Charge More!
If your product solves real problems of people, increase the price!
In 2009 my app WorkTimes cost $1.49. In 2012 MinuteTaker cost $5.99.
Over the years I constantly increased prices until I reached a price point of $5.99 (WorkTimes) and $14.99 (MinuteTaker). Each time both revenues grew. 📈
Last year I switched MinuteTaker to subscriptions at a price of $49.99 per year. That's 233% more expensive ... every year. Revenue is now up by 27%! 🙃
This year, in May, I switched WorkTimes to subscriptions at $14.99 per year. That's 150% more. Revenue grew even more and is up by 476%. 🤯
Pricing is hard...
... and there is a tipping point!
So:
📐Triangulate your price until you find that point.
💬 Avoid asking customers how much they would pay. Unless they have to pay, you won't get a real answer.
📊 Make sure you have strong analytics that back your decisions. Avoid guessing.
Thanks Florian, this is inspiring!
How did you handle existing customers - grandfather, or did they all have to swallow the pill? If so, how many of them (%) did you lose?
We did our first price increase in June and are thinking of doing it again soon.
Hi Tobbi,
I'm quite happy with my subscription pricing so far, so I didn't increase or reduce subscription pricing so far.
What I'm currently working on is conversion (downloads vs. trials vs. subscriptions) by focusing on the onboarding experience ... but that's another story.
Existing customers are in my case customers, who bought the apps before I switched to subscription - so they payed upfront. Apple has clear rules when switching from pay upfront to subscriptions: You are not allowed to force existing customers to subscriptions for existing features - only for new features.
In case of a future price increase, I'm not quite sure at the moment if I'd keep current subscribers on the old price or not.
Doing a price increase after 6 months seems to be rough but it might be worth. Are you currently planning to increase for existing customers as well?
Over the years, I observed that even smaller apps and SaaS are getting more and more expensive. Not only from inflation, but also because I think users are simply willing to pay more money.
Can you confirm, that users are willing to pay more money? What analytics would you recommend to track around pricing? signups, trial to won, churn? Or something more specific?
You are right. Software is getting more expensive. That might be, because the vendors do that analytics and try out new pricings more often than in the past.
I think, it's mainly enabled by the dominant use of subscriptions. Existing customers usually have the problem of the buy-in. Changing the tool is usually hard and even more expensive than paying the increased price.
In addition: Previous triangulations of pricing where much harder to trace back to the root because of weaker measurements. With pay upfront software you don't have less metrics to identify the users movements.
For my iOS apps I use the usual suspects you've mentioned: Downloads, New Trials, Conversions, Renew, Churn, ... - I think those are the standard metrics and are good tools to find the correct price point.
In the Apple (iOS) ecosystem, those metrics are automatically provided by Apple. So as an iOS developer, you just have to use them.
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