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It might not even be true.
How I doubled the price of my software product and sold ten times as many copies
11–20 of 59 posts
Re: How I doubled the price of my software product and sold ten times as many copies
#12Hmmm. Although increasing the price in his view increased the perceived quality of the products and sales in the consumers eyers, I'm wondering whether the pretty common tactic of showing a higher price and OTO'ing at his lower price would result in a a larger revenue? Like writing the price is 19.99 but for this week only you can get it for 9.99.
Re: How I doubled the price of my software product and sold ten times as many copies
#13They strongly emphasize that "usually" you cannot focus on price and quality at the same time, in business school. When analyzing different aspects of a business, you usually sacrifice one for the other. Not positioning your product to be the cheapest alternative is also emphasized, because to the majority of people, it does give the illusion of a subpar product.
The actual price doesn't matter - it's all about how it's positioned relative to your competitors. Very smart companies will price low with a completely different pricing model, that makes customers feel like they're getting a better price, not because it's cheap, but because of the unique way their own business is structured.
Re: How I doubled the price of my software product and sold ten times as many copies
#14I initially sold my app for $39.95. Trying this trick about 4 years ago, I doubled the price to $79.95. Sales went down. Way down. I backed it off to a 50% increase - $59.95 and sales came back up. The volume was lower than at $39.95, but the revenues were higher.
I also sell site licenses for the product at $995, and I bumped that up 50% to $1495. The sales cycle is typically longer, so I let that price stand for a few months. There were no sales. Dropping it back down to $995, sales resumed as they were before.
Bottom line: There is no magic formula. You need to test the price elasticity to maximize your revenues.
Re: How I doubled the price of my software product and sold ten times as many copies
#15Many apps that are sub $20 would probably benefit from a similar lift. I'm not sure it would work on a $500 business app. But who knows...
Last year I upped the price of my B2B app from $399 to $699 (to coincide with a major new release). The end result is my revenue remained fairly stable, but I stopped getting Indian customers. This is a good thing because they required much more tech support than their US or European counterparts.
Re: How I doubled the price of my software product and sold ten times as many copies
#16Many apps that are sub $20 would probably benefit from a similar lift. I'm not sure it would work on a $500 business app. But who knows...
Last year I upped the price of my B2B app from $399 to $699 (to coincide with a major new release). The end result is my revenue remained fairly stable, but I stopped getting Indian customers. This is a good thing because they required much more tech support than their US or European counterparts.
You probably crossed a common discretionary spend limit - under that amount people might not have to get explicit approval for purchases.
Re: How I doubled the price of my software product and sold ten times as many copies
#17This works in many markets. Look at clothing labels for instance. Take a fairly plain shirt or something, put a tiny logo on it, double the price. It works. My personal example is that I have several music recordings downloadable for free from my website. No one ever listens to them as far as I know. At least I've never randomly received feedback from my music website. I got a record label to carry a track once, sold…
I think you could do this with open source, but it would only last so long. I tried this a few years ago (I found some open source software, fixed bugs and added some features) and sold it.
In the beginning I got sales. But over time, I got less and less because people would just re-package it and give it out for free (they are allowed to do this under the GNU).
I suppose it depends on your demographic of users too. More tech savvy users will figure this out quickly
Re: How I doubled the price of my software product and sold ten times as many copies
#18Possibly referring to http://tbbuck.com/building-a-web-application-that-makes-500-...
Prices went from $9.99/month to $19.99/year to $19.99/month
The take home quote
What difference did increasing the price 12-fold make?
Colour me shocked, surprised and, frankly, happy: it
made *zero* difference!Re: How I doubled the price of my software product and sold ten times as many copies
#19Earlier quoted context omitted.
Last year I upped the price of my B2B app from $399 to $699 (to coincide with a major new release). The end result is my revenue remained fairly stable, but I stopped getting Indian customers. This is a good thing because they required much more tech support than their US or European counterparts.
You probably crossed a common discretionary spend limit - under that amount people might not have to get explicit approval for purchases.
Could be, but the end result is that I have fewer customers who happen to pay more, and the time I spend responding to customer support emails has dropped =)
Re: How I doubled the price of my software product and sold ten times as many copies
#20Can someone who has experimented with re-pricing their product explain the legality of it? I mean can you offer different prices to different customers at the same time? Or do you have to globally shift your pricing? Also, where would you look up the laws for stuff like this?