Video: 📱 When Should You Raise the Price of Your App?
Hey! This is the Daily Overpass! My name is Eric and I make apps! Now today, let's ask the question "When should you raise the price of your app?" Okay, so today, I'm coming to you from Snelsmore Common. It's like this Nature Reserve, like this Park, like 20 miles from the office. But I thought I would start off this week with a, you know, just to get out a little bit, take the car out to a little bit of montage at the beginning, you know, that kind of stuff I like to do. Alright, so today, I want to talk about pricing, uh, just both services and and products. So, first of all, last Thursday I was telling you about how earlier in the week I was talking to a prospect and I was – and I gave – we talked about his app and all the stuff he needed done.
And I gave a ballpark figure and he said the words that I'd hate to hear. He said, "Actually, your prices are way lower than the other developers I spoke to…" which just – it messes with my head because first of all, I don't want to be the budget guy, alright? That's my first thing. Well, I don't want them to go based on price. I don't want price to be an issue. Price is always an issue, but I want them to go based on on the competence and all that kind of stuff. So that kind of threw me a little bit. And I also start thinking, hey wait a second. I might not see – is there is there an aspect of this project that I'm not seeing? And then I start to reevaluate but sometimes, developers they just charge less, they either they could do it faster, it doesn't take them as much, they might have the reasons. They're developers might charge less, all this kind of stuff. So, it's always good to get more than one quote. But I don't like hearing that. The thing is the same thing happened on Friday.
I was talking to somebody else and a completely different prospect, they said the same thing. "Oh, wow! That's really reasonable cuz everybody else I've been speaking to and they want to charge a lot more than that!" So anyway, I'm kind of having this confidence thing going on at the moment. So, you know, I have to reevaluate some things. I think I might just raise the rates a little bit and see what happens. Because back when I started off with apps, the same kind of thing happened there. Like when I first released Ear Spy, I released it on the Google Play and on iTunes. Back then I didn't use in-app purchases. I just had the free version and the little thing in there saying if you like it then go – buy the paid version. And the paid version I released for 99 cents on iTunes, the lower tier and I released for 99 cents, well, 69 p99 cents on Google Play. And the only reason I really said it because I thought that was standard. I thought all I need is like 300 people to buy on a day and that would be great! Or a thousand people or whatever.
What I found was my revenue was not really that great, so it was like a year. I just kept it that way and then somebody suggested, "you know, have you thought of increasing the price?" And I thought, "well, I don't know. I don't know if that's what I would pay." So, this is kind of – a lot of things what I paid when I do pricing. I think, well, what would I pay for this and you know, there are people out there who pay more than I would. People who are more affluent and everything. So, I doubled the price and then I tripled the price, then I quadruple the price. I was selling it for like three – three pound ninety-nine in the UK, I think four pounds – four dollars and ninety-nine in the US. And eventually I found that – you know, I was playing around with the price and tried to get – I was at the point where I raised it so high that I was making less money, but it – but I got to the point where I raised it, I think, it was like – I think for me, $2.
99, I think that was the ideal. I was making the same amount of money, fewer purchases, but so that means fewer support issues, fewer complaints, fewer people saying that doesn't work on my phone. But I was still getting the same kind of revenue and this is kind of the way we want to go with the services as well. And you know, a lot of new developers they just say – they just go for the lowest price. They think if it's cheap, people will buy it. But it's not, that's never usually the case. It's like, you know, once going from free to one cent is a bigger jump than going from $1 to $3 because it involves putting in your credit card details or going through and do the approval making any kind of purchase. But going between free and making any kind of purchases is a lot more of a jump than making just increasing the price. So, I mean, this was something that it really increased my revenue, it lowered my – the amount of support that we had to do and this is something that the app is selfless standalone. I didn't have to worry about server costs or anything like that.
Every time we have to do something like that, of course, we want to raise a price and find that happy medium. There are people who have to come to the terms with the fact there are people out there who will pay more than I would for the services that I that I could offer. So, anyway, I hope that helps you a little bit. If you're somebody who's started selling your apps at the lowest price, and you're not making the kind of revenue you want, it usually helps to try to play with that a little bit and try it coz eventually you get to that what economists called the "point of diminishing returns" where you raise this so high that you're just not making the same amount of revenue, but you want to raise it enough so that you're making the same revenue, fewer purchases, well, hopefully more revenue obviously. But, you know, the same amount of purchases and to really get out there and do that. So anyway, I hope that helps a little bit today. I hope you, guys, have a great week. And that's it for today. I'll talk to you tomorrow.