The Price

By now your application is out on the market, and has a price, even if that price is “free.” You might be using that suggestion in Chapter 6 about having a paid version and a free version.

Prices are not set in stone and can be changed. If you want to leave your free version without updating it, and always have it be that purposely pale shadow of the paid version, that is up to you. However, I recommend a few updates of the free one, just so you can always get the potential paying audience. In other words, don’t always put all your good eggs in just one basket.

Since the price can be changed, you might want to try an experiment of raising or lowering your application’s price, just to see how your users react. One developer told me that he had a $0.99 application, and he upped the price from $0.99 to $1.99 for a week, then $2.99, then $3.99. What he learned was that he had 100 sales in a week at $0.99, and then he had about 45 sales at $1.99. He made less overall, but it was close. Then he upped the price of the application to $2.99 and he still had 45 sales per week, which comes out to roughly 145 percent of the $0.99 app revenue. That’s not bad.

When to Do a Price Increase

No consumer likes it when inflation occurs. I would like to say that price increases are a necessary evil, and only in place because prices of other things increase, but I would be lying. The fact is, a price increase is very good for you, and if you are pouring a lot into your business, you have to have price increases to justify staying in business. Price increases happen all the time in the business world, and they should happen to you, if you need them.

So when do you do price increases? If your product is at the peak period discussed earlier, this is the best time to get the highest price you can for it. In fact, you might want run a “special” on your application, offering it for a reduced price during part of the peak, and then run it at the regular price for the remainder of the peak. If your application has a season, as discussed earlier in this chapter, this is also a good time for a price increase.

How much you want to increase your price is up to you, but if an increase is too great, then you will have to be prepared for a barrage of criticism. Don’t be surprised if you get a lot of people who divvy out the one-star reviews because they don’t want to pay a high price.

When to Do a Price Decrease

Occasionally, you will discover that your application isn’t working out the way you expected it to. You may discover that there have been very few downloads.

In that case, the only way to possibly increase sales is to mark it down, possibly to permanently free. In Chapter 4, I talked about how some applications are stars, some are cash cows, some are problem children, and some are dogs. If you have a problem child, then you may need bring it down to free just so you can get some advertising profit off it, or else it will become a dog. If the application is so totally hopeless, it might be worth taking it off the market entirely just so it doesn’t demean you or your company by being attached to you.

You may have a simple problem child that just needs to be improved before the real sales on it begin. If so, I recommend a temporary price decrease on the current version. You will have to get the word out through your media outlets, social networks, and other venues that you are doing this, of course.

I have discovered that news of a price reduction can often lead to rumors about the demise of a product. For example, when Nintendo reduced the price of the GameCube to $99, it looked pretty bad for the company. As it turns out, it was a way to compete with Sony and Microsoft until the Wii could be launched. Then the Wii became the great competitor.

In other words, if you spread the word about a price reduction on your application, don’t be surprised if someone else spreads word saying that your application is dying. This is the time when you can prove them wrong by writing an updated version.

You might want to release the updated version during the price decrease. This way, Android users discover something worthwhile at a lower price. Then, by the time the application goes back to the regular price, people will be more willing to pay the regular price.