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22 Comments

Would people *actually* buy my app if I lower the price?

I have an app that I charge $5/mo for. People occasionally tell me it costs too much and I should lower the price. But would $2 or $3/mo actually get them to buy?

  1. My intuition says no, and what they're actually saying is that they don't want an ongoing subscription. Has anyone actually tested this hypothesis?

  2. How have you successfully triangulated on the right price for your product?

(For context, my app helps you remember names and details about people. It's aimed at the consumer market.)

  1. 4

    For the users that you do have, what aspects of the app provide them the most value? Based on the info on the landing page, I don't see why I'd pay for this when most of the functionality feels like stuff I already do with Google Keep for free.

    If people are paying, there must be some core value prop they're achieving that people like me aren't seeing. At the dollar levels you're talking about, the 2 bucks a month don't matter...it's the initial friction about paying anything that's causing the lack of new customers.

    What's the magic bullet or killer capability that makes this 10x better than just tracking stuff in a spreadsheet or note-taking app? Find that from your existing customers, then focus all your efforts around that.

    1. 1

      I second this. I personally would never pay for a note-taking app, unless there is a USP that truly makes a difference and has an edge on the competitors.

    2. 1

      it's the initial friction about paying anything that's causing the lack of new customers.
      I agree
      What's the magic bullet or killer capability that makes this 10x better than just tracking stuff in a spreadsheet or note-taking app
      You're right, I need to focus less about the functionality in absolute terms, and focus more on how it's better than what people are doing already.

  2. 3

    Pricing should reflect the value that customers get, and thus I think that your pricing model is wrong.

    Do people use this app daily and try to remember things? Do they input new people every day or every few days? For a really huge group of people I don' think this is the case.

    To better reflect that, just put a one-time price on the app, you will get more cash upfront and you can avoid some of your users thinking "what is this thing that charges $5/mo that I rarely use?".

    Also, your infrastructure costs will never be that high so that it has to scale with number of users proportionally, so it's kind of unjustified there as well.

    Cheers.

    1. 1

      The one time cost is a dealbreaker for creating a sustainable business on the App Store. The cost of acquiring a new customer will always be higher than the cost of the app. To your point, that means you need to find customers who find ongoing value in the product.

      1. 2

        If cost of customer acquisition is too high and size of market of people that find an ongoing value is too small, maybe it's time to reevaluate the business itself.

  3. 3

    As opposed to asking for less money per month, I'd offer a $50 per year plan. it's less per month but your cash flow is better off.

    1. 1

      Are you suggesting having only the year plan? I actually do offer that exact price for one now but it makes up for a small proportion of users.

      1. 5

        My pricing for subscription started exactly like yours $5/mo and $50/yr. Recently I bumped it up to $8/mo and $60/yr and incentivized the year plan. There are less monthly subscribers, and a huge uptick in yearly sales. User lifetime values are shooting up from $20 to $30. Even with less sales, I'm in a better situation, and sales can potentially capture the people who now think it is too expensive.

        If you find your lifetime value is low, as in subs stay 4 months on avg, incentivize the yearly if you can.

        1. 1

          I like your approach. How do you do the incentivizing (e.g. occasional sales? onboarding offers?) I'm curious what's worked for you.

          1. 1

            My product is design assets and a tool that makes it quick and easy to customize. Yearly subs get access to the entire collection instantly, while it takes monthly subs 8 months to access everything since content drips. Then the pricing helps too, $8/mo or $5/mo paid yearly. The one disadvantage is monthly revenue is more volatile. While it was nice to consistently see monthly build, I'm 90% sure pushing yearly is more profitable.

            I haven't done much for offers successfully, but if I ever get more serious about ad spends, I would definitely leverage time-sensitive discounts.

      2. 2

        You can try any of these as well:

        $100 Lifetime Deal
        $3 trial for 1 month, $50 per year there after.

        Ahrefs has a $7 1 week trial
        hustle's trends is 50% of for the first year.

        1. 1

          Hmmm 🤔 I like the idea of a standing first year 50% off. Since the app becomes more valuable the longer someone uses it, getting people to that first year is key.

  4. 2

    People occasionally tell me it costs too much and I should lower the price.

    Ask them for what more features they would pay $5.

    But would $2 or $3/mo actually get them to buy?

    Depends vastly upon the demography and the app itself. Remember the time an app named 'I Am Rich' , which just displayed a screen telling the same and was downloaded for $999? People bought it before being pulled off by Apple.

    At the end of the day, what matters is whether your app solves the problem and fills in the need gap to such an extent that the customer is willing to pay what you ask for getting their problem solved.

  5. 2

    At $2/mo you have to capture 2.5 more subscribers. And even then you come out worse to more transaction fees.

    If anyone complained about price, I'd give them a coupon for 50% off and see if they'd actually put their money where there mouth is, without having to lower it for everyone.

  6. 1

    Your 'my app' link in the post is broken, its not going to revereapp.com

  7. 1

    My recommendation: just run an experiment.

    Change the price to $2.99 for a couple of weeks and see what happens. If revenues go up, then keep it there. If revenues go down, just revert the price back to $4.99. Who knows, maybe the right answer is to increase price to $6.99.

    Changing prices in the app store is pretty easy, and you don't need to sweat the decision.

  8. 1

    Not sure if lowering the cost lower than $5 a month will increase customer very much. I tend to agree with the others saying that it's tough to justify paying for this app unless they see an obvious value-add that Revere can provide outside of existing free tools (e.g. a spreadsheet or note taking app).

    BTW, this comes from a bit of experience with my app Tech Job Hunt (https://techjobhunt.com/) where a lot of the features I provide can be replicated using a spreadsheet.

  9. 1

    For a bit of context, this is one of the reviews on the app store.

    However, when I rate it 5-stars, it is for the free version. When you pay the subscription, it is not worth it. If the price was cut in half it may seem a bit more reasonable. You are essentially paying $6 to make folders, and get birthday updates (which most people get from Facebook anyways). Especially in light of all the other subscriptions you can get out there, the price is to high for the actual value and features added.

    To me this reads like people simply don't see value in the features you're providing for the premium subscription. My guess is that you haven't found that killer feature people would pay for yet. I don't know what it is, but there's probably something.

    People occasionally tell me it costs too much and I should lower the price. But would $2 or $3/mo actually get them to buy?

    What I would try to test this is have a "limited time deal" where you lower the price for a week and make it obvious in the app that they can get the premium subscription at this lower price point.

    However, keep in mind the physiological effect of doing this. It's not the same as lowering the price permanently. In fact, it's probably better to keep the price high and periodically lower the price so that the perceived value is higher even if not many people sign up at the higher price.

  10. 1

    2$...don't forget payment processing fees that will take some $$ also. So it's less than 2$ in the pocket

  11. 1

    It's hard to say. In my mind, I think your intuition may be spot on here. I took a look at your app and the idea is super cool and something I myself would find some value in, but would I use it regularly enough to warrant $5/mo? I don't think I would, but that's just me. With that said, if the app had an upfront cost rather than a subscription, I could see myself being more likely to pay knowing it's a single cost and if I only need to use the app once every couple weeks, I don't feel too bad about that investment.

    I hope that helps provide another point of view!

    1. 2

      That point of view is useful, thank you. I think a lot of people go through the same train of thought you described.

      The problem with one-time payments is that even if it was something outrageous for an app, like $30, it would be hard to make that into a sustainable business because your cost to get them would be close/more than that and you'd have to battle for each one... and you'd get nothing from your loyal users.

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