You can have focus groups and ask people, but they'll lie to you. Some people
will lie to show off their generosity and wealth. "Heck, yeah, I'd buy a pair
of $400 jeans in a New York Minute!" Other people will lie because they really
want your thing and they think you'll decide to charge less money if they tell
you a low number. "Blogging software? Hmm. I'd pay, at most, 38 cents."
Then you ask another focus group the next day, and this time, the first man to
speak has a crush on a pretty woman in the group, and he wants to impress her,
so he starts talking about how much his car cost and everyone is thinking Big
Numbers. And the day after that, you serve Starbucks during the break, and
while you're in the john everyone unbeknownst to you gets into a side
conversation about paying $4 for a cup of coffee, and they're in a real frugal
mood when you ask them about their willingness to pay.
Then you finally get the focus group to agree that your software is worth $25 a
month, and then you ask them how much they would pay for a permanent license
and the same people just won't go a penny over $100. People seriously can't
Joel Spolsky / "Camels and Rubber Duckies" (on the Pricing of Software)