

IPhone App Pricing Strategy - michaelbuckbee

I'm almost ready to launch my first personally developed iPhone app. It has a strong value proposition (you scan the barcode of DVDs/BluRays and it adds them to your Netflix queue).<p>I had wanted to launch with a price of $4.99 and the applesque pricing anchor of "half the price of a DVD".<p>The app actually tracks how much it would have cost to buy all of the DVDs that you scan in as well.<p>Is it better to try and release this for free (for a short period of time) with the goal of getting on the "New and Notable" listing or does it make more sense to launch with a high initial price and then lower it for special promotions?
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ykomada
From a slightly over-structured perspective, you can think of pricing strategy
in one of three ways: cost+, value to customer, or competitive benchmarking
(market). You can probably figure out the meaning of all three but in case
not:

Cost plus is simple in that you calculate how much it cost you to make
something and then charge more than that per unit, ideally with a margin you
are happy with. Not too applicable to this situation, but if you want to think
about it, take your hourly salary * # hours you spent on this for total cost.
Figure out how many downloads you can realistically get at some price and then
you go from there (hint, 99c is probably ok from this perspective).

Customer value pricing is much more of a nebulous science. Basically, you try
to figure out how much value people attach to certain product characteristics
or functionalities. In reality, you can observe customers, interview/survey
them and do other experiments. From a more basic perspective ask yourself
this: how big of a problem does my product solve and how important is that
problem? The QuickOffice app solves a huge problem for me (I can't get my
computer files or edit them on my iphone)and so I paid $9.99 for it. Angry
birds solves a smaller problem (I'm bored for a few minutes) so I only pay 99c
for it. How do you know how big of a problem you are solving? Ask yourself
what a user would do if they didn't have your product: without QuickOffice, I
would have to drive back to my house and get my laptop. With Angry Birds, I
just read the news for a few minutes instead. With your app, I could foresee
the problem being solved by manually entering the movie title.

For iPhone apps, competitive benchmarking is most important. Really, unless
your app does something extraordinary, it should be 99c or free. However, in
your case, I assume you might be doing doing this in order to learn. You will
learn more if you get more downloads, and therefore more user data/feedback.
Therefore, there may be greater value for you would be to put it out there for
free. Use the experience and insights you gain from this to build something
even better in the coming months/years.

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pjy04
I agree with your notion to release this for free but the $4.99 price point is
kinda high for just one value prop of scanning to add to my netflix queue.

Maybe you can make more money if you add a feature where you can add to cart
and buy through amazon or price comparison while getting affiliate money?

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michaelbuckbee
I believe that Amazon's API actually prohibits barcode scanning for price
comparison (their own Amazon iPhone app does this).

I had considered doing a more widely integrated application, but it got very
kludgy very fast and I've always felt that the most popular iPhone apps were
very simple.

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allenbrunson
it's sad, but the iphone ecosystem says apps should be very cheap. i'm going
to guess that there is no way you can convince people to pay five bucks for an
app that simple. my guess is the market will value it closer to two bucks.

here's what i would do. start it off at two bucks. call it an "introductory
price." if you get any takers at that price, try raising it a buck or two. but
my guess is that you won't get many, so you're next step is to drop it to free
for awhile.

i went through a lot of this for my first paid iphone app. it is in many ways
counterintuitive and ugly.

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michaelbuckbee
What drives me crazy is that simple is so hard. My original design had 3 tabs
for different settings, and functions and all of these tweaks and from user
feedback I cut it down to just a few screens.

I ended up trying to make it the most minimalist Netflix app possible as all
of the others seem to have buttons and images flying everywhere, but maybe
that's what people want.

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SHOwnsYou
I'd be interested in being able to select adding it to my instant play queue
or my regular queue.

Or even better would be setting my instant queue as the default, but if it's
not available for streaming, adding it to my regular queue.

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michaelbuckbee
What you are describing is the actual default behavior of the app. The only
configuration option is to turn off Watch Instantly altogether (for people
like my parents).

The app also pulls your DVD or Bluray preference for discs and only applies
those to your queue.

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michaelbuckbee
Link: <http://flickscanapp.com>

