Raise your prices to sell more

Re:Raise your prices to sell more by danso on Wednesday February 06, 2013 @09:37AM (#5176534)

I don't think we know enough about the OP's market and competition to be able to agree with the title's conclusion...as others have pointed out, the OP may have just been underpriced to begin with.

An obvious counterpoint: I doubt higher prices has any correlation with sales numbers in the iOS market. And while there are successful high-priced games (Minecraft at $6.99), that's because they are high quality games. I think Minecraft would undoubtedly sell more units if it were at $2.99.

Another thing to consider is the psychological "anchor effect"; Dan Kahneman (Nobel Prize in Economics) conducted a famous experiment in which college students were influenced by a number they knew to be completely random:

    Amos and I once rigged a wheel of fortune. It was marked 
    from 0 to 100, but we had it built so that it would stop 
    only at 10 or 65. We recruited students of the 
    University of Oregon as participants in our experiment. 
    One of us would stand in front of a small group, spin 
    the wheel, and ask them to write down the number on 
    which the wheel stopped, which of course was either 10 
    or 65.

    We then asked them 2 questions:

     1. Is the percentage of African nations among UN members larger or smaller than the number you just wrote?

     2. What is your best guess of the percentage of African nations in the UN?


     The spin of a wheel of fortune – even one that is not 
     rigged – cannot possibly yield useful information about 
     anything, and the participants in our experiment should 
     simply have ignored it. But they did not ignore it. The 
     average estimates of those who saw 10 and 65 were 
     25% and 45%, respectively.

From "Thinking Fast, and Slow" http://www.amazon.com/gp/product/B00555X8OA/ref=as_li_ss_tl?...

The summary: there is room in setting initial prices to convince people think they should be paying a higher price.

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Re:Raise your prices to sell more by orangethirty on Wednesday February 06, 2013 @11:21AM (#5177169)

I think Minecraft would undoubtedly sell more units if it were at $2.99.

I disagree, because Minecraft is already a strong, developed brand. The $6.99 price point is actually cheap when compared to the price point of the PC version ($26.95). Anchoring at work.

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Re:Raise your prices to sell more by pytrin on Wednesday February 06, 2013 @09:52AM (#5176608)

I'm the OP - I specifically mention the App Store as a counter example - my article is focused on business and developer oriented software - a completely different audience.

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Re:Raise your prices to sell more by drd on Wednesday February 06, 2013 @11:18AM (#5177146)

Higher price is justifiable from a developer point of view as long as the support is included. There are gazillions lines of crappy code out there. A general rule in software management is “try to reduce your dependency as much as possible.” Not because of the price of dependency, but, because of the maintenance costs that the dependency will create for you later on.

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Re:Raise your prices to sell more by oliland on Wednesday February 06, 2013 @10:18AM (#5176754)

If your bottom line is gross revenue, why not just A/B test your pricing?

In an app store this is really simple. Pitch the app at a different price tier every week (ideally during a stable period with no major public holidays or obvious seasonal variations). One week will make more money than most. That's your price.

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Re:Raise your prices to sell more by adambenayoun on Wednesday February 06, 2013 @05:51PM (#5179424)

What you're describing is not really A/B testing.

Real A/B testing would mean to simultaneously show to different users, different pricing for the same product and I believe in some jurisdiction this could get you into a trouble legally speaking.

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