By Jeff Hughes
Pricing is often a source of confusion for many app developers because their focus is on building a great app, not necessarily figuring out how to price it.
Pricing for the iTunes App Store is fairly straightforward because it uses $.99 increments. Your app is either $.99, $1.99, $2.99[el]. The Android Market allows you to select any price from zero on up to $200.00.
So, if you take a look at the Android Market you'll see apps priced at $1.02 or $1.23, or whatever price the developer wants to get. Just like Apple, Google takes a 30% cut from all revenues on its store.
The challenge for developers is to figure out where to price their apps. The good news is that prices can be adjusted quickly and easily for your app, but I recommend that you spend some time trying to get your app in the ballpark of its intended price rather than starting out too high.
Starting the price of an app too high can sometimes backfire and dampen sales from the start. You want to launch your app with positive momentum, and pricing is part of that process.
There are several things you'll want to do to set a realistic price for your app. First, look at similar competing apps to get an idea of what is being charged in your category. If you're selling a game app, the chances are it will be around $.99 or $1.99. Non-game apps require more diligent review of your competition.
Let's say that you've written a productivity app that allows you to schedule tasks, meetings, and other activities. Your app allows you to rank activities by importance and export tasks to your email calendar, and so on.
Take time to download, purchase, and review apps similar to yours. Make a list of features that other apps have that yours doesn't, and vice versa. With this information you can make sure your app has all features of a competitor and add more features to your app to gain an edge. You can also review their pricing to see where you might price yours.
The Android Market also provides some graphical information about how sales are doing for any app on its store. The line graph shows up, down, or flat trends over the past 30 days; and provides a range of downloads for a particular app (such as 100,000500,000 downloads).
You can use this information to help you gauge how well the pricing might be working for a particular app based on the download stats shown.
Once you have an idea of prices for competitive apps, you can make a better decision about pricing your app. This is where a little pricing strategy comes into play:
- Do you want to be the low-price leaderoffering great features and the lowest price?
- Do you want to be the premium-priced appwith more features and a higher price that caters to a particular audience?
Both approaches can work, but they require an extremely well-written app. If you take the lower-cost approach don't be afraid to point out on your app store description that your app provides the highest value at the lowest price. Include testimonials of satisfied customers if you have them on your app description and your own product web site.
If you are selling a premium app at a higher price than competitive apps then you'll want to push other benefits that the user will gain from using the app. Comparisons of the app to manual processes work well to convince the customer that they are really not spending all that much money after all. Demonstrate to buyers that they are getting lots more value for their money.
For example, suppose that you wrote an app that helps people improve their singing. You priced your app at $5.99. Other similar apps are $3.99, but you added some recording functionality along with a tutorial and other neat features.
You can help the customer see the value by saying something like this: "For less than the cost of one voice lesson, your singer can improve dramatically." Comparing your app to what the consumer might pay without your app is a good way to reduce the reluctance a buyer may have in buying your app.