I think that's slightly naive. The schoolbook graphs of price elasticity show that there's a single maximum, that can be reached simply by walking the curve. It tends not to work that way.
You also have to consider how people react on prices (if you sell the product for $30 in the first 6 months, then start selling it for $60, the first users won't get upset. If you do it the other way around, the loyal beta users who upgraded will feel ripped off).
People also don't tell the truth in surveys. They believe they will buy it at a specific price point, but in reality they don't. In survey mode people may think about what other software products cost, and think what they consider reasonable. When people have to actually make a purchase people have to pick between going to the movies or buying a software license. Wildly different results are to be expected.
I wonder what other people's experiences with surveys are, and how people go about picking a price. It's certainly a fascinating subject.
gizmo, you and the other guys (and girls) on here are all over the exact studies and discussions we had internally with respect to this product - i appreciate the discussion. Pricing and positioning this and future aspects of our business model has been my focus for the past 8 months.
The value of Xobni is built on two pillars: search and relationship management. This offering builds on that first pillar. Future offerings will build on the other pillar. We actually priced this offering below what we think was the optimal ARPU (average revenue per user). We did that for 3 reasons (1) we want a huge % of users on this paid product - upselling to future offerings will be one-click easy (2) we believe paying users are more evangelical (humans justify decisions they've already made) (3) as a business in our stage we believe it is less risky to monetize a larger user group at a lower ARPU than very few users at a higher ARPU
We are optimizing for the 2-5 year revenue scenario (not 6 month scenario) - in the not too distant future Xobni will be launching an enterprise offering, a blackberry application, and other premium offerings. I've been waiting a long time for this stage of building the business.
You also have to consider how people react on prices (if you sell the product for $30 in the first 6 months, then start selling it for $60, the first users won't get upset. If you do it the other way around, the loyal beta users who upgraded will feel ripped off).
People also don't tell the truth in surveys. They believe they will buy it at a specific price point, but in reality they don't. In survey mode people may think about what other software products cost, and think what they consider reasonable. When people have to actually make a purchase people have to pick between going to the movies or buying a software license. Wildly different results are to be expected.
I wonder what other people's experiences with surveys are, and how people go about picking a price. It's certainly a fascinating subject.