I did a similar thing for my iOS app[1]. It was free for months, and I started charging for it last October. I raised the price by a dollar every week, and sometimes kept the price for a bit longer than a week if I thought it might have been influenced by other factors (like new updates).
I was surprised to see that my app’s sales averaged to be about the same at every price point (some price points had more, some had less, but there was no consistent trend downward as the price rose). Thus, my revenue maximized at the highest price point I tried ($9.99) and I kept it there.
I presume that my experiment was so flawed that the results aren’t conclusive (rankings, ratings, etc. all changed throughout the experiment), but I was happy enough with the results that I went ahead and priced my app at $9.99 and have kept it there ever since.
[1] Iron Money, a personal finance organizer. I include this here because I have a feeling this might vary from category to category.
There is also a 'perception of value' effect. If something costs more, it 'must' be better. For something like a finance app that probably works in your favour, since charging too little makes you look dodgy. :D
>iCarc is geared towards a fairly niche market, so I decided that having more buyers was better than having a few at a high price.
I don't really follow this logic. My experience has been the lower you price your app the worse the reviews. If you can charge a higher price and earn the same revenue, do it. You'll build a higher perception of quality through better ratings and in the long run I think this will earn you more customers.
You have a great point here. My hope was that by getting more users, word of mouth would play a bigger part because of the more limited market.
As a follow up test, I'm going to bump the price a bit and see what kind of effect it has. It's possible that my interpretation of the price test results wasn't quite right, and I should have been thinking up instead of down.
I was surprised to see that my app’s sales averaged to be about the same at every price point (some price points had more, some had less, but there was no consistent trend downward as the price rose). Thus, my revenue maximized at the highest price point I tried ($9.99) and I kept it there.
I presume that my experiment was so flawed that the results aren’t conclusive (rankings, ratings, etc. all changed throughout the experiment), but I was happy enough with the results that I went ahead and priced my app at $9.99 and have kept it there ever since.
[1] Iron Money, a personal finance organizer. I include this here because I have a feeling this might vary from category to category.