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Charge more for app subscriptions

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Re: Charge more for app subscriptions

#101

Post by dsomers »

sudhirj wrote: post #91
vosper wrote: post #86

Earlier quoted context omitted.

This is cool. I think it would be helpful if the input was in terms of units of currency, rather than Big Macs. Like: I want to charge €10 a month for my product in the EU. Use the Big Mac pricing model to tell me what that is in Brazil. According to your site, a Big Mac in the EU is €4.21 (is it really the same across all EU countries?) which means €1 buys you 0.237 burgers. €10 is therefore 2.37 burgers. At the cur…

Yup, I need that too. Will add it in. The Euro zone is reported as a single economic zone in the index (it's published by the Economist). I'm not sure if the prices are actually exactly the same, but from an economic reference point of view, they ought to be. I'm sure there are differences in the prices within each city that McD operates in as well... the currency prices are probably an average.

I assure you, a Big Mac in the Netherlands will cost more than a Big Mac in Latvia.

Re: Charge more for app subscriptions

#103

Post by Nasrudith »

EduardoBautista wrote: post #14
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.

Customer adoption rate and assuming no real marginal costs. Try to sell something made solo for one million dollars each.

Re: Charge more for app subscriptions

#104

Post by ivanhoe »

vosper wrote: post #86
sudhirj wrote: post #77

Earlier quoted context omitted.

I wrote a tool to calculate product or service prices for different parts of the world based on the Big Mac Index (the price of a local mcdonalds lunch burger). That method makes more sense to me because all your customers have a similar point of reference. McD is thought of as a premium product in some very poor areas, but on the whole they aim for mass market affordability, which makes it a fair comparison. https:/…

This is cool. I think it would be helpful if the input was in terms of units of currency, rather than Big Macs. Like: I want to charge €10 a month for my product in the EU. Use the Big Mac pricing model to tell me what that is in Brazil. According to your site, a Big Mac in the EU is €4.21 (is it really the same across all EU countries?) which means €1 buys you 0.237 burgers. €10 is therefore 2.37 burgers. At the cur…

> is it really the same across all EU countries?

Nope, not at all. Even prices within the country are not the same, e.g. in Croatia the price on the seaside is a bit higher than the prices in Zagreb (the capitol). For comparison, in Zagreb BigMac is under 3 euros, while in say Barcelona it's around 4e. In Denmark it's close to 5, if I remember correctly. It's following fairly closely the local salaries and taxes.

Re: Charge more for app subscriptions

#105

Post by maccard »

gnicholas wrote: post #71
Valkhyr wrote: post #42

The way to fix app "subscriptions" is not to charge more (or less) but to fix the customer-hostile structure of app "subscriptions". The big issue with app "subscriptions" is that they don't actually work like subscriptions. Before the digital age, "subscription" used to mean (and for physical products it still means) that you get regular delivery of something as long as you pay. If you stop paying, you no longer get…

> Developers like to emphasize how they fund sustained future development of an app, but the reality is that when you cancel you usually lose access even to current features (you arguably already helped pay for). I make a browser plugin that functions as a productivity/accessibility tool. When I first started charging, I actually did grandfather in all our existing free users and give them perpetual access to the the…

The jetbrains model only kicks in after a year. If you sub for 1 month, and cancel, you get nothing. If you sub for 12 months, you get a perpetual license for the version that was relesed 12 months before you finished.

Re: Charge more for app subscriptions

#106

Post by ivanhoe »

an_opabinia wrote: post #70
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…

> Maybe you don't care about people in Senegal or Bangladesh or the Phillipines. This brings to mind a more interesting question: nevermind you, but can Senegalese, Bangladeshi and Phillipino developers make money at $1/mo? If the answer is yes, where are all the local apps taking over the world with their low prices? If the answer is no, are you depriving those locales of local producers?

> If the answer is yes, where are all the local apps taking over the world with their low prices?

They're out there, but you've never heard of them because to market them to Western public you have to pay Western prices for ads, and it's out of reach for the most of 3rd world indy devs. And at the local markets it's hard to sell even at very low prices, as customers tend to be more careful with their expenses even at $1/mo prices. In poor(er) countries it's not just that people earn less proportionally while still keeping the same relative buying power. A lot of stuff that you need is not proportionally cheaper, and often it's even more expensive if it's from import or market is small, so people have less money to spend both in the total and relative terms... and because of that free/bootleg versions are the number one choice for any software. And all of that results in lowering the bar, poor overall quality of software products, as it just doesn't make much sense to invest time in polishing products too much, it will not pay out.

Re: Charge more for app subscriptions

#107

Post by unionpivo »

dave_sid wrote: post #95
PaulDavisThe1st wrote: post #56

Earlier quoted context omitted.

I choose to trust people. Partly because I've seen how corrosive not trusting people frequently ends up.

Not being funny, but if you trust people, why don’t you offer a free option also?

It is free, its GPL

http://ardour.org/

I am not affiliated with Ardur, just a happy user

Re: Charge more for app subscriptions

#108

Post by L_226 »

sudhirj wrote: post #77
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…

I wrote a tool to calculate product or service prices for different parts of the world based on the Big Mac Index (the price of a local mcdonalds lunch burger). That method makes more sense to me because all your customers have a similar point of reference. McD is thought of as a premium product in some very poor areas, but on the whole they aim for mass market affordability, which makes it a fair comparison. https:/…

Nice! have you thought about making this available as an API? :)

Re: Charge more for app subscriptions

#109

Post by manquer »

valuearb wrote: post #23

The higher revenues for onetime purchase show the weakness of subscriptions vs the old upgrade model, and I wish Apple would understand it. Subscriptions carry the fear of paying for something you won’t be using, or being nickel and dimed for years on end. Upgrades are a much simpler purchase decision. Am I using the app? Is it offering a good value? Does the upgrade provide new features I want or need at a reasonabl…

There is other side to the story. If your app requires a backend server, it is financially prudent to pay a recurring fee that way hosting charges are taken care of and you can be somewhat sure the service will last as long as there are enough users.

There are plenty of games and apps that are dead because the developers no longer make new sales and the previous money is all spent and the business become unviable and they shutdown the servers.

Recurring charges gives the incentive for the developer to fix bugs and maintain the codebase and not abandon it completely once they loose interest, if original developer looses internest recurring revenue makes the code/service valuable so that a new developer can buy who makes enough in maintaining it.

If the app/service you bought does not have enough paying users to even pay for hosting servers or a part time developer time to maintain it, then no revenue model will save it anyway.

Re: Charge more for app subscriptions

#110

Post by lebaux »

gnicholas wrote: post #60

It looks like this is all based on survey data, which I have found to not correlate particularly well with how people actually behave. Am I misreading this (or not giving survey data enough credit)?

My biggest issue is broad generalization, SaaS is not homogenous. I suspect the author never meant for anyone to take it as universal truth, rather his own observation of his speck of SaaS.
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