The App Pricing Rollercoaster

In this chapter we will take a look at the various tactics that can be used when adjusting your app price. Pricing adjustments can make a difference in how many copies of your app are sold. However, many times these pricing adjustments are temporary and lose their impact after a few days. So, you will want to adjust prices carefully and monitor the impact to your sales before making a permanent price adjustment.

The average price of an Android app at the time of this writing is $3.13. The average price of a game app is between $1.30 and $2.60. The question that many developers often have once they've posted their app to the Android Market is when should they adjust their pricing? How long should you wait before making a price adjustment? What if the pricing adjustment has no impact on sales? Then what?

As I have said in other chapters, your pricing should depend on what type of app you are selling. Even if you are selling a game app, you need to price it more or less in line with the prices for other games in that particular category. Table 15.1 shows the range of Android app prices for April 2010 as reported by Distomo. The highest ranked game apps are between $2.11 and $2.99 on the Android Market, as shown in Table 15.2, also provided by Distomo.

Table 15.1 Android App Prices Vary Widely Depending on the App Type, as Reported by Distomo Analytics

Rank

Application

Publisher

Category

Price

1

Beautiful Widgets

LevelUp Studio

News & Weather

$2.04

2

MyBackup Pro

rerware.com

Tools

$4.99

3

ServiceTIME

TPC Solutions, LLC

Productivity

$1.49

4

Weather & Toggle Widget

Android Apps

News & Weather

$1.99

5

NewsRob Pro

Mariano Kamp

News & Weather

$6.83

6

Advanced Task Manager

Arron La

Tools

$0.99

7

Mobile Package Tracker

Minstech

Tools

$1.99

8

WeatherBug Elite

WeatherBug Mobile

News & Weather

$1.99

9

NewsRoom - RSS News

Trileet Inc.

News & Weather

$4.99

10

Touiteur Premium

LevelUp Studio

Social

$2.72

10 Abduction! World Attack Psym Mobile_Casual_$2.11

Once you have selected a price for your app, you should maintain that price for the first few months of sales to get a clear picture of how things are going. Avoid the app pricing rollercoaster where you are constantly raising and lowering the price of your app in an attempt to find the best price. The constant shifting of price does not give you enough time to see how a particular price point is working out. You will not be able to gather any concrete data unless you wait a few weeks to see how a pricing adjustment impacts sales.

This does not mean you can't do a promotion or two to experiment with temporary price drops, but you should plan to keep prices steady for a while to see how sales go and to get a read on the market.

Just like when selling almost any software product, it's very difficult to raise prices for an Android app. This is because the buyer becomes used to a certain price, and discovering what others have paid for the same or similar product is fairly easy to do in this connected Internet world. So, even if you add features to your app, you will be hard pressed to raise the price of your current app even if you are completely justified in doing so. Your existing customers will expect you to add more features as you create new versions, while your current customers will get your upgrades at no additional charge anyway.

Some will argue that new customers won't know if you raise your app's price, but this is not true. People who write reviews of your apps and those that follow your app—including your competition—will know that the price has been raised and will comment on that in reviews or blogs.

One way to approach a price increase that can work to your advantage is to create a separate new app altogether with a higher price point. It's really the same app you already have for sale, but it has additional features. You can call this version of the app "Pro" (for Professional). If you don't already have a free app, you can take your current app and make it the free app. You can call this version of the app "Lite." Then, you can introduce the new higher-priced app to the market. The new price cannot be dramatically higher than the previous price of the old app, however— perhaps a dollar or two more. There is almost no other circumstance where you can easily raise the price of your app without negatively impacting sales.

Lowering your app price is easier than raising it. When you first launch your app on the Android Market, you need to give it some time to determine whether or not the

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