Hi Alex, On 21 Jan 2010, at 09:34, Alastair Rampell wrote:
> Just curious -- when you create a product, how do you try to set/ > test the > price point? My first post here but have been lurking for a while but thought it time to chime in. :) I agree with Andy in that you should price your product for what it's worth in the market you're aiming it at. For my app (currently Windows only as in beta phase for Mac, but I guess the same applies for the Mac world too) I ran a few tests once the app was established over a number of years by doing a few things: 1. Trying prices with / without a discount 2. Lowering the price 3. Increasing the price This allowed me to find the "sweet spot" in the market and I did this over months, noting the results from month to month. You shouldn't increase / decrease the price willy-nilly from week to week as you'll piss off your existing users, that's why it's a long-term thing to find that sweet spot. Oh, and if possible, only put the price up, not down - start at the lowest price which you believe is acceptable and increase from there every couple of months. For example: month 1 - $19.99 month 3 - $29.99 month 5 - $39.99 month 7 - $49.99 month 9 - $69.99 ...etc. until you notice a big fall off in sales or the ratio of sales / cost drops. For example, you may sell 100 copies a month at $19.99 but only 50 a month at $49.99 but, 19.99 x 100 = $1,999 and 50 x $49.99 = $2,499.50 so just because you receive less *sales* at the higher price point, your revenue is up by $500/month along with the "worth" of your software. Of course, the opposite could be true too - that's why you need to perform the test yourself. You may *want* to sell it at $69.99 but if the market only wants to pay $29.99 then that's what you should sell it as. Unless you're Adobe and have built a market share of course. ;-) What I found is that there's a threshold that's too cheap and too expensive and somewhere in the middle is utopia for your product. No one can tell you where to price your product. Not even what the competition's priced at, but a lot of independents seem to sell at $29.99 - as I do. That's the sweet spot for me. Maybe it's because it's less than the price of a video game, not too expensive that you have to think twice and not too cheap that you think the product will not be of any quality. But you have to work that out for *your* market. Hope that helps. All the best, Mark. ------------------------------------------------------------ RB Class "Killer Tool Bar" - theme-based x-platform toolbar www.rbclass.com [Non-text portions of this message have been removed]
