Your App is Cheaper than a Cup of Coffee?
App developers are short changing themselves by anchoring low, but we can fix that.
If I can afford to spend $3 every freaking day to buy a cup of coffee — something that I use once and it’s gone — can I not afford $2.99 for an iPhone application? Of course I can. Or so the logic goes…
When you talk to me about a cup of coffee, my brain automatically and easily pulls up a bunch of connections. A cup of coffee costs a couple of dollars. It lasts for a good little while during which I enjoy the aroma and the delicious flavor. My mood improves and I feel alert and energized for some time afterward. Those all seem like pretty nice things, especially if they were associated with your app. No? No.
I’d be a fool not to load my $600 iPhone with equally valuable and beautiful apps.
Coffee is cheap and effective. Your app is just cheap. I have no idea if it’s effective. Or enjoyable. Will it make me feel good, like any crappy coffee can? Or will I regret wasting my $ on your app? I did not wake up thinking “shit man, I need that app.” But that’s exactly how I felt about coffee, so I went out and bought some. Unlike coffee, my loss aversion subsystem kicks in when I consider purchasing your app.
There are two Apple-sanctioned ways for you to get into my wallet directly through the App Store. One, quickly growing in popularity, In App Purchases (IAP). The other, a classic, Up Front Pricing. Coffee can teach us lessons about both.
In App Purchases
Candy Crush is an excellent example of effective IAP for one main reason: Candy Crush is coffee. The same could be said for Words with Friends, FarmVille, Letterpress and more. Folks get their first taste for free. They know the product works, they start craving the endorphins, and now they’re addicted. They want more and they’re willing to pay $.99. Not a big deal for another delicious hit.
If your app can be delivered like coffee, please do so. It’s not a gimmick. It’s a nice way for you to build trust and earn my dollar. Some apps don’t fit that mold; please don’t force it.
Up Front Pricing
You’ve built something that is well worth a few bucks. I’ve bought an iPhone, yet I won’t spend $2.99 on your app? Bullshit, I’ve got $2.99. But my loss aversion subsystem has kicked in and I’m taking time to evaluate the price of your app so I don’t feel the sting of buyers remorse. Worse yet, your marketing says something like “for the price of your daily coffee yadda yadda yadda.” You’ve just anchored my thinking at $3, making it more difficult to justify the price of your app. I love coffee at $3, why would I spend the same on something I don’t even know? Can you set a different anchor so it’s easier for me to just buy your app?
Maybe you can remind me that the iPhone 5s costs over $600. That might set a good anchor. It’s a beautiful piece of engineering and it’s worth every penny. I love my iPhone. I don’t want to fill it with cheap crap. If it costs $600, I’d be a fool not to spend $2.99 on the best apps available, with beautiful design, elegance, and without ugly ads.
I’m not sure what would work as the best anchor. But I would love to see some trials in the real world and hear about the results.
There are other business models, of course. Some are more annoying or ugly than others. But for small startups and lone developers, revenue direct from the App Store is convenient and simple.
If you’re making something people want, you can figure out a way to turn it into cash (or BitCoin). Whatever you do, don’t start by anchoring with the price of coffee. As logical as it may seem, it does you more harm than good.
