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13 Comments

Pricing by country. Anyone have any tips?

When someone cancels a paying SongBox sub I send them an automated email. Tonight I got this response from someone:

Hi!
Actually I love songbox but I’m from Turkey and the exchange rate kills me. You are way too expensive for countries like us. 
Thank you!

It has made me really want to focus on geographically isolated pricing. But it seems like a really big piece of work. Does anyone have any pointers?

Thanks

  1. 8

    It's good to get feedback like this but I would do a little more validation before going off and creating some custom price parity functionality.

    "It's too expensive" is a classic scapegoat excuse. People use it when they can't think of a real reason. Reacting to this you might lower your price and find that:

    1. The customer doesn't sign up on the lower price (doh, waste of time!)
    2. The customer signs up on the lower price and churns quickly
    3. The customer signs up on the lower price and stays subscribed for a long period

    I personally haven't seen (3) happen very often.

    I think price sensitive customers are price sensitive at all price levels.

  2. 3

    This syntaxFM podcast episode by Wes Bos is all about how he offers that for his courses. It’s called purchasing power parity. I can’t remember all the details but if I remember correctly it was not straightforward to set up.

    I think it’s an honourable move and one that will most certainly result in some sales that you otherwise would lose out on, but you need to weigh if that decision makes sense for your business.

    Hope this helps!

    https://syntax.fm/show/233/hasty-treat-purchasing-power-parity

  3. 2

    Y-Combinator teaches you that you should always run pricing expiraments. Meaning, you set the price to X and then you measure demand of your product at that price for a month. You then try another price for another month and yet a third. Then you look at gross and net sales to understand which one actually did the best and that's what you should run until you have a reason to re-evaluate pricing (new release, new market, whatever).

    I do think that making specific decisions around your target demographic and market is key. And then emails like this one won't bother you because you'll be able to say, that's not my target market and this buyer is not in my target demographic.

    Most market places and payment processors let you set individual prices for specific countries because it is true - what people in the US, Canada, and Europe can afford is different from say, Southeast Asia. Pricing (and for that matter the laws of supply and demand) is about finding out what the market can bear.

  4. 2

    It's intersting, couldn't find too much stright off search which is a bit surprising
    Maybe you should reconsider your packages
    or test pricing changes/discounts globablly
    and if you don't have much traffic from that region, you might just offer a specific discount code for just him :shrug:

    It does seem like a big job to do more than "cosmentic pricing" (just currency conversions and maybe rounding)
    Also he mentions exchange rates, you might just do a one off setting of prices per currency and consider updating it infrequently (like convert you'r 10$ to currencyX, round it and keep it saved, only update querterly/yearly or by actual responce, lower conversion rates get discounts higher get price hikes at some frequency..)

    But if you want to actually test localised pricing, one idea I gathered is just start with big groupings of areas, think like developed/developing/3rd world coutries kinda big groups or something

    Pricing is surely a big optimisation needing an eye on and constant testing to maximise output

    you could also try to focus on where you currently actually have traffic from..

  5. 1

    Why not use discount for specific countries with https://twitter.com/dannypostmaa/status/1356912861046599684?s=19

    Paritybar as he giving it for free

  6. 1

    Was going to mention the Wes Bos podcast episode and the idea to simply make it known people can message you if they need a lower price. Luckily others beat me to it!

    Some might take advantage here, but it'll be easier (lower tech) than pretty much "challenging" others to get on a VPN.

  7. 1

    Hi Mick,

    I've had some experience with this! It's definitely true that pricing hits differently in different part of the world e.g. I outsource all of my design and content needs to freelancers in Pakistan and the exchange rate of USD:PKR is almost ridiculous. Something as (arguably) on the low-end as a domain for, say, USD 10, might be 5% (again, this doesn't necessarily apply to everyone's experiences) of a person's salary 😅.

    One method I've seen done is to use geolocation to figure out the customer's locations and then offer them a different price (fair pricing, so to speak). However, GOG used to offer "fair pricing" for their games through which they'd absorb the regional price differences but they stopped that in ~2019 due to it being unsustainable. Technically, this would be accomplished by detecting user location and offering them either:

    1. Prices simply converted into their local currency with maybe a 5%-10% "intelligent" deduction, or
    2. Prices in the same default currency but with the same 5%-10% "intelligent" deduction.

    CONS: Anyone can use a VPN or Proxy to take advantage of lower prices.

    Another method I've seen is on Gumroad - an e-book sold by an author asked customers to message if they're in a country with poorer exchange rate and then replied with a lower price (this seems like a quick fix as long as there are fewer customers from said regions).

    I don't think there's an easy way to handle this process unless a noticeable chunk of your users are from geographical regions where the exchange rate is tough in which case you could use the aforementioned techniques. Personally, I think it's a worthwhile technique as it gives you access to a larger pool of potential customers but definitely not something I'd worry about at the start!

    Hope this helps! 😊

  8. 1

    What payment processor do you use?

  9. 0

    I am selling my game https://www.locospartygame.net/ for the same price everywhere, otherwise it would be racist/classist? I mean, giving something more expensive to some people just because they live in the USA and cheaper to people in ZAMBIA is a bit sketchy doesn't it?

    1. 1

      I'm not sure if you're serious, trolling, or just a bit on the uniformed side of things. What you're describing is actually the way the world works.

      Considering the average wage in the US is almost 2x that of Zambia and 8x higher than India, it would be a mistake to price goods and services the same in all three markets. Products are priced according to various factors including cost of living. Import duties, taxes, wages, bureaucracy, tastes/preferences, and a bunch of other factors also play a role in supply, demand, and pricing.

      In fact, you'll find versions of products in specific markets that don't exist here. Like, for example, the Durian Blizzard in Asia. Or no pork or beef products in any Subways in India. I hate to burst your bubble but Coke, water, fast food, clothes, and every other consumable product or service has a different price in each country.

    2. 1

      Wow you're really on a mission today to squeeze a link to your app into every post possible.

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