iPhone App Marketing Case Studies – #3

by Brook Lenox on May 31, 2010

My third case study today is on pricing. In the picture to the left, yet another an app developer prays for the money to role in!

He needs the right price for his app.

So…how do you decide your initial price?
And when and how should you lower the price of your app?

Initial Pricing

Here are two articles you might glance at to give you some good food for thought:

How to Price Your iPhone App
Price and Popularity

Here are some things to consider when deciding on price:

  • Most iPhone apps are priced $.99
  • Almost all highest grossing app are not $.99
  • Aim high when price is concerned – you can always lower your price
  • Look at the competition and compare features before pricing
  • Consider having a free version and paid version, versus a $.99 version
  • Do the math…how many sales needed at $1.99 compared to $.99?
  • If you don’t have a great app and don’t get it in front of lots of people, the price won’t matter

Lowering the Price – When & How

Lowering your price can be an effective way to drive volume.

The “when” is when you’ve had enough time at the current price to see if you’re hitting the sales you were anticipating. Don’t over react and drop the price day one, but don’t leave your app at $2.99 for months, getting one sale a day.

The how is all about execution.

Say your app is $2.99. When and if you drop it to $.99 you should certainly see a lift. Users are getting a deal!

But that’s only one side of the equation. You need to have to get your promotion in front of people.

I suggest you consider a site like FreeAppADay when lowering your price. Make your app free for at least a day (they suggest 4-7 days) and pay them to expose it to their tens of thousands of visitors who are bargain hunting.

Why? I won’t make any money when it’s free?!?!

Here’s why the combo of free and FreeAppADay helps:

  • Many of their promoted apps have landed in the top 100 free
  • Because of this you get tens of thousands, sometimes over a million new users
  • These new users can be very valuable (for ad revenue, launching others apps, etc)
  • When you switch the app back to paid, you typically rank higher than you did
  • Ideally 2-3 weeks after, you’ve got more revenue AND a user base for the future

Here is a case study on how FreeAppADay helped MouthOff. 

It’s pretty simple:

  • Before promotion MouthOff was making $40/day
  • They got over 175k downloads when free
  • After they went back to paid, they made 8-9x revenue more than before free
  • Plus the got picked as a iTunes staff pick after (could/could not be connected)

Quote on PocketGamer from Joe Bayern (CEO of FreeAppADay):

“The current model works. Around 80 percent of our developer partners are able to generate substantially more income following their FreeAppADay campaigns, but it’s no miracle. Quality is the key ingredient in this process.”

Hope that gives you some food for thought about pricing your apps!

Have you seen any other good information on app pricing? Add them in the comments.

Other Case Studies

Case study #1 – iPhone App Strategy
Case study #2 – Making Great Apps

Photo credit: kerryvaughan

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