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Old Nov 28, 2012, 10:48 AM   #1
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Realmac Goes Deep Into Its 'Clear for Mac' Pricing Strategy




Realmac's decision to price the Mac version of its popular todo app Clear at $15 raised some eyebrows, with the company choosing to launch at a much lower price point and raising the price later.

In a blog post today, Realmac's Rob Jarman laid out the company's pricing philosophy, as well as some thoughts on app pricing in general:
Quote:
Like most of us, when it comes to parting with my hard-earned money I'm an advocate for being prudent. To help decide on the value of something, I tend to use a "beer strategy". While trying to decide if I really wanted something I would work out how many pints I could get with the same money, then by missing 1 night out I'd make a guilt and hangover free purchase. By applying this strategy to our latest release of Clear for Mac for example, £6.99 could just about get you 2 pints. So for a piece of software that will increase my productivity, that I'll use every day skipping those two pints is an easy decision.
Quote:
Now how about those Hiut Jeans I've been thinking about for a while? 40 pints. That's a few nights out, so I best start saving! I've chosen both our app Clear and Hiut Jeans for a reason. Both have a story, have had many months of development, and been built by people with a passion for what they do.

[...]

There are other todo list apps available which are cheaper, free even. There are apps which have way more features, and those that cost much, much more. So how does that change our perception of value? In our opinion, it doesn't. You won't find the same user experience with any other apps. The use of gestures is unique, and the simple approach to task management is unparalleled. The care we put into making sure the user experience is the best it can be is evident in every element of the app.

Now lets apply that thought process to the Hiut Jeans, why would I spend £130 on a pair of Jeans when I can pick up a pair for £20 on the high street? Because of the fit and finish. Because they were made by a "Grand Master" seamstress, using a sewing machine in Cardigan Bay, Wales. Because of the story. Because of the way they would make me feel. Because of sustainability. Just because software is a less tangible product, doesn't mean that the making behind the scenes differs in any way.
Article Link: Realmac Goes Deep Into Its 'Clear for Mac' Pricing Strategy
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Old Nov 28, 2012, 10:51 AM   #2
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I used the same strategy in college on whether or not to eat that week
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Old Nov 28, 2012, 10:51 AM   #3
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Hah. Just keeping fishing for logic there. $15 for this app is too much. People would rather have an app that works nearly as well for $2 or $5.
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Old Nov 28, 2012, 10:54 AM   #4
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I'd rather give up 1 pint instead of 2.
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Old Nov 28, 2012, 10:54 AM   #5
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Originally Posted by Ryan.Tanner View Post
Hah. Just keeping fishing for logic there. $15 for this app is too much. People would rather have an app that works nearly as well for $2 or $5.
I don't think they ever actually charged for $15 for this app. The current price is $9.99, which is what it has been at ever since they charged $6.99 during a 48 hour promotional launch period.
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Old Nov 28, 2012, 11:03 AM   #6
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I use notepad or textedit, depending on which system I'm on. I don't get the need for a $15 app like this.
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Old Nov 28, 2012, 11:04 AM   #7
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In other words, if you drink lots of beer and can't remember what you're supposed to do, you can use the Clear to do app so you'll be able to make enough money to buy some designer jeans...
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Old Nov 28, 2012, 11:06 AM   #8
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I'm sure those jeans are as awesome as your high opinion of your own software, but sorry, I won't be helping you buy those jeans.
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Old Nov 28, 2012, 11:16 AM   #9
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The response to this is going to be fairly predictable. Those who write apps will feel some sympathy with RealMac Software. Those who buy apps will say that it's too expensive. Probably.

Being a developer myself I fall into the former category. I'm going through a similar thought process for an iPad app I'm just wrapping up development on. It's taken many hours to create and I've spent a huge amount of time carefully putting it together. I had to bring in an expert for the subject matter I'm working on and she also invested lots of her time in the project. We will split any profit between us.

Similar to RealMac software selling my app for less than a fiver just won't do it justice, however I know that if I charge much more than £1.99 for it, it probably won't sell - however good it is.

When I first started developing apps for the iPhone, before the iPad was in the frame, I remember telling a friend about a project I'd been working on with some colleagues. I'd written the code, one other guy had created the graphics and the other had developed the concept and tested. We'd decided to charge just 99p for it, even though - with 3 of us involved - it would take forever to earn anything close to the money needed to pay for our time. This is before iAd or the move into freemium app models but he couldn't understand why we weren't giving it away for free. And this guy runs his own business. Scary.

The bottom line here is that people want a bargain and don't want to pay a reasonable rate for other people's hard work. They shop in cheap supermarkets and don't understand why their food tastes horrible and buy cheap clothes that in 2 washes are falling to pieces.

I will be flamed to within an inch of my life here, I realise that, but however much I don't like it - that's the way it is.
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Old Nov 28, 2012, 11:19 AM   #10
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I don't see his logic. 2 pints of beer...or $300 USD skinny designer jeans from a denim mill in Japan? Okay guy!
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Old Nov 28, 2012, 11:19 AM   #11
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If it were not a simple copy and paste app from iOS, I would buy it for a reasonable price.

But, people making me pay for the same app doesn't happen. I refuse to buy those apps. I won't support devs who milk me for money without any additional features.
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Old Nov 28, 2012, 12:12 PM   #12
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Quote:
Originally Posted by AJClayton View Post
The response to this is going to be fairly predictable. Those who write apps will feel some sympathy with RealMac Software. Those who buy apps will say that it's too expensive. Probably.

Being a developer myself I fall into the former category. I'm going through a similar thought process for an iPad app I'm just wrapping up development on. It's taken many hours to create and I've spent a huge amount of time carefully putting it together. I had to bring in an expert for the subject matter I'm working on and she also invested lots of her time in the project. We will split any profit between us.

Similar to RealMac software selling my app for less than a fiver just won't do it justice, however I know that if I charge much more than £1.99 for it, it probably won't sell - however good it is.

When I first started developing apps for the iPhone, before the iPad was in the frame, I remember telling a friend about a project I'd been working on with some colleagues. I'd written the code, one other guy had created the graphics and the other had developed the concept and tested. We'd decided to charge just 99p for it, even though - with 3 of us involved - it would take forever to earn anything close to the money needed to pay for our time. This is before iAd or the move into freemium app models but he couldn't understand why we weren't giving it away for free. And this guy runs his own business. Scary.

The bottom line here is that people want a bargain and don't want to pay a reasonable rate for other people's hard work. They shop in cheap supermarkets and don't understand why their food tastes horrible and buy cheap clothes that in 2 washes are falling to pieces.

I will be flamed to within an inch of my life here, I realise that, but however much I don't like it - that's the way it is.
AJ, you raise some good points.

I'm not a developer, but I do run my own little business and people focus way too much on PRICE these days. I'm not sure if it's just a down economic time or the fast paced technological world we know live in where people simply don't have patience or a combination of both.

But regardless, people focus too much on price without worrying/caring about the time gone into a product or how much they'll use it.

They've also forgotten about another key element - VALUE! If there's no value to you, then don't buy it. If there's value and you think it's worth it to you, then buy whatever it is you're hedging on.

There are a number of apps I use all the time and VALUE more than others. If an app out there would do what I want, then I'm all in. The price would be justified to me. Might be worth it to others, might not.

Also, there's something to be said for this company keeping their price as is so they can somewhat control their user group. ie. if they care about their product and want to improve it, I would then think the feedback coming from a user who valued the product at $15 would be someone who actually uses it often and has a vested interest in its future.

Versus joe blow who paid $0.99 for it, hardly uses it and b*tches about it to the company on feedback forms, emails or calls.

I'm like that with my business. My prices are based on my costs, time and the value I provide. If someone comes to me and says, well, joe blow does it for x amount less than you, then I say go to them then. Do i lose some business? For sure.

But I also lose most of the headache clients who don't see nor understand the value. In the past, I did bow down to price pressure, but since I stopped doing that, I'm alot less stressed trying to gain business by working for those who want the work done.

As I told a client just 2 days ago (whom I've done work for in the past), I'd rather go to a movie or have a nap than work for minimum wage on a project that is worth more - especially when he didn't see the value. lol

Cheers,
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Old Nov 28, 2012, 01:19 PM   #13
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Quote:
Originally Posted by AJClayton View Post
The response to this is going to be fairly predictable. Those who write apps will feel some sympathy with RealMac Software. Those who buy apps will say that it's too expensive. Probably.

Being a developer myself I fall into the former category. I'm going through a similar thought process for an iPad app I'm just wrapping up development on. It's taken many hours to create and I've spent a huge amount of time carefully putting it together. I had to bring in an expert for the subject matter I'm working on and she also invested lots of her time in the project. We will split any profit between us.

Similar to RealMac software selling my app for less than a fiver just won't do it justice, however I know that if I charge much more than £1.99 for it, it probably won't sell - however good it is.

When I first started developing apps for the iPhone, before the iPad was in the frame, I remember telling a friend about a project I'd been working on with some colleagues. I'd written the code, one other guy had created the graphics and the other had developed the concept and tested. We'd decided to charge just 99p for it, even though - with 3 of us involved - it would take forever to earn anything close to the money needed to pay for our time. This is before iAd or the move into freemium app models but he couldn't understand why we weren't giving it away for free. And this guy runs his own business. Scary.

The bottom line here is that people want a bargain and don't want to pay a reasonable rate for other people's hard work. They shop in cheap supermarkets and don't understand why their food tastes horrible and buy cheap clothes that in 2 washes are falling to pieces.

I will be flamed to within an inch of my life here, I realise that, but however much I don't like it - that's the way it is.
Listen to this man, guys. He's an App Store developer and still use the 1st gen Mac Pro. 95-99% of developers are not rich at all. Just because some angry pigs and other titles (mostly games) grabs millions it doesn't mean that all others are doing well or even close to that.
Said that I believe Clear app should be priced at $9,95 it would be a fair price. But not $1 or $2 or $4.
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Old Nov 28, 2012, 11:04 AM   #14
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Quote:
Originally Posted by Ryan.Tanner View Post
Hah. Just keeping fishing for logic there. $15 for this app is too much. People would rather have an app that works nearly as well for $2 or $5.
Things is $49 and nobody complains... It's also the benchmark for GTD apps.

I'd add a modification of "Joel on Software" (I think) of software as the development cost plus an opportunity cost to keep the developer in business so you get updates.

When a piece of software is new, it can be very cheap... But there is little guarantee your developer is going to support a $2 app for very long... YOU only paid $2 so you can't really complain. So to build base, they start at a low price... Early adopters absorb the risk of the app not being around long, or beta versions. Now that "early adopter dues" are paid, and the product has rave reviews, they can raise the price as there is less risk to people purchasing now.

RealMac tends to turn over their software a little more than I'd like personally... But the award for paid version turnover has to go to Bento right now... They got no happy users.
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Old Nov 28, 2012, 11:09 AM   #15
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Quote:
Originally Posted by Ryan.Tanner View Post
Hah. Just keeping fishing for logic there. $15 for this app is too much. People would rather have an app that works nearly as well for $2 or $5.
A few years ago, $15 for an Mac app of this caliber would have been considered a bargain. It's interesting how "app store economics" have changed people's expectations.
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Old Nov 28, 2012, 11:14 AM   #16
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Hmm, I think his blog post is a little patronising.

I'll be the judge of whether I find something expensive or not, thanks!
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Old Nov 28, 2012, 11:16 AM   #17
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The app isn't that good. There are plenty of apps like it for much less. So their beer analogy will fall flat. Should I give up beers, or go with another similar app where I won't have to give any beers for... and be just as productive.
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Old Nov 28, 2012, 11:20 AM   #18
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Originally Posted by i-John View Post
The app isn't that good. There are plenty of apps like it for much less. So their beer analogy will fall flat. Should I give up beers, or go with another similar app where I won't have to give any beers for... and be just as productive.
Exactly

I don't care how much a developer works on his app, if it sucks then it is not worth it. The problem with apps on the app store is you can't try them out before you buy it so yea, taking a gamble

Doesn't help when there are usually better cheaper if not free apps

----------

Quote:
Originally Posted by dearfriendx View Post
I don't see his logic. 2 pints of beer...or $300 USD skinny designer jeans from a denim mill in Japan? Okay guy!
I like how he compares himself to expert seamstress jean makers
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Old Nov 28, 2012, 09:10 PM   #19
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Originally Posted by Neuro View Post
Hmm, I think his blog post is a little patronising.

I'll be the judge of whether I find something expensive or not, thanks!
I agree, especially when he's comparing the app against a $300 pair of jeans, as if that's a normal price for jeans and we all lead a lifestyle that allows us to pay such an extravagant price for something as simple as jeans.
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Old Nov 28, 2012, 04:34 PM   #20
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Quote:
Originally Posted by Reason077 View Post
A few years ago, $15 for an Mac app of this caliber would have been considered a bargain. It's interesting how "app store economics" have changed people's expectations.
A few years ago I didn't even try to have mostly legitimately licensed software.

Now, I know I've been a bad boy, but in reality, that's how it works.

So I guess it's more people buy at a cheaper price instead of a select few buy for a high price.


I myself can't see me spending that amount of money for a todo application, sorry, I just can't.

I'm super happy with the stock Reminders app for that.
Also, Evernote's doing an awesome job in conjunction with AwesomeNote.

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Old Nov 29, 2012, 05:53 AM   #21
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Originally Posted by Reason077 View Post
A few years ago, $15 for an Mac app of this caliber would have been considered a bargain. It's interesting how "app store economics" have changed people's expectations.
Dude, no, just no, you always have to consider the context. These are the facts:
- mountain lion upgrade: 20$
- pages (or numbers, or keynote): 20$
- pixelmator: 15$
- Call of duty / GTA San andreas: somewhere around 15$
- etc

- Clear todo-app: ONLY 15$, for a ...wait for it...TODO-APP!? Omg bargaaaain!

Even 10$ is too much, I don't care how much that is in pints or hipster denim jeans. The profit they're making on this is huge. If you were to spend 10 or 15$ on a todo app (that indeed looks very slick and hip), but basically doensn't make you more productive than a simple todo app for 2$, how much would you spend on a car for example? I mean come on, only Apple can pull this high-margin con on people for their hardware etc because they have truy well designed machines/software unmatched by other companies. But an overly expensive todo-app with a zillion alternatives available?
This of course is al IMO .
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Old Nov 29, 2012, 06:52 AM   #22
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Clear for iOS is unreal. Simple and fun.

$10 still feels like too much for the app.

If I were him I'd start listening to consumers and stop justifying a high price with blog posts.

I MIGHT have bought it at $6.99 (which was a stretch, but hey - I loved the iOS version) - but $9.99 is about 99% out of the question.

To actually price the Mac version at $14.99 is nuts.
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Old Nov 29, 2012, 08:53 AM   #23
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Quote:
Originally Posted by D-a-a-n View Post
Dude, no, just no, you always have to consider the context.
I wasn't suggesting that $15 isn't too much in 2012. I'm not planning to buy it . But just a few years ago, $15 for this app wouldn't have seemed like a lot. Our perspectives have changed.

Just like how spending up to $5000 on a high-end laptop was pretty common in 2000. But that would be ridiculously expensive today.

Quote:
- mountain lion upgrade: 20$
- pages (or numbers, or keynote): 20$
- pixelmator: 15$
- Call of duty / GTA San andreas: somewhere around 15$
- etc
You're proving my point here. Each of these items would have been a lot more expensive just a few years ago.
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Old Nov 29, 2012, 09:16 AM   #24
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I like how Jarman implies that people don't know how to value their money. If Clear for Mac sells (or doesn't), it's because they know how to spend their cash. The lecture (ahem, 'advice') isn't warranted.

If he thinks Clear is some kind of 'artisanal' 'curated' app, he could have compared it to whatever overpriced hipsterjunk Best Made Co is trying to sling these days.
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Old Nov 28, 2012, 11:08 AM   #25
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So the real reason they priced it so high is so he can buy some Hiut jeans?
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