* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

We're closed, folks!

Links:

» Business of Software FAQ
» The Business of Software Conference (held every fall, usually in Boston)
» Forum guidelines (Please read before posting!)

Moderators:

Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Discount for limited time?

In another post I discussed how someone said my app was too expensive.  So, if I were to reduce it just for a limited time, what would the reaction be from people who paid full price in the last month?  Do you think they'd want a partial refund, etc?  I really don't want to refund them just because I chose to have a sale.
PSB136 Send private email
Sunday, July 19, 2015
 
 
BTW, the only reason I want to do this, is not to appease that person who complained, but to truly see if it does sell better at a lower price.  If it does, I may drop the price permanently.
PSB136 Send private email
Sunday, July 19, 2015
 
 
If I buy an iOS app today and it goes on sale or becomes free tomorrow, how big are my chances to get a refund?

Then, not many people check the web sites of all their app vendors frequently. Even if a recent purchaser notices _and_ bothers to ask for a partial refund, issue it immediately with thanks and kindly ask them to spread the word about your offer.

Depending on what your upgrade policy is, you may wish to run such experiments when releasing a new version. Call it an introductory discount.

In the meantime, you can try this: if your price is $19.99, raise your list price to $24.99 and immediately run a 20% limited time sale. When the time runs up, run a 10-15% sale for some more time, then take a break. Need I explain how this works?
Dmitry Leskov @Home Send private email
Sunday, July 19, 2015
 
 
@PSB136, you can offer your product on a website like bitsdujour.com, with, say, 30 or 50% discount. This is a one day promotion. After it's over, you can analyze reports of this offer and make some conclusions.

For me, discounts never worked :)
Kuzmitskiy Dmitry Send private email
Sunday, July 19, 2015
 
 
You could send that person a discount code to get N% off the normal retail price, that way you don't have to reduce the public price. Discount codes are typically very easy to setup with the payment processor.
maxr Send private email
Sunday, July 19, 2015
 
 
PSB, how many people do you think have refrained from buying it at $20, but will readily jump to buy it when it becomes $10?

You must be able to at least double your sales at a 50% reduction just to make it even (and not even counting the increase in support costs).

The only time where I see a reduction in price is justified is when you've got competitors outpricing you. Btw freeware alternatives and the do-it-yourself scripts you mentioned in the other post are your competitors as well, so you need to take those in consideration too.
Mangler Send private email
Sunday, July 19, 2015
 
 
> but to truly see if it does sell better at a lower price.

As has been mentioned before on this forum, do you really have enough sales to have enough "data" to know? Sure, if you lower it and it starts selling ten times more than any other month, consistently, I guess then it seems likely. But what if you go from 5 sales a month to 7 for a month or two--does that really tell you anything, or could that just be noise?

Maybe first try to get intel other ways. Do you think your price is appropriate? How'd you come to that conclusion?
Racky Send private email
Sunday, July 19, 2015
 
 
So much to think about.  Thanks for all replies.  Marketing is hard!
PSB136 Send private email
Monday, July 20, 2015
 
 
I experiment with pricing. Most companies do. The advice above is all good. The tactic to raise the price and offer a discount at the same time is commonly used in consumer goods, or to do stuff like lower the number of ounces of ice cream, raise the price, place a $1 off sticker coupon on the box, and have 2 for 1 coupons, all at the same time, perhaps to confuse the consumer into not noticing the number of ounces went down, or to not care. If the company only lowered the number of ounces and kept the price the same - which is the end goal - consumers would be mad.

The ice cream scenario is not seen exactly in software often. One place it's seen is getting out of "free lifetime upgrade" fiascos: downgrade the main offering, offer the new features in the new "extra pro" version, and offer upgrade "deals" to transition to the "new pro version". Those who stay with their free lifetime upgrades find themselves in a ghetto of infrequent updates and removed features, but the promise of free lifetime upgrades is kept!

So this has little to do with your current situation, I'm only thinking of it since I bought ice cream recently. Let's tie it in. There's a million pricing scenarios. Big companies do it backed by decades of psychological experiments done on the public and carefully analyzed.

The comment that you need decent sized data sets is true though. One sale a week or month probably won't give you enough data. But you can still experiment and being used to doing so will help. Just don't take results as gospel.

One of my favorite outcomes is increasing the price and watching as sales stay the same. But even better than that, doubling the price and watching sales go down by only 15%. Meaning less customer support costs per dollar, and increased profits.
Scott Send private email
Tuesday, July 21, 2015
 
 
Do you have data on how much is the average time to buy after downloading?
It would ne necessary to know this data before trying the limited time discount.
I keep hearing that most people decide about the purchase in the first few tries and that is my experience as well. About 80% of sales happen in less than 30 minutes after download. Offering a discount for faster purchase would not make sense, I'd lose profits.
Zka Send private email
Tuesday, July 21, 2015
 
 
I have no idea how long they try before buying.  All I do know, is that every time I post an update to MajorGeeks, I usually get a rush of downloads in the next few days, and about 3 or 4 sales in that time.

Nothing big, I know.  It's really just beer money and a learning experience at the moment.  It's fun, though.  :)
PSB136 Send private email
Wednesday, July 22, 2015
 
 
Since I'm still getting hits from other sites, I decided to drop it from $19 to $9 for a while just to see what happens.  Can't hurt to try.
PSB136 Send private email
Friday, July 31, 2015
 
 

This topic is archived. No further replies will be accepted.

Other recent topics Other recent topics
 
Powered by FogBugz