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How I doubled the price of my software product and sold ten times as many copies

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Re: How I doubled the price of my software product and sold ten times as many copies

#51

Post by JohnBogrand »

stayjin wrote: post #35

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue? I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan sa…

By not maximizing profit you are leaving money on the table that you earned. It's like going to your boss and saying hey why not give me a pay cut. I really deserve less. But I think what is worse is in the corporate world your job may or may not really add value to the product or service but just add cost. When you are pricing your own good and service in essence your capturing the value you created for your consumer.

Re: How I doubled the price of my software product and sold ten times as many copies

#52

Post by petercooper »

stayjin wrote: post #35

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue? I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan sa…

If I have a concrete plan saying that I need to make 40% profit, why should I take 60%, even if someone is willing to give it to me?

Because you might think you can invest the money more wisely than other people in terms of its net benefit. You might invest it into charities you believe in, into research on topics you think is important, employ people you think need jobs, and so on.

Re: How I doubled the price of my software product and sold ten times as many copies

#53

Post by nroach »

The ghost developer is losing sales by going unmentioned in t he linked article. After reading the article, I thought "wow, maybe I should give this software a try- it sounds like its worth the money."

But, with no link to his site nor any info on the product, there goes another lost sale.

Re: How I doubled the price of my software product and sold ten times as many copies

#54

Post by kilian »

credo wrote: post #48

It has been a long time since I read the book, but "Predictably Irrational" (among other things) talks about the same principle - how pricing impacts the perception of quality. It is a great book that I'd recommend to all entrepreneurs and students of economics

I'm reading 'the upside of irrationality' currently, the follow-up of sorts of predictably irrational, and I highly recommend that book as well.

Re: How I doubled the price of my software product and sold ten times as many copies

#55

Post by jodoherty »

stayjin wrote: post #35

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue? I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan sa…

If you can get away with unreasonably high sounding prices, it's only because there's a demand for your service and not enough suppliers with your level of quality. As such, it's only a matter of time before someone comes by and undersells you with a similar service.

So it's not just "more fair" to set reasonable prices -- like your gut suggests -- but they also discourage competitors from appearing.

I guess the real question is whether or not you're willing to risk future competition for the short term benefits of increased profits.

Re: How I doubled the price of my software product and sold ten times as many copies

#57

Post by chopsueyar »

alanfalcon wrote: post #40
mootothemax wrote: post #22

Earlier quoted context omitted.

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 :)

>> In short: don't take pricing advice people who aren't giving you money :) I think that's the key to succeeding in business.

This is the real gem in this whole thread.

Re: How I doubled the price of my software product and sold ten times as many copies

#58

Post by chopsueyar »

nanijoe wrote: post #36
bennesvig wrote: post #28

This 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.

The situation is unique. Most of her clients have next to no experience with hiring or evaluating a Wedding Photographer, so price acts as a greater indication of quality than usual. IF AT&T doubled their pricing for SMS (for example), they would likely lose customers, because we all have a better way of evaluating quality than just price.

Poor example.

Re: How I doubled the price of my software product and sold ten times as many copies

#59

Post by hammock »

nhebb wrote: post #14

I 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…

That's different from what the OP is talking about. You raised prices and volume went down. He raised prices and volume went UP.

At a glance the simple explanation, having some experience in marketing myself, is that $19.99 is a magic price point- 9/10 times you will not see any price point on an infomercial that isn't $19.99 or $19.95. And it's because it's a magic price point. Hard to explain but it works.

If he had gone from $19.99 to 39.99 or from 4.99 to 9.99 it would not ave had this effect- his volumes would have gone down. But if you want to sell something at $14.99, 9.99 or 24.99, don't do it- just sell it at 19.99.

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