App pricing is not a new topic, but after reading this article on Cannonade.net, I decided to share my experience with app price testing. The article I'm referring to discusses the creation of relatively simple apps which still take many hours to develop and tweak. After all the work a developer puts into an app of this type, they turn around and ask themselves, "how much will people pay for this app?"
My first app, iCarc, fell into the same category. After many lunchtime and evening hours, I was ready to submit to the App Store, and launched it at the $1.99 price point. I got one review (read it here), which clearly stated that $0.99 would be a better value. They did have some grounds for their comments and since then I have improved the app considerably, but the point is that anything over a dollar and users begin to get edgy. I believe I actually dropped the price for a while after that too.
Coming from an internet marketing background, I knew that price testing is important, so I decided to find out exactly what users were willing to pay. The process was simple. Starting on a Monday, I set the price of the app to $4.99 and left it that way until the following Monday, at which point I dropped it by a dollar. Five weeks went by and I was back down to $0.99.
The results told me exactly what I needed to know:
1. I actually made sales at the $4.99 level, and indeed at every level below, so the revenue was about the same, just less buyers.
2. $1.99 and $0.99 sold the same number of copies.
iCarc is geared towards a fairly niche market, so I decided that having more buyers was better than having a few at a high price. Also, since $1.99 and $0.99 picked up the same number of sales, I realized that it wasn't the price that was the factor, only the interest in the product.
Ever since, I've been confident in the $1.99 price point. Maybe that's what it comes down to for developers -- having the confidence in their products, knowing what they are worth, and sticking to their prices. If you have a quality app that people want, don't be afraid to charge a little more for it.