whenever possible, we included MSRPs for the expensive software, though in some cases, the pricing scheme is so complicated that it's nearly impossible to pin down.

We published a similar list last year, and we've updated and expanded the list for 2011. If you have suggestions for next year's list, feel free to note them in the comments section below.

Accounting

1. Edoceo Imperium Replaces QuickBooks Pro ($229.95), Sage Peachtree Complete Accounting 2011($254.99) Web-based Imperium combines some business management features like CRM and job tracking with a full-featured double-entry accounting package. It's built in XHTML/CSS and JavaScript, and it integrates with Google Apps. Operating System: OS Independent

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2. FrontAccounting Replaces QuickBooks Pro ($229.95), Sage Peachtree Complete Accounting 2011($254.99) Like Imperium, FrontAccounting is Web-based and includes some ERP functionality. It prides itself on being powerful, yet simple. Operating System: OS Independent

3. TurboCASH Replaces QuickBooks Pro ($229.95), Sage Peachtree Complete Accounting 2011($254.99) This small business accounting package offers many similar features to QuickBooks and Sage. It tracks up to 10 bank accounts, 999 sets of books, 12000 accounts, 40000 debtors and creditors, and 64000 stock items. Operating System: Windows

4. XIWA Replaces QuickBooks Pro ($229.95), Sage Peachtree Complete Accounting 2011 ($254.99) First released in 1999, XIWA is an older accounting program for Linux only. One benefit for owners of very small businesses is that it offers the option of using double-entry accounting or not, depending on the background of the user. Operating System: Linux

Audio Recording/Editing

5. Audacity Replaces Apple LogicPro ($499), FL Studio Producer Edition ($199) Apple's audio editor aims to let amateur musicians create professional sounding mixes—Audacity does the same thing without charging you an arm and a leg. With it you can record live audio, convert files to different formats, cut and splice tracks, change pitch and more. Operating System: Windows, Linux, OS X

7. Linux MultiMedia Studio Replaces Apple LogicPro ($499), FL Studio Producer Edition ($199) LMMS is a music composing and mixing tool designed as an alternative to FL Studio. The name on this app is a little misleading: Although it says "MultiMedia," it's really an audio tool, and although it says "Linux," it also runs on Windows. Operating System: Windows, Linux6. Frinika Replaces Apple LogicPro ($499), FL Studio Producer Edition ($199) This Java-based audio editor includes a sequencer, midi support, soft synthesizers, audio recorder, piano roll/tracker/notation editing and more. It's billed as a "complete platform for making music with your computer." Operating System: OS Independent

Business Intelligence

8. Jaspersoft Replaces Oracle Business Intelligence Standard($2,000+) The self-proclaimed "most widely used business intelligence software," Jaspersoft products offer reporting, dashboards, analysis and data integration capabilities. The link above primarily promotes the commercial versions of the software, which include paid support. More info on the community versions can be found at JasperForge.org. Operating System: OS Independent

9. Pentaho Replaces Oracle Business Intelligence Standard ($2,000+) Pentaho likes to calls itself "the open source business intelligence leader." It claims to reduce BI costs by 90 percent, and it's also available on an SaaS basis. Operating System: OS Independent

10. Palo BI Suite Replaces Oracle Business Intelligence Standard ($2,000+) Palo offers planning, reporting, analysis, dashboards, consolidation and more. The community version essentially extends the capabilities of Excel or OpenOffice, while the paid premium verison adds more reporting and OLAP modules. Operating System: OS Independent

11. JMagallanes Replaces SAP Crystal Reports ($495), DBxtra ($490 and up) If you only need reporting capabilities, JMagallanes might be right for you. It leverages code from several other open source projects to create static reports, Swing pivot tables for OLAP analysis, and charts. Operating System: OS Independent

12. OpenReports Replaces SAP Crystal Reports ($495), DBxtra ($490 and up) Another Web-based reporting-only BI tool, OpenReports offers flexible scheduling, a variety of output formats, fine-grained security controls, built-in auditing and more. The paid professional version adds capabilities like dashboards, conditional scheduling, and others. Operating System: OS Independent

Business Process Management

13. ProcessMaker Replaces Oracle Business Process Analysis Suite ($10,500+) Web-based ProcessMaker helps simplify workflows with tools for modeling workflows, automatic notification, reporting and optimization. It's available in a free community edition, a subscription-based enterprise edition or in a cloud-based version with a free trial. Operating System: Windows, Linux

CAD

14. BRL-CAD Replaces AutoCAD ($3,995.00 and up) For more than 20 years, the U.S. military has used BRL-CAD for solid modeling. Key features include interactive 3D solid geometry editing, high-performance ray-tracing support, network-distributed framebuffer support, image and signal-processing tools, path-tracing and photon mapping support, a system performance analysis benchmark suite, an embedded scripting interface, and more. Operating System: Windows, Linux, OS X, others.

15. Archimedes Replaces AutoCAD ($3,995.00 and up) Designed for architects, Archimedes is a Java-based CAD program with a fairly minimal feature set. Note that this is different than the GNU Archimedes program for semiconductor design and testing. Operating System: Windows, Linux, OS X

Customer Relationship Management

16. Sugar Community Edition Replaces Sage ACT! ($229.99 and up), Microsoft Dynamics Used by companies like Coca-Cola, Avis, Chevrolet and thousands of others, SugarCRM includes sales and marketing support, e-mail integration, reporting, mobility and support for social networking. In addition to the open source community edition, it's available in a variety of on-premise and cloud-based paid editions. Operating System: OS Independent

Database

17. MySQL Replaces Microsoft SQL Server Standard ($7,171 per processor) Calling itself the “world’s most popular open source database,” Oracle-owned MySQL's customers include Yahoo!, LinkedIn, Alcatel-Lucent, Google, Nokia, YouTube, Craigslist, Sears and Zappos.com. In addition to the free download, it's also available in supported standard, enterprise and cluster carrier-grade editions which are priced per server. Operating System: Windows, Linux, Unix, OS X

18. Firebird Replaces Microsoft SQL Server Standard ($7,171 per processor) Going on 30 years old, Firebird boasts "excellent concurrency, high performance, and powerful language support for stored procedures and triggers." This community-based project isn't owned by any commercial entity, but you can get paid support from a variety of third-party partners. Operating System: Windows, Linux, Unix, OS X, Solaris

19.Kexi Replaces Microsoft Office Access 2010 ($139.95), FileMaker Pro 11 ($299) Calling itself “a long-awaited competitor for programs like MS Access or Filemaker,” KDE's Kexi offers a set of features similar to both applications. Those features include tools for importing files from spreadsheets, Access, CSV files, MySQL or PostgreSQL or for exporting to CSV files, MySQL or PostgreSQL. Operating System: Windows, Linux, OS X

Desktop Publishing

20. Scribus Replaces InDesign CS5 ($699), QuarkXPress($799)

Suitable for professional graphic designers and other artists, Scribus includes features like color separations, CMYK and spot color support, ICC color management, and support for the latest PDF formats. Commercial support is not available, but a wealth of documentation is available both online and in book format. Operating System: Windows, Linux, OS X

Development Tools

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21. KDevelop Replaces Microsoft Visual Studio 2010 Professional with MSDN ($1,199.00) KDE's integrated development environment (IDE) includes a source code editor, project managers, GUI designer, front ends for the GNU Compiler Collection and GNU Debugger, and more. It offers code completion for C/C++, as well as some support for Perl, Python, PHP, Java, Fortran, Ruby, Ada, Pascal, SQL, and Bash. Operating System: Windows, Linux, OS X

22. MonoDevelop Replaces Microsoft Visual Studio 2010 Professional with MSDN ($1,199.00) Designed for .NET developers, this IDE from Novell makes it easier to create C# applications for multiple platforms. It also supports Java, Boo, Visual Basic.NET, Oxygene, CIL, Python, Vala, C and C++. Operating System: Windows, Linux, OS X

23. SharpDevelop Replaces Microsoft Visual Studio 2010 Professional with MSDN ($1,199.00) Like MonoDevelop, SharpDevelop (or #develop) was created as an alternative to Visual Studio for Microsoft's .NET platform. It supports C#, VB.NET and Boo. Operating System: Windows

24. Open BlueDragon Replaces Adobe ColdFusion 9 ($1,299) If you'd like to create Web apps using the ColdFusion Markup Language (CFML), but don't want to spend thousands of dollars on your development tool, Open BlueDragon gives you an open source option. It describes itself as "the world's first truly open source GPL Java and Google App Engine CFML runtime." Operating System: Windows, Linux

E-mail/Collaboration/Groupware

25. Zimbra Replaces Microsoft Exchange ($699 and up) Humbly calling itself "the most capable open source email and collaboration suite available today," Zimbra supports e-mail, shared calendar, shared contacts and document sharing. It works with most e-mail clients (including Outlook, Thunderbird or the Zimbra client), and it's also available in commercially supported versions. Operating System: Linux, Unix, OS X

26. Citadel Replaces Microsoft Exchange ($699 and up) Citadel offers Web-based e-mail, calendar, contacts, bulletin boards, IM, wiki, chat and more. The full version is available for free or you can purchase the hosted service. Operating System: Linux

Enterprise Resource Planning (ERP)

27. OpenERP Replaces Microsoft Dynamics, SAP This full-featured app includes modules for CRM, accounting, point of sale, project management, warehouse management, human resources, purchasing, manufacturing, marketing, invoicing and an application builder. It's available in a free community edition, a paid enterprise edition for on-site deployment, or a subscription-based online edition. Operating System: Windows, Linux

28.Openbravo Replaces Microsoft Dynamics, SAP With more than 2 million downloads, Openbravo boasts that it is the "world’s leading Web-based open source ERP solution." In addition to the free community version, it also comes in paid basic and professional editions that can be deployed on-site or in the cloud. Operating System: OS Independent

29.ADempiere Replaces Microsoft Dynamics, SAP This community-based app offers ERP, CRM and POS functionality. It also integrates with several other open source apps as part of a full suite that adds Web 2.0, authentication, telephony, document management, BI, intranet and data repository capabilities. Operating System: Windows, Linux, OS X, others

30. Phreedom Replaces Microsoft Dynamics, SAP This ERP suite is based on the PhreeBooks accounting software which is incorporated in the package. It includes contacts, inventory, payment, PhreeBooks accounting, reporting and shipping modules, and other add-on modules are also available. Operating System: OS Independent

Foreign Language

31. Step Into Chinese Replaces Rosetta Stone Chinese ($479) While it's admittedly not as full-featured as Rosetta Stone, Step Into Chinese does include information to help you learn the characters, meanings, and pronunciation of more than 26,000 modern Chinese words and concepts. It also has a helpful flashcard feature for learning through repetition. Operating System: Windows, Linux, OS X

32. Zkanji Replaces Rosetta Stone Japanese ($379) This Japanese learning tool includes dictionaries, a flashcard tool and stroke animations. It also has thousands of example sentences and inflection/conjugation information. Operating System: Windows.

33. ZWDisplay Replaces Rosetta Stone Chinese ($479) ZWDisplay aims to help Mandarin students become better readers of the language. It includes both English-Chinese and Chinese-English translation capabilities and a built-in flashcard app. Operating System: Linux

Gateway Security Appliances

34.Endian Firewall Community Replaces Check Point Security Gateways ($675 and up) If your small business has a good IT person, you can build your own security appliance using Endian's community version of its software and an older PC. It includes a firewall, application-level proxies with antivirus support, e-mail virus and spam filtering, Web content filtering and a VPN. Endian also sells pre-configured appliances based on its open source software if you don't want to build your own. Operating System: Linux

35. Untangle Replaces Check Point Security Gateways ($675 and up) Similar to Endian, Untangle can also be used to create your own security appliance, or you can purchase pre-configured appliances. It boasts the "lowest total cost of ownership of any network gateway solution on the market today" and is currently used by more than 30,000 organizations around the world. Operating System: Windows, Linux

Graphics/Drawing

36. Dia Replaces Visio Professional ($559.99) Dia describes itself as "inspired by" Microsoft Visio. Like its inspiration, it makes it easy to draw org charts, UML diagrams, flowcharts, network diagrams, and many other types of charts and diagrams. Operating System: Windows, Linux

37.Gimp Replaces Photoshop CS5 ($699) Short for "GNU Image Manipulation Program," GIMP is a professional-quality image manipulation program that's intuitive enough for amateurs to use. It includes a full suite of painting and image re-touching tools, layers and channels, sub-pixel sampling, quickmask, file format conversion tools, animation capabilities and much more. For the Windows version, you'll need to download Gimp-win. Operating System: Windows, Linux

38.Inkscape Replaces Illustrator ($599), CorelDraw($399) Another tool for graphics professionals, Inkscape is a vector graphics drawing program with many advanced features. The Inkscape website also includes links to a library of open source clip art that you can use freely in your illustrations. Operating System: Windows, Linux, OS X

39. Paint.Net Replaces Photoshop CS5 ($699) This Photoshop alternative has been described by reviewers as "impressive" and "just about perfect." It boasts an intuitive interface, fast performance and some advanced tools like layers, special effects and unlimited history. Operating System: Windows

Mathematics

40. Sage Replaces Mathematica Professional ($1095 and up) Like Mathematica, Sage can solve a wide variety of higher-level math problems and is suitable for advanced students and researchers. You'll get the most functionality out of it if you know the Python programming language. Operating System: Windows, Linux, OS X

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41. Genius Replaces Mathematica Professional ($1095 and up) This tool began as a simple calculator but has morphed into a powerful tool with many similar features as Mathematica (although it doesn't have Mathematica's full feature set). It has its own language (GEL), which can be used by researchers to create new functions. Operating System: Linux, OS X

Office Productivity

42.OpenOffice.org Replaces Microsoft Office ($499) This alternative to Microsoft Office includes word processor (Writer), spreadsheet (Calc), presentation (Impress), graphics (Draw), math/science notation (Math) and database (Base) software. It both reads and writes to Microsoft Office formats, making collaboration easy. Operating System: Windows, Linux, OS X

43.LibreOffice Replaces Microsoft Office ($499) LibreOffice is a community fork of OpenOffice.org. It has all the same capabilities as OpenOffice.org, plus a few new features all its own. Operating System: Windows, Linux, OS X

44. KOffice Replaces Microsoft Office ($499) KDE's office suite includes KWord (word processing), KCells (spreadsheets), Showcase (presentations), Kivio (diagrams and flowcharts) and Artwork (vector graphics). The interface is quite a bit different than Microsoft Office's, but it is still easy to use. Operating System: Windows, Linux

45.NeoOffice Replaces Microsoft Office ($499) In 2003, there was no version of OpenOffice.org for Macs, so the NeoOffice team created one. Even though OpenOffice.org and LibreOffice now offer versions for OS X, development has continued on NeoOffice, and it offers very stable operation and some Mac-specific features that aren't found in the other suites. Operating System: OS X, iOS

Operating System

46.Ubuntu Replaces Windows 7 Professional ($299.99) Canonical's Ubuntu has become one of the most popular Linux distributions. It's very easy for Linux newbies to learn, and it comes in desktop, server and cloud versions.

47. Fedora Replaces Windows 7 Professional ($299.99) Fedora offers a community-supported (free) version of Linux that's very similar to and managed byRedHat. Critics have called it an "amazingly rock-solid operating system."

48. openSUSE. Replaces Windows 7 Professional ($299.99) This is the free version of Novell's SUSE. It comes in both desktop and server versions, and you can find a great deal of documentation and support online.

49.Debian Replaces Windows 7 Professional ($299.99) Debian is the foundation for many other Linux distributions, including Ubuntu. In addition to the core operating system, it includes 29,000 packages of open source software for a wide variety of purposes.

PDF Tools

50.PDFCreator Replaces Adobe Acrobat X Standard ($299) This helpful app lets you create a PDF file from virtually any Windows program. It also creates PNG, JPG, TIFF, BMP, PCX, PS and EPS files as well. Operating System: Windows

Point of Sale

51. Openbravo POS Replaces QuickBooks Point of Sale Basic ($999.95), AccuPOS ($745 and up) Openbravo's POS offering integrates with its ERP software. It's designed to work with touchscreens and includes master data management, warehouse management, reporting and restaurant management capabilities. Operating System: Windows, Linux, OS X

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52. Lemon POS Replaces QuickBooks Point of Sale Basic ($999.95), AccuPOS ($745 and up) Designed for small or micro businesses, Lemon POS offers an easy-to-use interface, a price checker, search capabilities, and more. It can run multiple terminals from a single server and it includes role-based permissions and other security features. Operating System: Linux

Project Management

53. Dotproject Replaces Microsoft Project Professional ($865.95 and up) This eleven-year-old Microsoft Project alternative takes a Web-based approach to project management. Key features include a clean interface, e-mail based trouble/ticket system, hierarchical task lists, discussion forums, and more. Operating System: Windows, Linux

54. GanttProject Replaces Microsoft Project Professional ($865.95 and up), Primavera P6 Professional Project Management ($2,500) While it isn't as full-featured as Project or Primavera, GanttProject does a good job of scheduling tasks, assigning resources and creating Gantt and PERT charts. It reads and writes Microsoft Project files. Operating System: Windows, Linux, OS X

55. Onepoint Project Replaces Microsoft Project Professional ($865.95 and up), Primavera P6 Professional Project Management ($2,500) Onepoint aims to combine a powerful set of features with an easy-to-use interface. It's available in a variety of editions: Basic and open editions are available with a free, open source license. Professional, master, group, and enterprise editions require a paid, commercial license. Operating System: Windows, Linux, OS X

56. OpenProj Replaces Microsoft Project Professional ($865.95 and up), Primavera P6 Professional Project Management ($2,500) Downloaded millions of times, OpenProj is very similar to Microsoft Project and can open both Project and Primavera files. It hasn't been updated in a while and the former Web site is no longer functional, but you can still download the files from SourceForge. Operating System: Windows, Linux, Unix, OS X

57. openXprocess Replaces Microsoft Project Professional ($865.95 and up), Primavera P6 Professional Project Management ($2,500) This unique app combines project management capabilities with process improvement and resource management capabilities, and it includes special features for development teams using Agile or Scrum methodologies. Like most of the others in this category, it can also import Microsoft Project files. Operating System: Windows, Linux

58. ]project-open[ Replaces Microsoft Project Professional ($865.95 and up), Primavera P6 Professional Project Management ($2,500) Used by more than 1,000 companies around the world, project-open (or "po") combines ERP and project management functionality. The core modules are free, but additional modules and support require a fee. Operating System: Windows, Linux

Screenplay Writing

59. Celtx Replaces Final Draft ($299) If you have a great idea for a movie or a TV show, Celtx can help you format your screenplay properly, storyboard scenes and sequences, sketch setups, develop characters, breakdown and tag elements, schedule productions, and more. According to its owners, it’s "the world's first all-in-one media pre-production system." Operating System: Windows, Linux, OS X

Video Tools

60. Blender Replaces AutoDesk Maya ($3,495) Blender offers professional-level 3D animation capabilities. Check out the gallery on the website to see some truly impressive artwork created with this open source tool. Operating System: Windows, Linux, OS X

61. Cinelerra Replaces Adobe Premiere Pro CS5 ($799) Cinelerra invites movie makers to "unleash the 50,000 watt flamethrower of content creation in your UNIX box." It offers professional-quality audio and video compositing and editing. The link above takes you to the corporate-owned project, but there is also a community fork at Cinelerra.org. Operating System: Linux

62. OpenShot Video Editor Replaces Adobe Premiere Pro CS5 ($799) Another Linux-only video editor, OpenShot offers features like multiple tracks, video transitions, compositing and overlays, 3D titles, rotoscoping and more. It also includes features that make it easy to upload your videos to YouTube. Operating System: Linux

63. Kdenlive Replaces Adobe Premiere Pro CS5 ($799) Kdenlive is a video editing tool designed to meet the needs of both amateurs and professionals. It claims to be "the most versatile video editor available today." Operating System: Linux, OS X

64. Avidemux Replaces Adobe Premiere Pro CS5 ($799) While Avidemux isn't quite a full-featured as some of the other video editors on our list, it's good for simple cutting, filtering and encoding tasks. If you're looking for a basic, free video editor that works on Windows, this is a good choice. Operating System: Windows, Linux, OS X

Web Site Design

65. Kompozer Replaces Adobe Dreamweaver ($399), Microsoft Expression Studio 4 Web Professional($149) Designed to make website design as easy as possible, Kompozer offers an intuitive WYSIWYG editor, clean coding tools and integrated file management. Other features include a tabbed interface and support for CSS, JavaScript and XML. Operating System: Windows, Linux, OS X

66. Bluefish Replaces Adobe Dreamweaver ($399), Microsoft Expression Studio 4 Web Professional($149) For Web designers who are more comfortable writing code, Bluefish offers exceptionally fast performance. It comes with an auto-completion feature that supports CSS, CFML, HTML, HTML5, XHTML, Java, JavaScript, PHP, Ruby, Python, SQL, XML and other programming languages. Operating System: Windows, Linux, OS X

67. SeaMonkey Replaces Adobe Dreamweaver ($399), Microsoft Expression Studio 4 Web Professional($149) This unique app combines a Web browser, e-mail, chat and a feedreader with an HTML editor. It's based on Mozilla code, so it should feel familiar to FireFox users. Operating System: Windows, Linux

France to launch school to teach entrepreneurial skills

© AFP

France's innovation minister on Tuesday outlined plans for a school for would-be entrepreneurs. A small business group welcomed the idea but said it clashes with plans to tighten up on an existing simplified system for self-employment.

By Adam Mitchell  (text)

 

Former US president George W. Bush reportedly quipped once that the French have no word forentrepreneur. But the French innovation minister on Tuesday said she wants to launch a school to teach people how to become one.
Of course, the very word “entrepreneur” comes from French, although its meaning in France is broader, meaning “contractor” or “manager” as well as the English connotation of an enterprising individual striking out on his or her own.
Now, Small Business Minister Fleur Pellerin (pictured, above) wants to set up an “ecole de l’entrepreneuriat”. This “school for entrepreneurs”, which Pellerin signalled could be run as a public-private partnership, would offer training in the legal, accounting and administrative aspects of setting up a company in a country with a reputation for red tape.
The school may not be based on a physical location, she also said, adding that it would be open to people of all profiles. This contrasts with France's élite, world-famous business schools such as the HEC, near Paris.
“I don’t want it to be the case any more that certain French people are excluded from entrepreneurship because they lack the right diplomas, because of their origin, their gender or their age,” Pellerin told Le Figaro newspaper.
Discontent?
Tuesday’s announcement comes amid a rumbling swell of discontent among the nearly one million people in France who are on the first administrative rung of the self-employment ladder. These so-called “auto-entrepreneurs”, who benefit from a simplified status created in 2009 by Nicolas Sarkozy’s government, are concerned about the current Socialist government’s plans to change the rules, potentially lowering the amount they can earn without switching to a more traditional business tax regime.
A representative of the “poussins”, or “little chicks” movement of auto-entrepreneurs, Adrien Sergent, told FRANCE 24 he thought Pellerin’s initiative to launch the new school seems to be an “excellent idea”.
But it is, he said, “something of a paradox" to launch the new institution while at the same time “chiselling away” at the auto-entrepreneur system.
Once would-be small business owners have finished their studies at the school, they’ll need a system that will allow them to put the ideas into practice, Sergent said, adding that this is exactly what the auto-entrepreneur status gives them, given that it is simple to use and that entrepreneurs only have to pay tax if they succeed in earning money.
In her remarks in Le Figaro, Pellerin attempted to address concerns of this sort, saying the government does not want to damage the auto-entrepreneur system but that it is important to address concerns such as employers using it to build a payroll in disguise

Is Starting A Business Safer Than Your Job?

by Dan Bischoff

With a slow economy, many people have turned to entrepreneurship as a means to pay the bills. Which begs the question, what’s better today — getting a job or starting a business?

We dug deep to find out the numbers and have compared the risk of starting a business to keeping a job. If you’ve ever thought about starting your own company, take a look at our graphic below to help decide if entrepreneurship is right for you.

What do you think? Is it now more risky to keep a job?

Want this graphic on your site? Please use this embed code:

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How to Use Facebook for Business and Marketing

Posted by Tamar Weinberg 

Welcome searchers! If you’d like help with your social media strategy, including Facebook and Twitter outreach, please feel free to contact me forsocial media consulting.

As much as Facebook may not be kind to businesses, it’s still a tremendously valuable business tool. After all, Facebook could eat the web. In fact, you’re likely spotting the shift; instead of companies posting their URLs on television commercials, they’re asking their followers to join them on Facebook. Therefore, it’s a force to be reckoned with. Let’s just take a look at the potential of Facebook for business for a moment here and review the various options business owners have in order to be effective with Facebook business marketing.

Profile Page versus Fan Page

The average Facebook user uses Facebook not for business but for personal communications. I am one of those users. In fact, I explain my Facebook usage by stating that if you want to follow me in a professional capacity, you can use one ofmy two fan pages. Simply stated, for a business, you should create a Fan Page. Want one? Go here. If you are officially representing your company, you’d want to create an Official Page.

Don’t use a Facebook Group. They are outdated (from Facebook’s early days) and do not support Facebook Markup Language (FBML) or Facebook Apps, so they are not as interactive and thus do not make as strong of an impact. Additionally, don’t create a personal account (a regular Facebook profile page) for your business. You’resupposed to use your real name and you’re also only supposed to have one account. Your Facebook Page should be created under your primary Facebook login. If you elect not to have one, you can still create a Facebook page by following the steps after you fill out the relevant data for your business Facebook Page.

Identification

For your page, consider using a title that’s memorable here because you won’t be able to change it later. It’s preferable to reflect your business and use a business name, not a funny character or other business persona that nobody can relate to. People will be looking for your business on Facebook, so make it easy for them to find you.

Once you get 25 fans, you can set up a username which makes accessing your profile a lot easier. Make sure you apply the username to your Facebook Page, not your personal profile, and be sure to use something memorable that people can find by plugging in the URL. I have a hard time believing that Facebook will addresserrors like these without an intellectual property complaint.

Customizing Your Profile Page

Great! Now that you have opted to create a Fan Page, you need to customize it. Simply stated, you can upload a profile picture (200 by 600 pixels maximum, though there are some reports that 180 by 540 pixels might work instead) and start filling out the relevant details about your business. Tell people how to find you and give them a history. They’re there because they want to learn! Depending on what type of page you are creating (for a business, publication, celebrity, etc.) the text fields differ, but utilize what’s available to you to your advantage. Don’t shy away from giving your community the information needed to find you elsewhere both online and offline.

If you want to be more creative, start thinking about building upon your profile with the aforementioned Facebook Markup Language (FBML). Here’s how to create a memorable Facebook Fan Page via FBML. In short, you’ll need to install the Static FBML app, add a custom tab, and learn the language, which is very similar to HTML, to create content that is appealing to your customers and prospects. Need some inspiration? Check out the screenshots for some current implementations below.

Reese’s uses its Facebook page to welcome users and compels them to join. It also reminds you that Facebook is one of their social destinations on the web, but that you might be interested in their YouTube page. (Their YouTube page, ironically, only features a playlist of videos that they love but does not show any videos made by themselves, such as the process of making a Peanut Butter Cup. Wouldn’t you love to see how they’re made? I know I would.)

Promotional products company rushIMPRINT features on its Facebook page a tab of products for sale. These tabs take the visitor back to their website where they can complete the purchase. This method is smart because it helps build interest on another platform and drives conversions directly on their home base. (Disclosure: I helped plant the social media seeds for rushIMPRINT.)

Offer Deals

Lisa Barone calls this specialized content, and that’s exactly how you should see it. Give people a reason for telling the entire world that they like you.

The big question of return on investment comes up often. How do I know if there’s ROI in Facebook? One way is to see is by giving exclusive deals to Facebook fans. You can elect to do this one of two ways. You can offer deals exclusively to Facebook followers only. Don’t cross promote to Twitter (offer a different incentive on Twitter). Don’t post it on your blog. Don’t share it on your email newsletter. This is a good way of checking specifically if your Facebook efforts are working when you see that the Facebook coupon codes have been redeemed.

On the other hand, you can also share the same discount code across all social platforms. What if you want to offer 10% off? Share the 10OFF discount code for everyone, for example. Let it be posted on every social platform of choice and then watch as it seeds through other communities (which is likely to happen and shows that your marketing is viral).

Of course, you can also just use a Facebook application for that.

Buy something, get something. That’s how Baskin Robbins is doing it besides making an interactive page that visitors might be interested in exploring further.

People interact with brands online because they want deals. Try to offer some every so often.

And while you may not be able to easily run contests within its rules, you have some flexibility with the Wildfire App platform, so consider that as well if you’d like to offer incentives of some kind.

Encourage Community Interaction

In the simplest form, have a Facebook wall and ask your fans questions or share cool company or even personal insights with them. Give them a reason to want to communicate. Better yet, to show that the page is active, give the users control by letting their Fan posts show up on the front page. (Not all companies will be comfortable with this option as it will require frequent moderation.)

Instead of using your updates as the default view, let your fans take over. In the screenshot above, control is shifted to everyone and empowers your community members. As a result, engagement goes up as the page appears very active.

There’s a cost to this, though. The page should appear active but it should also appear like you’re not neglecting your community. Therefore, beyond letting them have control, grab the mic regularly (a few times per week and daily if possible) and engage your community.

The more you engage your community, which could be as simple as asking your followers how they are going to be spending Mother’s Day or sharing a link of interest to your followers, the more visible your page is to your Fan’s friends. After all, every interaction shows up on the Fan’s news feed. And that translates to more visits, which you’ll start seeing when you receive a weekly email from Facebook entitled “Your Weekly Facebook Page Update” that features fun statistics like these:

+41 Fans this week (3,284 total Fans)
31 Wall Posts, Comments, and Likes this week (68 last week)
1,477 visits to your page this week(1,869 visits last week)

You might also be interested in learning more about EdgeRank, Facebook’s own algorithm to determine visibility on a user’s home page. This algorithm takes hold from three main components: (1) the affinity score between two users: how often do they interact?, (2) the type of interaction (is it a like? a comment?, etc.), and (3) the length of time since the action was done. Based on this information, fresh content with actively engaged brand adopters are is key. Give them a reason to be actively engaged. This is basic News Feed Optimization.

Engagement is not limited to wall posts. Post photos of your service and product offerings and invite your fans to do the same. A tremendously wonderful execution of this is on Graco’s photos tab. You’ll learn about their products but you’ll also see a plethora of user-submitted images — complete with cute babies.

And that’s not the only thing you can do to encourage online interaction. Why not solicit reviews from your community to see what they think about you? If you offer great value and have firm believers amongst your midst, you have nothing to fear. Online retailer Newegg isn’t afraid and proudly displays its Facebook reviews for all to see.

Pricing Experiments You Might Not Know, But Can Learn From

Lots of entrepreneurs struggle with pricing. How much to charge? It’s clear that the right price can make all the difference – too low and you miss out on profit; too high and you miss out on sales.

Don’t ask, can’t tell

Asking people what they’d pay for and how much rarely works. For one thing people will tell you what they WANT to pay—which is obviously much less than what your product or service is actually WORTH. Second, what people say and what people do are very different things.

When it comes to money, people are unable to predict accurately whether they’d pay or not. It’s much easier to spend hypothetical dollars than real ones.

Also it’s worth remembering that people really don’t know how much things are worth, what’s a fair price (which is the reason TV-shows like “The Price is Right” can actually exist).

William Poundstone, the author Priceless: The Myth of Fair Value says this:

“People tend to be clueless about prices. Contrary to economic theory, we don’t really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility, he says. We make do with guesstimates and a vague recollection of what things are “supposed to cost.””

People are weird and irrational, and there’s much we don’t understand. Like why do shoppers moving in a counterclockwise direction spend on average $2.00 more at the supermarket?

Why does removing dollar signs from prices (24 instead of $24) increase sales?

What will work for you depends on your industry, product and customer. When you try to replicate what Valve did to increase their revenue 40x, it might not work for you, but then again, why not give it a try?

Here’s a list of pricing experiments and studies you can get ideas from and test on your own business.

The Economist and decoy pricing

Dan Ariely describes this famous example in his amazing book Predictably Irrational. He came across the following subscription offer from The Economist, the magazine (he’s also explaining this in his TED talk here):

Both, the print subscription and Print & web subscription cost the same, $125 dollars. Ariely conducted a study with his 100 bright MIT students. 16 chose option A and 84 option C. Nobody chose the middle option.

So if nobody chose the middle option, why have it? He removed it, and gave the subscription offer to another 100 MIT students. This is what they chose now:

Most people now chose the first option! So the middle option wasn’t useless, but rather helped people make a choice. People have trouble comparing different options, but if 2 of the options given are similar (e.g. same price), it becomes much easier.

The same principle was used with travel packages.

When people were offered to choose a trip to Paris (option A) vs a trip to Rome (option B), they had a hard time choosing. Both places were great, it was hard to compare them.

Now they were offered 3 choices instead of 2: trip to Paris with free breakfast (option A), trip to Paris without breakfast (option A-), trip to Rome with free breakfast (option B). Now overwhelming majority chose option A, trip to Paris with free breakfast. The rationale is that it is easier to compare the two options for Paris than it is to compare Paris and Rome.

A graph to describe this:

So if you add a slightly worse option that is similar to A (call it A-), then it’s easy to see that A is better than A-, hence many people choose that.

How you can use it:  Add a decoy package or plan to your offer page, next to the offer you really want them to take.

The magic of number 9

Go to Wal-Mart and you see prices ending with 9 everywhere. Does it really work? Surely all intelligent people understand that $39 and $40 are basically the same.

Well, in eight studies published from 1987 to 2004 charm prices ($49, $79, $1.49 and so on) were reported to boost sales by an average of 24 percent relative to nearby prices (as per Priceless).

In one of the experiments done by University of Chicago and MIT, a mail order catalog was printed in 3 different versions. One women’s clothing items tested was sold for $39. In experimental versions of the catalog, the company offered the same item for $34 and $44. Each catalog was sent to an identically sized sample.

There were more sales at the charm price of $39 than at either of the other prices, including the cheaper $34. $39 had both greater sales volume and greater profit per sale.

People used to download music for free, then Steve Jobs convinced them to pay. How? By charging 99 cents.

The explanation of why numbers ending with 9 work better has been much debated over the years. Mental rounding alone can’t explain it. Seems that 9 truly is a magic number.

Is there anything that can outsell 9? 

Researches found that sale price markers (with the old price mentioned) were more powerful than mere prices ending with the number nine. In the following split test, the left one won:

9 not so magical after all? Not so fast!

Then they they split tested the winner above with a similar tag, but which had $39 instead of $40:

This had the strongest effect of all.

I’m wondering whether the effect of this price tag could be increased by reducing the font size of $39. Say what?

Marketing professors at Clark University and The University of Connecticut found that consumers perceive sale prices to be a better value when the price is written in a small font rather than a large, bold typeface. In our minds, physical magnitude is related to numerical magnitude.

Oh yeah, when you go to Nordstrom, you don’t see any prices ending with a 9. The subliminal message here is “expect to pay”.

Anchoring and the contrast principle

Do this test at home. Pour water in 3 bowls. Fill one bowl with cold water, the second with hot water and third one with lukewarm water. Now stick one hand in the cold water and the other one in the (not too) hot water. Keep them there for 30 seconds or so. Now put both of your hands into the lukewarm bowl. One hand will feel the water is warm, the other one that it’s cold.

It’s about the contrast. The same principle applies to price. Nothing is cheap or expensive by itself, but compared to something.

Once you’ve seen a $150 burger on the menu, $50 sounds reasonable for a steak. At Ralph Lauren, that $16,995 bag makes a $98 T-shirt look cheap.

What’s the best way to sell a $2000 wristwatch? Right next to a $12 000 watch.

This mental process has a name. It’s called anchoring and adjustment.

Anchoring

In the 1970s by two psychologists by the names of Tversky and Kahneman theorized that suggesting an initial figure to a test subject caused that subject to use that number as a starting point for estimating unknown quantities.

In their study test subjects were told the number 65 and then asked to estimate what percentage of African nations were members of the UN. The average response was 45%. They then tested a second group but salted them with the number 10 and their average response was 25%. Amazingly the group that was primed with the number 65 estimated nearly twice the true answer (23%) while the group primed with the lower number estimated a lower percentage (much more accurately).

Anchoring influences prices

Poundstone describes an experiment done with real estate prices. The researchers invited real estate experts and undergrad students to appraise a home for sale. All the test subjects were given the information a buyers would normally have, including a list of houses that recently sold, nearby houses currently for sale and so on + what the seller had listed the house for.

The subjects were divided into 4 groups, each given a different listing price, and were then asked to estimate what the home was worth.

These were the results:

Listing Price	Avg Estimated Worth by Students	Avg Estimated Worth by Experts
$119,900	$107,916	$111,454
$129,900	$120,457	$123,209
$139,900	$123,785	$124,653
$149,900	$138,885	$127,318

Anchoring worked even on real estate pros that had been selling properties in the area for 10+ years. Next time somebody asks you for a rough estimate or a ballpark figure, make sure it’s high!

How you can use it: Start throwing out high numbers. Add some very expensive products to the selection (that you don’t even intend to sell). If the final price of your service / product is a result of negotiations, start high. If you’re competing on price, state how much others are charging before revealing your price.

Straightforward pricing

Ash Maurya, a startup entrepreneur, published an article on VentureHacks describing his pricing experiments with a photo sharing service.

He tested a single, straightforward $49/yr offer vs 2 plans ($49/yr and $24/yr) vs 3 plans (added a freemium plan).

The result? Surprisingly the single price offer won. Why? His own guess:

“It does pay to align pricing with your overall positioning. Our unique value proposition is built around being “hassle-free and simple” and people seemed to expect that in the pricing model as well.”

It might also be that in these complex and fast times we live in, people yearn for simplicity.

Note: His freemium plan actually converted 12% more, but had the lowest retention. Be careful when offering free plans. You might just end up with a ton of free users to support and pay for. 

How you can use it:  Consider your positioning and see if you can align your pricing to it. If you’re offering different plans right now, experiment with a single plan.

Pay what you wish

Pay what you want is a pricing system where buyers pay any desired amount for a given product, or nothing at all. In some cases, a minimum is set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can also select an amount higher than the standard price.

Suggested price

Suggested price can be a good idea – remember anchoring? Setting a fair suggested price gives the customer a true sense of value. It won’t prevent low offers, but it will keep more buyers in your ballpark.

What about counter-offering lowballs? The danger here would be to appear that you’re just toying with them and it’s not really “pay what you wish”. GetElastic brings this example:

“Coming back with counter-offers is merely e-bargaining. It reveals you have a reserve price, and instead of offering a sale, customers must “guess” how low you’ll go. At worst, customers may feel they are being gamed into pay more than a sale price.

Ashampoo Software (that’s not a typo) gets downright insulting when you sink too low below “regular price.” The snarky dialog box reads a condescending “This offer is much too low. Please enter a reasonable price.” Users don’t have time to play guessing games about what is a reasonable offer only to be ridiculed by a script.”

Gap tried a variation of this too. They offered customers a one-day opportunity to name their price for certain styles of khaki pants on the www.gapmyprice.com microsite. Lowball offers were returned with slightly higher prices by the Gap, which the customer had one chance to accept or decline.

Since they’re not doing anymore, it probably did not go too well.

Well-known PWYW examples

In October 2007, the British band Radiohead launched their latest album – In Rainbows – on the Internet. The band allowed fans to download the album freely and offer, in retribution, any amount of money they would like. Later they disclosed that the download of their new album generated more profit than the accumulated downloads from all previous albums.

Panera Bread Co. used this same idea when it opened its first pay-what-you-want restaurant in Clayton, Mo. The company ended up making over $100,000 in revenue in the first month alone. It opened it’s 4th restaurant of this kind in Portland, and said at the time that about 20 percent of the visitors to the cafes leave more than the suggested amount, 20 percent leave less and 60 percent pay what is suggested.

But 9 months later it’s not doing so well. The Portland café is only making about 60 percent of the revenue of a regular, full-paying location, compared to an 80 percent take in the politer climes of St. Louis and Detroit. Also, the homeless tend to camp out there and stay all day if they aren’t shooed away, so Panera had to hire a bouncer.

It’s important to have fair minded customers for this model to work (homeless and hungry people probably care more about being fed, than being fair).

Combine “pay what you wish” with charity

There’s some research that pay what you wish pricing works best when combined with charity.  Ayelet Gneezy, a marketing professor at the University of California-San Diego, conducted a field experiment at a theme park (sample size: over 113,000).

Customers were presented four different pricing schemes for souvenir photos: a flat fee of $12.95; a flat fee of $12.95 with half going to charity; pay-what-you-wish; and pay-what-you-wish with half going to charity.

At a flat fee of $12.95 per picture, only 0.5% of people purchased a photograph; when customers were told that half the $12.95 purchase price would go to charity, a meager 0.59% purchased a photo. Under the simple pay-what-you-wish variation, 8.39% of people purchased a photo (almost 17 times more than before), but customers paid only $.92 on average.

The final option — pay what you wish, with half the purchase price going to charity — generated big results: purchase rates of 4.49% and an average purchase price of $5.33, resulting in significant profits for the theme park. This is a substantial result, especially since it came from a real setting.

Of course, the anonymity of the Internet removes the social pressure one feels after being served personally by a human being. It’s one thing to have the amount you choose observed and another thing to download stuff without being seen.

The book Smart Pricing suggested that successful pay what you want programs are characterized by:

• A product with low marginal cost
• A fair-minded customer
• A product that can be sold credibly at a wide range of prices
• A strong relationship between buyer and seller
• A very competitive marketplace.

If this describes your business, give “pay what you wish” a go. Let us know the results.

Offering 3 options

The old truth about offering 3 pricing options holds water. Here’s a pricing experiment in selling beer – again from W. Poundstone’s amazing book Priceless.

Image credit

People were offered 2 kinds of beer: premium beer for $2.50 and bargain beer for $1.80. Around 80% chose the more expensive beer.

Now a third beer was introduced, a super bargain beer for $1.60 in addition to the previous two. Now 80% bought the $1.80 beer and the rest $2.50 beer. Nobody bought the cheapest option.

Third time around, they removed the $1.60 beer and replaced with a super premium $3.40 beer. Most people chose the $2.50 beer, a small number $1.80 beer and arounf 10% opted for the most expensive $3.40 beer. Some people will always buy the most expensive option, no matter the price.

You can influence people’s choice by offering different options. Old school sales people also say that offering different price point options will make people choose between your plans, instead of choosing whether to buy your product or not.

How to test it: Try offering 3 packages, and if there is something you really want to sell, make it the middle option.

Price perceptions

I’m sure you know the classic “pennies-a-day” effect: “it costs less than $1 a day!”. NPR stations ask people to donate by joining their dollar-a-day club. Framed in that manner, the donation seems quite reasonable—about the cost of a cup of coffee. Contrast that with what would happen if they asked people to join their “$365 a year” club.

Neil Davidson writes this about price perceptions (in his book on software pricing called Don’t Just Roll the Dice):

“People base their perceived values on reference points. If you’re selling a to-do list application, then people will look around and find another to-do list application. If they search the internet and discover that your competitors sell to-do list applications at $100 then this will set their perception of the right price for all to-do list applications.”

If your product is more expensive than the common reference points, you need to change the perception of the category you’re in.

How did Starbucks get away with starting to charge $3 and more for coffee, when most other cafes were charging $1 or so? They changed the experience of buying coffee, so the perception of what people were getting, changed. It was like a different category product.

They also changed the name. Not just coffee, but Pike’s Place brew or Caramel Macchiato.

If you’re creating a new category, there’s no price reference and people are much more likely to accept any price you name.

How you can use it: If you want to charge more than the market average, look at the competition: how they package their offering; what’s the user experience like, and change that. If you look like a new category, people are more likely to pay up.

On the other hand, if you can profitably sell something much cheaper than the other guys, great. Use their pricing as the reference point and you’ll win.

Context sets perception

You are stranded on a beach on a sweltering day. Your friend offers to go for your favorite brand of beer, but asks what’s the most you’re ready to pay for the beer?

This was the scenario for a pricing experiment conducted by Richard Thaler.

Image credit

They tested two scenarios. In the first one the friend was going to get beer from the only place nearby, a local run-down grocery store. In the second version, he was going to get beer from the bar of a fancy resort hotel. The ambiance of the hotel was irrelevant, as the beer was to be consumed on the beach.

Invariably, Thaler found, subjects agreed to pay more if they are told that the beer is being purchased from an exclusive hotel rather than from a rundown grocery.

It strikes them as unfair to pay the same. This violates the bedrock principle that one Budweiser is worth the same as another, and it suggests that people care as much about being treated fairly as they do about the actual value of what they’re paying for.

Thaler considered what his imaginary grocer could do to boost beer sales. He advised “investing in seemingly superflous luxury or installing a bar”. This would raise expectations about what the proper price of beer would be, resulting in more purchases.

We  happily pay $80 for 6 things in Whole Foods, but would consider that way too much in a regular supermarket.

How you can use it: Invest in seemingly superflous luxury. Use web design or packaging that says “expensive”. 

Can I split test the price?

Technically you can, but A/B testing your price is a dangerous territory. A number of companies (Dell, Amazon and others) in the past have been caught and got in trouble for doing just that, showing different price for the same product to different visitors.

A better and safer approach is to test the price across objects. Don’t test the same product for $19 vs $39. Rather you should test two different products that essentially do the same thing, but just have a different price tag.

Before deciding on your pricing strategy, it’s worthwhile to read Cindy Alvarez’s article where she makes the point that price is not the only cost to consider. When customers consider “what something costs”, they’re actually measuring three main drivers: money (cost), time  (how long will it take to learn?)  and mental energy(how much do I have to think about this?). Take into account the profile of your buyer.

Combine research from this article

It seems to me that you could combine a lot of the research covered here into a single pricing experiment. How about this:

1. You create 3 different plans/packages, and intend to sell mainly the middle one. If your product is expensive, make your website look expensive.
2. The first plan is a decoy. It’s similar to the middle plan, but offers visibly less value while costing almost as much. Think of it as A- (as per The Economist example).
3. Second plan, the one you want to sell, offers good value for money. The price ends with 9. Maybe it even shows that it has been reduced from a previously higher price or it’s a sale (either way, it has to be true / ethical).
4. Third plan is to serve as a contrast to the middle one, it’s role is to anchor in a high figure. Make it much, much more expensive than the middle plan. You don’t actually intend to sell it, but there always the type that wants the most expensive plan – so make sure you can actually deliver on it.

If you decide to give this a try, let me know the results :)

Thanks for reading.