Pricing our apps
We are in our last few days before we submit and we have now made our final pricing decisions. This is a crucial decision that allows your app to gain traction, reflect value and, of course, potentially earn a bit of revenue that can feed the next set of updates.
As many app developers point out, price is often relative to its context not necessarily perceived absolutely from its value to the user. This is especially difficult in the App Store where the context is thousands of apps at $0.99 or free. As David at App Cubby demonstrates, some of his users seem to be excessively demanding at the $10 price point because they are judging the app among a sea of much cheaper apps.
However, when you dig a little further, you discover that there are plenty of apps that are priced above $20. As Appsfire mentioned recently, ‘If your app brings something real to the table, …then price it accordingly. Don’t succumb to the temptation of the 99 cent app, it’s a lure and only serves to feed the get-rich-quick fairy tales that even kids would find hard to believe.’ This will separate the wheat from the chaff.
As developers, we all agree with the premise that out of the 100,000 or so apps in the App Store, probably 90% of them are of little value. If you then assume that there are approximately 10,000 apps of real value and more than 6,000 are priced above $5, this is uplifting. However, the trick is to get the consumer to understand this! (For all you detail-oriented people out there, I am assuming that, for argument’s sake, only a small percentage of the higher-priced apps are useless.) We are pushing water uphill, though, in the midst of mainstream media describing the App Store as a ‘digital dollar store’ (Jon Fortt of Fortune)
This chart gives you the price distribution for September for non-game apps:
We thought long and hard about the price point for our apps and feel strongly that we want to shift the user’s context so that our price is reasonable not only because of the enormous value it offers the user, but also because relative to similar items providing similar value, the app is actually very inexpensive.
For example, our myPause app, which empowers women by giving them a tool to track their menopause symptoms and treatments, we felt the appropriate context was taking a girlfriend out for a cup of coffee to compare experiences and knowledge. This cost would be around $10, which is our target price, though we have discounted it for the initial launch period as an extra incentive.
For myShoebox, which manages your shoe closet, we felt the appropriate context was time saved in duplicate purchases and misplacing shoes. This is a softer comparison point, but still well beyond the $2.99 we’ve set as our introductory price.
The key is to embed these comparison points into all marketing material so that it is the first comparison our user makes. All developers should take the time to create these relevant price comparisons so that we can educate the consumer and get out of the rut of competing with all the other apps at the lowest price possible.
Understandably, game apps will have a hard time shifting the context for the user’s price sensitivity. Many other apps, including App Cubby which is extremely value-add, should fight aggressively to shift their user’s context. Put this information in your App Store description in the first few lines. It will take time, but users will start to appreciate the difference between quality, feature-rich apps and impulse purchase apps.
Does anyone else feel that we will be able to shift the customers away from the $0.99 comparable and focus them on the more relevant comparatives?
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