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Charge more for app subscriptions

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Re: Charge more for app subscriptions

#11

Post by dguo »

Whenever I read "charge more," I think of the implicit assumption that service owners want to maximize total profit.

While I can understand that desire, there's no law of nature that says we have to act in a profit-maximizing manner. A SaaS service could have a different goal: running a sustainable business that benefits as many people as possible.

So they could choose to charge a deliberately low amount such that more people can afford to or are willing to pay for it, while also charging a high enough amount that the business is financially sustainable.

Re: Charge more for app subscriptions

#12

Post by pnw_hazor »

Some people go way out the their way to avoid toll bridges. Especially, if the bulk of their trip is otherwise toll free.

For me, if there is a free website app paired with a pay-to-play mobile app, I will never buy (or subscribe to) the mobile app because I consider that a bait-and-switch. If the whole stack was pay-to-play and I want the service offered I will pay.

Re: Charge more for app subscriptions

#13

Post by cercatrova »

input_sh wrote: post #10
cercatrova wrote: post #5

I watched a very interesting video about selling to consumers as opposed to businesses [0]. The key takeaway is that consumers' target price to pay is actually $0. Therefore, any price above that, even a 3 to 4 dollar a month difference, is seen as extremely annoying to them, because again, they actually only want to pay nothing. This is why you should, if not charging business, at least charge prices that are suffic…

In an ideal world where people have a decent disposable income, those arguments might be true. In the real world, it's not that "people don't want to pay anything", it's that people have a small amount of money to throw at things for a marginally better experience. I sure like keyboard-driven apps, but I'm never going to pay as much as I pay for my entire Internet package for any online service. Hell, all of them I p…

Yes, it seems your comment is reinforcing my point. Consumers like you don't want to pay $30 and that's fine, you are not their target audience. You may like keyboard-driven apps but you don't like them enough to pay $30, so in terms of microeconomics, you don't believe you'll get as much value from the tool as you'd spend. Again, that is fine, because the company should only target customers who do realize your product's value.

One may say that the takeaway is basically, target prosumers and rich customers who see the value of the product in order to make the most money. That they are price insensitive is also great as a dev, because, yes, you can increase the price multifold and not lose customers, which increases your revenue overall.

Re: Charge more for app subscriptions

#14

Post by EduardoBautista »

dguo wrote: post #11

Whenever I read "charge more," I think of the implicit assumption that service owners want to maximize total profit. While I can understand that desire, there's no law of nature that says we have to act in a profit-maximizing manner. A SaaS service could have a different goal: running a sustainable business that benefits as many people as possible. So they could choose to charge a deliberately low amount such that mo…

I can’t see how charging less would help with running a sustainable business. I would imagine charging more would help with that.

Re: Charge more for app subscriptions

#15

Post by seanwilson »

> Looking at the estimates for revenue per 10,000 visitors clearly shows as well, we would make 2x as much revenue at $100/year than we would at just $20/year!

Maybe I missed it, but it's worth pointing out that while in the table the one-time cost makes less than the yearly pricing plans, that's only for the first year - presumably the yearly plans come out ahead the next year and even more the year after as long as the user retention is decent.

For my paid Chrome extension (https://www.checkbot.io/), I've experimented with yearly only, then quarterly + yearly, then monthly + yearly plans. I think quarterly plans are worth exploring (I don't see them often) as it means users get longer to evaluate the service before they decide if they're going to renew. They can be a pain to be clear about in pricing tables though.

Re: Charge more for app subscriptions

#16

Post by jrochkind1 »

egypturnash wrote: post #8

Man I dunno, for the sector they're in, folks are pretty likely to already be paying for a subscription to the Adobe suite, and honestly I think the whole "subscription" thing is gonna strangle Adobe in the future when there's a generation of artists who grew up using other tools that were buy once, use until upgrading something else breaks it, and/or were easier to pirate. Also I have a piece of hardware I bought fr…

> in the future when there's a generation of artists who grew up using other tools that were buy once, use until upgrading something else breaks it, and/or were easier to pirate.

In the future when? Isn't that now? Adobe changed to subscription model in 2013. Everyone that is paying subscription now grew up with the buy-once model, right? In the future, people will have grown up with adobe's current subscription model.

Re: Charge more for app subscriptions

#17

Post by OJFord »

PaulDavisThe1st wrote: post #9

This analysis is very US/Euro-centric. Bumping the price from US$20 to US$100 might indeed allow you to focus more on your most dedicated customers . It also bumps the price way above anything that billions of people around the world can pay for such a thing. At Ardour, we have 3 subscription price levels: Regular: US$10/month Low Cost: US$4/month Developing World: US$1/month We leave it to users to decide which cate…

Regional price discrimination is nothing new, but I haven't heard of making it buyers' choice before - why aren't you using IP or some other method of determining region?

The obvious answer is that it's defeatable, but if the alternative is then to make it a radio button (trivially 'defeatable'), that's clearly not it.

Re: Charge more for app subscriptions

#18

Post by PaulDavisThe1st »

OJFord wrote: post #17
PaulDavisThe1st wrote: post #9

This analysis is very US/Euro-centric. Bumping the price from US$20 to US$100 might indeed allow you to focus more on your most dedicated customers . It also bumps the price way above anything that billions of people around the world can pay for such a thing. At Ardour, we have 3 subscription price levels: Regular: US$10/month Low Cost: US$4/month Developing World: US$1/month We leave it to users to decide which cate…

Regional price discrimination is nothing new, but I haven't heard of making it buyers' choice before - why aren't you using IP or some other method of determining region? The obvious answer is that it's defeatable, but if the alternative is then to make it a radio button (trivially 'defeatable'), that's clearly not it.

It's not intended to be non-defeatable. It's intended to recognize enormous disparities in income worldwide (and sometimes even within the same city).

The user/buyer who elects to use a one-time payment gets to pick their own price, too: the default is pre-seeded based on OECD data on the cost of a mid-prize restaurant meal for two without alcohol, combined with IP address.

Our motto has been (thus far): it doesn't matter if everybody pays for it, it only matters if enough people pay for it.

Re: Charge more for app subscriptions

#19

Post by seanwilson »

OJFord wrote: post #17
PaulDavisThe1st wrote: post #9

This analysis is very US/Euro-centric. Bumping the price from US$20 to US$100 might indeed allow you to focus more on your most dedicated customers . It also bumps the price way above anything that billions of people around the world can pay for such a thing. At Ardour, we have 3 subscription price levels: Regular: US$10/month Low Cost: US$4/month Developing World: US$1/month We leave it to users to decide which cate…

Regional price discrimination is nothing new, but I haven't heard of making it buyers' choice before - why aren't you using IP or some other method of determining region? The obvious answer is that it's defeatable, but if the alternative is then to make it a radio button (trivially 'defeatable'), that's clearly not it.

> The obvious answer is that it's defeatable, but if the alternative is then to make it a radio button (trivially 'defeatable'), that's clearly not it.

Do people really do this? I use Paddle for subscription payments and they offer regional pricing plus they charge country specific tax and VAT processing at checkout. If a business tried to get around this, wouldn't they be at risk of accountancy issues?

Re: Charge more for app subscriptions

#20

Post by seanwilson »

PaulDavisThe1st wrote: post #9

This analysis is very US/Euro-centric. Bumping the price from US$20 to US$100 might indeed allow you to focus more on your most dedicated customers . It also bumps the price way above anything that billions of people around the world can pay for such a thing. At Ardour, we have 3 subscription price levels: Regular: US$10/month Low Cost: US$4/month Developing World: US$1/month We leave it to users to decide which cate…

> We leave it to users to decide which category to select. Maybe you don't care about people in Senegal or Bangladesh or the Phillipines. That's certain an option, but some demonstration that this has crossed your mind is probably a good idea.

Is there some automated way you could come up with reasonable pricing based on IP detected country?

I use Paddle for payments and they offer localised pricing - you either enter the country specific prices manually or you enter e.g. the USD price and it sets a price for each country based on converting this by the exchange rate. Is there a better way than using the exchange rate?

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