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View Full Version : Weird, complete flat app pricing curve?




firewood
Nov 25, 2008, 10:42 AM
I've experimented with several different price points for a couple of my apps. Did a significant decrease in price to $0.99 increase the number of daily purchases? Yes, but after averaging, by almost exactly the ratio of the price drop. Total revenue (units*price) stayed about the same. Did doubling a price cause a decrease in the number of daily purchases? Yes, by about half. Total revenue stayed about the same.

Usually, there's some sort of peak in a pricing curve, where a seller can maximize revenue for a given product. But my 2 apps seem to be making the same amount of revenue at 3 completely different price points.

Has anyone else noticed something this?

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nottooshabby
Nov 25, 2008, 10:49 AM
I've experimented with several different price points for a couple of my apps. Did a significant decrease in price to $0.99 increase the number of daily purchases? Yes, but after averaging, by almost exactly the ratio of the price drop. Total revenue (units*price) stayed about the same. Did doubling a price cause a decrease in the number of daily purchases? Yes, by about half. Total revenue stayed about the same.

Usually, there's some sort of peak in a pricing curve, where a seller can maximize revenue for a given product. But my 2 apps seem to be making the same amount of revenue at 3 completely different price points.

Has anyone else noticed something this?

.


I raised my price and noticed the same thing. Sales dropped, but revenue basically stayed flat, within a few dollars. That left me with the conundrum, is it better to be cheaper or more expensive if the revenue is the same?

jnic
Nov 25, 2008, 11:00 AM
That left me with the conundrum, is it better to be cheaper or more expensive if the revenue is the same?

Perhaps start high and drop gradually, and hope to fill up the demand curve?

No actual figures to add to this thread, just bumping because it's fascinating :)

firewood
Nov 25, 2008, 11:16 AM
Cheap raises the visibility of your brand in the app store (higher up in any popularity sort), increases word-of-mouth advertising (due to a greater number of users), and discourages commercial competitors.

More expensive is less likely to saturate the market quickly (revenue might last longer), and lowers potential support costs (less web site bandwidth and support email).

If every developer did a predictable gradual price drop, this would only train customers to wait.

Any other factors?

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