If you hang around iOS developers, you’ve probably heard a lament something like:
Why will people pay $4.99 for a cup of coffee, but won’t buy spend $2.99 on my app?
This almost evokes feelings from the great depression, doesn’t it?
Learning from bad analogies
Most app makers I know consider this a bad analogy and they are correct–it is weak. Purchasing a cup of coffee and purchasing an iPhone app have very little in common, but examining why this analogy is weak teaches me something useful.
There is a cognitive burden implied by a $5 app purchase that is not implied by a $5 coffee purchase.
For habitual coffee purchasers, a cup of coffee is a known thing. The purchaser *knows* they will feel comfortable with it in their hand, that they will receive a boost of energy, and that once purchased they won’t have to think about it any more. This is the proverbial “no brainer” which leads to little or no hesitation.
When I spend any amount of money for an app, even $0.99, I think about it differently and it adds a subconscious burden that rattles around my brain3 that makes me hesitate just long enough to trigger a different thought process.
A little light went off today when I clicked on a link to Amazon for a book that sounded interesting. I am definitely the target demographic for this book, and the $7.99 price was immaterial to me so I started skimming the customer reviews. All of the “most helpful” reviews were high except for one. It was middle of the road and it’s basic claim was that the book was okay, but mediocre. That made me hesitate in clicking the “buy now” button because it changed my thinking from “this book is worth a shot” to “I don’t think I want to invest much time figuring out if which reviews are correct.” The small mental burden of thinking I would need to at least skim the book turned me off. Did I miss a great opportunity? Perhaps, but I don’t think I will ever know.
When I am in “normal user”4 mode this thought process usually applies when a paid app catches my eye:
- If I pay for this, I should at least try it enough to see if I like it,
- Wait, I don’t really care about the price, but I do have enough things to do. Do I really want to commit to X minutes to try it?
- Never mind…
There is also good research5 that demonstrates that any price, even 1 cent, triggers different thought processes. The difference between free & almost free is disproportionately large compared to price difference between two non-free choices.
My thought process for a free app that looks interesting is more like this:
- I think I’ll download this to check out later,
- I know I may lose interest or forget why I downloaded it and delete it, but who cares?
- Download it…
So, what are the implications of this and how can I take advantage of it?
If I am going to have a paid app:
- I need to focus on helping customers understand the value to lessen their hesitation,
- I need to convince users outside the app store that the commitment to try it is worth their time,
- If I can do that, then asking for money is not as big a deal as it might be,
- If it is too difficult to convince users of the likely value without a trial, I should strongly consider free + subscription or IAP instead,
- Early in their usage, I need to give purchasers solid reasons to believe purchasing was a good decision.
If I am going to have a free app:
- Since free requires no commitment, there is a much greater chance the downloader won’t try it at all, or only superficially,
- So, I have even less time to convince the user to keep using the app once they do start it.
In either case:
- I need to find strong incentives for users to try it now while they are thinking about it, rather than put off the decision.
- Building a business is a lot harder than just building an app.
Here is a little more information about me, Doug Sjoquist, and how I came to my current place in life. Hope you have a great day!
1. AppStore pricing articles
2. Current app development
I am in the early stages of developing an app that has great potential to be a sustainable business, so marketing, pricing, and customer acquisition thoughts occupy my mind constantly.
3. Stuff that rattles around in your head
I learned a lot from David Allen’s book Getting Things Done even though I don’t follow his methods successfully. Statements like “You can fool everyone else, but you can’t fool your own mind” and “Your mind is for having ideas, not holding them” remind me that even when I don’t realize it, things rattling around my head have an influence on my decisions.
4. Developer purchasing mindset
As a developer the thought process for purchasing some apps is different, I may want to see how a particular interaction is handled, or what some other part of the app looks like. So sometimes, I’ll buy 4 or 5 apps in a niche just to compare some feature.
5. Pricing research
I just finished reading Priceless: The Myth of Fair Value (and How to Take Advantage of It) and it had a lot of very interesting stories and potentially valuable insights in regards to pricing. In particular, he talked about the Hershey’s Kisses experiment performed by Dan Arierly