Ask yourself this question? Would you hire a lawyer that charges $9.99/hr or one that charges $299/hour? The higher the price the more "Perceived" value it holds. Pricing strategy is an important part of bringing a product to market. Then there is pricing optimization that needs to take place to find the perfect mix of profits and revenue. Luckily for us techies we can iterate as much as possible to find the right mix.
How I doubled the price of my software product and sold ten times as many copies
21–30 of 59 posts
Re: How I doubled the price of my software product and sold ten times as many copies
#22Possibly 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!
Thanks for the mention, but it's independent of me :)
One aspect I didn't mention in my blog post is that I have a hard-core following of four people that email me once every few months complaining about the price. They complain that $9.99/month is too much, $19.99/YEAR is too much, and that I can't be making any sales at $19.99/month. In short: don't take pricing advice people who aren't giving you money :)
Re: How I doubled the price of my software product and sold ten times as many copies
#23This reminds me of the article by jacquesm:
"Double your price! (and no, I'm not kidding)"
http://jacquesmattheij.com/Double+your+price+%28and+no%2C+I%...
Here's the follow up discussion on HN:
Re: How I doubled the price of my software product and sold ten times as many copies
#24Can 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?
Price discrimination is usually perfectly legal, at least in the US. Haven't you ever heard of senior discounts? This doesn't mean there aren't cases where it IS illegal, for example there are no "white people discounts".
As for how to find out, call a lawyer. You really don't want to trust the legality of your business to a Google search.
Re: How I doubled the price of my software product and sold ten times as many copies
#25Ask yourself this question? Would you hire a lawyer that charges $9.99/hr or one that charges $299/hour? The higher the price the more "Perceived" value it holds. Pricing strategy is an important part of bringing a product to market. Then there is pricing optimization that needs to take place to find the perfect mix of profits and revenue. Luckily for us techies we can iterate as much as possible to find the right mi…
Keep in mind, this is relative to the market. Would you pay $9.99/hr for a lawyer if the average was $8/hr?
Re: How I doubled the price of my software product and sold ten times as many copies
#26A funny thing happens to me and not by choice - whenever I'm searching for something on Android's Marketplace, I tend to look at paid apps first whenever I have a specific need and know what I want, even though I'm a cheap bastard. Unfortunately many paid apps that I tried to buy are not available in my country and I don't know why devs feel the need to limit their apps to a certain geographic area, while keeping fre…
> whenever I'm searching for something on Android's Marketplace, I tend to look at paid apps first whenever I have a specific need and know what I want, even though I'm a cheap bastard. I do the same in the Apple App Store. I rarely ever browse through free apps. Prior to the App Store, I also very rarely bought any software. Since iPhones and iPads and all that stuff came out, I'm buying a good 1-3 apps per month on…
Call me cynical, but it's sounding like a major advantage of the App Stores to developers is that it's hard to find good free apps.
Re: How I doubled the price of my software product and sold ten times as many copies
#27I 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…
Here's a theory about the OP:
I am guessing that at $9.99, prospective customers assume that prior customer purchases don't reflect much due diligence -- that people would buy it for $10 "just to see", and just throw it away if bad. Prospectives might then assume that $20 is enough to get priors to research it, or to think twice before recommending it, and that sales at that price thus do reflect quality.
But prospectives don't know anything about priors purchases, right? Maybe prospectives are assuming that the stuff is selling at that price. After all, the seller knows the market best, right? And there is some truth to that assumption: If it hadn't sold at $20, it wouldn't have been around for long.
If that theory makes sense, it may be that your customers felt that $40 was high enough to suggest the consumer validation they needed. Validation was only one component of their decision, "value" was another, and at 80 they didn't feel the value was there. The theory suggests that if you had cut price below 40, your total sales would have fallen.
I imagine that buyers often treat prices like poker bets, and try to extract information about the underlying hand from the value assigned by the holder.
Re: How I doubled the price of my software product and sold ten times as many copies
#28This reminds me of my wedding photographer. She was just starting out and priced her services much lower than what she was worth. A few months later she bumped up her prices significantly and her business exploded. People viewed her lower prices as an indication of low quality despite a quality resume on file.
Re: How I doubled the price of my software product and sold ten times as many copies
#29A funny thing happens to me and not by choice - whenever I'm searching for something on Android's Marketplace, I tend to look at paid apps first whenever I have a specific need and know what I want, even though I'm a cheap bastard. Unfortunately many paid apps that I tried to buy are not available in my country and I don't know why devs feel the need to limit their apps to a certain geographic area, while keeping fre…
> whenever I'm searching for something on Android's Marketplace, I tend to look at paid apps first whenever I have a specific need and know what I want, even though I'm a cheap bastard. I do the same in the Apple App Store. I rarely ever browse through free apps. Prior to the App Store, I also very rarely bought any software. Since iPhones and iPads and all that stuff came out, I'm buying a good 1-3 apps per month on…
But, if anything, the App Store has proven that lower, non-zero, prices are better.
The App Store has also demonstrated that 0.00 is no longer a magic number when your payment information is on file.
Re: How I doubled the price of my software product and sold ten times as many copies
#30An anonymous anecdote about an anonymous product is the best HN can offer today?
That is a good point. But FWIW I personally know several "shareware" developers that told me the same story with their own products. The bottom line is always: $9.99 = bargain bin pricing. Good converting prices start at $29.95 and up for productivity software.