

If you wouldn't pay for my app, your pricing advice is worthless - mootothemax
http://tbbuck.com/if-youre-not-giving-me-money-your-pricing-advice-is-worthless/

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kenjackson
If everyone you talk to says, "I wouldn’t use this service if you paid me in
gold-plated puppies" then you really should consider that your service may
have a problem.

~~~
epo
The full quote was “I wouldn’t use this service if you paid me in gold-plated
puppies… but I think you should be charging $X”. The "... but" part is why
their opinion is worthless. And if you base your advice on selective quotation
you should really consider whether your advice is worth anything.

~~~
bugsy
I agree completely. It was very clear to me when reading the original that the
context is that the person simply has no interest in buying the product no
matter what for his own reasons. The selective quoting completely changes the
vibe to read that the person deeply despises the product, not that he has no
use for it. The use of selective quoting here is dishonest and highly
misleading, by intention.

~~~
kenjackson
All quoting is selective by definition. I didn't add the end part because
frankly its irrelevant. This person is trying figure out pricing. But you need
to figure out if this is a product people want at all first. If people are
telling you that you couldn't pay them to use it... that IS the big takeaway.
You're right to ignore the "but ..." part of the sentence, but not because
their pricing information is not valuable -- but rather because they told you
the important part in the first half of the sentence.

The fact that the author and you miss this is probably indicative of why we
see so much crap software produced with no real audience or use scenario.

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wccrawford
I'm surprised this had to be said. Basic economics will tell you that the only
way to determine price is what people will pay... Not what they say they'll
pay, or what they say others will pay, or what they say people should pay.
Only what they will pay.

And everyone's price point is different, of course... Some would never buy,
others would spend far more than most people. It's all about finding that
sweet spot.

~~~
arkitaip
The meta insight seems to be that you should never trust what customers say,
only what they do. Other areas where this applies is user testing ("No, I
don't think it's that difficult to use.") and marketing ("This ad looks way
better than that.").

~~~
reinhardt
_The meta insight seems to be that you should never trust what customers say,
only what they do. Other areas where this applies is user testing ("No, I
don't think it's that difficult to use.") and marketing ("This ad looks way
better than that.")._

One more area: (most) female dating advice. "I want a sweet nice guy" vs "all
my ex-es were jerks". Guess who she's attracted to.

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SoftwareMaven
The much more difficult thing is separating those who wouldn't use your app
for functionality reasons (dude, it's a guitar...I'm a drummer.) versus those
who wouldn't use your app for pricing (dude, I can't afford your sticks.)

You will only gain noise from the former, but you may find something out from
the latter. You may still want to choose to ignore it (Apple has received no
end of "it's too expensive" feedback), but the knowledge will still help you
understand who your buyers are and how to best market to them.

FWIW, this is product managmpement 201. Pricing doesn't happen in the first
year. :)

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chopsueyar
I've recommended this Harvard Business Review article before, but I believe it
is still relevant.

 _How Do You Know When the Price Is Right?_

by Robert. J. Dolan

Published Sep 01, 1995

[http://www.amazon.com/gp/product/B00005RZ5D/ref=as_li_ss_tl?...](http://www.amazon.com/gp/product/B00005RZ5D/ref=as_li_ss_tl?ie=UTF8&tag=littdidd-20&linkCode=as2&camp=217153&creative=399701&creativeASIN=B00005RZ5D)

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davedx
A/B testing your pricing? Do people really do that?

I wouldn't like to be on the receiving end when your customers find out about
that one.

~~~
absconditus
Amazon has done it.

~~~
gregory80
I've heard about their UX A/B testing around showing cart flow and checkout,
but actual pricing? Can you link to research?

~~~
absconditus
<http://www.wired.com/techbiz/media/news/2000/09/38622>

Searching for Amazon different prices with Google provides many claims of this
over the years.

~~~
gregory80
this appears to be far more anecdotal evidence than research. I was thinking a
published study, not simply consumers noticing price differences on checkout,
haphazard sampling to say the very least..

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euroclydon
I've sold CWC [1] for, $12.95, $19.95, $24.95, and $29.95, multiple times at
each price point, over the past few months.

It's nice to find a way to segment the market and take advantage of price
elasticity of demand.

[1] See profile.

~~~
mootothemax
I love your product, it's cool! :) Mentioning segmenting, I've often wondered
about taking exactly the same product, marketing it on a fresh website and
raising or lowering the price depending on who the market is. Although I've
also been partly worried that that's a good way to end up with a massive
consumer backlash ;)

~~~
euroclydon
There are all kinds of ways to add/remove bells and whistles in order to have
a pricing page with several tiers, yet very little change to the underlying
code-base or product. You can charge more for support, exclusive access to
additional content/material, number of time the user can do something per
month.

It's been said many times on here, there are always people who want to pay
more -- ignore them at your own peril.

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physcab
This is exactly the type of problem I have been encountering with my app
FitLabs (www.fitlabs.co). Its an app catered to people who do Crossfit and are
used to paying $150/month in gym fees. So I thought, "hmm if people are
already paying that much, they wouldn't have a problem paying a premium for a
tool that lets them get more out of their workouts". Wrong. I built the tool,
and people balked at the price. They said I should lower it to $10/month, but
even when I did that they still didn't sign up.

~~~
byoung2
_if people are already paying that much, they wouldn't have a problem paying a
premium for a tool that lets them get more out of their workouts_

You have to remember to explain how they gain from using your product in
monetary terms. In exchange for $150/month in gym fees, I get to use their
equipment, showers, electricity, trainers, cleaning crew, etc. When I use your
app, what do I get? Maybe your app saves me 30 minutes three times a week vs
using a diary. At my hourly rate, $30 is a bargain.

When I was doing freelance web design, you wouldn't believe how many
businesses were spending $400/mo on paper YellowPages ads, but couldn't see
the value in spending $500 + $50/mo for a website. When I explained that they
could use just half of that monthly spend on SEO and PPC ads, and have better
conversion tracking, they saw the appeal. When I explained that an online
scheduler could save them $1600/mo over having a full time receptionist, they
really saw the appeal. You have to frame it in terms of cost savings/increased
profit/saved time, etc.

~~~
physcab
This is excellent insight. As a developer, my gut reaction is to say _but look
at all these features_ and people will pay for that. But thats not really the
case. In fact, it seems what people actually pay for is an efficient solution
to something that takes them far too much time (or makes/saves them money).

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bugsy
I agree with the article. We occasionally get comments about how our software
is too expensive. The only thing that matters though is we do periodic pricing
experiments and we know for a fact we don't make more money by lowering the
price or by raising it.

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mise
What I've found difficult with pricing split tests, which you discuss at the
end of the article, is that it takes loooots of time to statistically prove
anything (if a paying conversion comes along every two days, for example).

~~~
mootothemax
Yup, I think at the start you have to go with gut feeling until you can get
reliable stats. As ever with SaaS - it's all about getting enough traffic
until you can shape it how you want :)

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dasil003
Well, unless that person happens to be an entrepreneur with a track record of
successfully pricing products much like yours.

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chopsueyar
This headline made me laugh.

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wnight
Unless your app is trivial it won't appeal to only one type of person so
you're going to have to model multiple types anyways.

For instance, the inbox cleaning utility mentioned - it could be used by busy
CEOs whose time is money, and by computer-illiterate people like the
stereotypical grandparents who need frequent access to the same tool despite
having ample time to shop around on price. You need to advertise to both group
independently or you won't get either.

So model the people who don't like your software too, and their desired
payment options, as more data points from which to understand your actual best
market.

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thoradam
"charge too little, and people won’t use your service"

What?

~~~
joshuacc
Just to throw out an extreme example, I definitely wouldn't hire a wedding
photographer who charges $100 for a day's worth of photography. If they have
to charge that little, they probably aren't very good. And given the
importance of the occasion, I want to be _sure_ that the photos are excellent.

