Increasing product price = more sales

O

o hai guyz

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Jan 15, 2010
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I decided to increase the price of a couple of my Android apps a few days ago, one of them from .99 to 4.99 and the other from .99 to 3.99. The 4.99 one still got the same number of sales per day as when it was .99, and the sales per day of the 3.99 one doubled since increasing the price. I also usually get about 15% chargebacks but the chargeback rate at the increased prices so far is only 2%. $4-5 is pretty expensive by app standards (both of these are just dinky little apps, not complex games or tools or anything).

It seems like people who want something will buy it regardless of the price, and that increasing the price can sometimes cause people to assume it's a better product and buy it as well as perceive it as being a better product even after trying it out.

Thought this was interesting so if anyone here is into app development you might want to try screwing around with your prices to see what happens (obv you could do this for any product, not just apps, and the same concepts could apply).
 


yeah, I've seen it happen with membership sites a few times.
Sales would remain steady or increase, perceived value was often mentioned as the reason why - surfers would see the low price and assume the site was garbage. I know I've caught myself a few times doing this too
 
Funny that you posted this thread just as I was considering raising prices on one of my underperforming products from 120€ to 150€.

Done, just for lulz.
 
o hai guyz said:
I decided to increase the price of a couple of my Android apps a few days ago, one of them from .99 to 4.99 and the other from .99 to 3.99. The 4.99 one still got the same number of sales per day as when it was .99, and the sales per day of the 3.99 one doubled since increasing the price. I also usually get about 15% chargebacks but the chargeback rate at the increased prices so far is only 2%. $4-5 is pretty expensive by app standards (both of these are just dinky little apps, not complex games or tools or anything).

It seems like people who want something will buy it regardless of the price, and that increasing the price can sometimes cause people to assume it's a better product and buy it as well as perceive it as being a better product even after trying it out.

Thought this was interesting so if anyone here is into app development you might want to try screwing around with your prices to see what happens (obv you could do this for any product, not just apps, and the same concepts could apply).
Click to expand...

How big is your sample size?

There may be some underlying factors at work here. Maybe the android market displays higher priced apps first?
 
Falian said:
How big is your sample size?

There may be some underlying factors at work here. Maybe the android market displays higher priced apps first?
Click to expand...

The 4.99 app - about 20 downloads a day before price change and 20 downloads a day after price change.

The 3.99 app - about 25 downloads a day before price change and 45 downloads a day after price change.

It was online for about 3 months before the price change, which I did about 4 days ago. I think it's a large enough sample to get a good idea of what's going on.

As far as the market displaying higher priced apps first, I ran a search for a couple of my main keywords and the free apps actually showed first. I had to scroll down a bunch of times just to get to mine.
 
My mentor says that the worst thing you can do to an underperforming product is reduce the price. That is unless you give something of value to those who have already purchased it. If you drop the price, then those who already bought will feel ripped and never buy again, but if you bump the price they will feel they got a good deal and be more apt to buy from you again.
 
Charliebee said:
My mentor says that the worst thing you can do to an underperforming product is reduce the price. That is unless you give something of value to those who have already purchased it. If you drop the price, then those who already bought will feel ripped and never buy again, but if you bump the price they will feel they got a good deal and be more apt to buy from you again.
Click to expand...

That might be true for products sold by large brands or stores but in the case of mobile apps and most affiliate products, customers don't know or care who created them so company image doesn't really come into play, in my opinion.
 
Wow, I was expecting to come in here and display some of my microeconomics knowledge to answer whether or not you should raise your prices.

Turns out you did, and the # of sale increased, awesome.

I can think of two likely scenarios that fit nicely with your lower chargeback data.
1. By raising the price, you have put yourself in a different market. Your buyer demographics or whatever have changed. Maybe there are "People who buy almost-free apps" and "People who buy pricey apps", and maybe your product is better suited to the latter.

2. As mentioned before: perceived value. By charging more, you could actually be enhancing the utility of the product. But the effect could go beyond "perceived" value. Maybe if people PAY more, they are motivated to USE more after the purchase. Chargebacks could be down because they feel like they received something more useful because of the price, or they DID receive something more useful, because they FELT like they should as a result of the price they paid.

God, I hope that made sense.
 
Congrats on your tactic.

Are we 100% sure that a price change didnt like 'rebump / update' your app to the top of a list that users see ?

Im not sure how the android app market works.

Also those who are wealthy and impulsive shoppers dont care about .99 or 4.99 bc money isnt an issue to them, they just want it.
 
What section does it fall in? Is your app useful, or a wallpapers/ringtones type app or is it more an entertainment app (live wallpaper, etc)?

Congratulations on the sales
 
(O_o) said:
Congrats on your tactic.

Are we 100% sure that a price change didnt like 'rebump / update' your app to the top of a list that users see ?

Im not sure how the android app market works.

Also those who are wealthy and impulsive shoppers dont care about .99 or 4.99 bc money isnt an issue to them, they just want it.
Click to expand...

I don't think it bumps you anywhere. If you get a lot of downloads really fast you appear on the "featured" list, but that would be more aligned with dropping the price, not raising it.

@CitizenSmif one of them is ringtones and it's just a simple bullshit app, the other is in Lifestyle and it's pretty useful. The value in the app itself is worth a lot more than $4, but since people are accustomed to $1-2 apps it's usually hard to pass something like that off.
 
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