I have a theory, not specific to the app store, that there is a strong correlation between customers who are extraordinarily price sensitive and pathological customers. This is based on every software vendor I've ever spoken to saying "After we increased our prices, we dealt with a lot less crazy people -- what's up with that?"
Anecdotally, when I increased prices by 20%, I noticed a marked change in the number of... customers with unique understandings of the world. For example: "I think Bingo Card Creator should print holiday cards. Except, not on my printer, on your printer. And you should mail them for me. What do you mean you don't do that, YOU THIEF, don't make me call my husband on you." (You will run into this customer eventually. A refund and apology is the quickest way to preserve your sanity.)
Specific to the App Store, I think that Apple is training their customers to become pathological customers. From the perspective of the small software developer, "The cost of this app is less than my information search cost, so I'll just buy this app to see if it does what I want rather than reading about it. Bought. It doesn't do what I want?! SUCKS! YOU FREAKING THIEVES!!!1 ONE STARZ!" is just about the worst possible reaction a customer can have to you. The App Store is training people to think of their software in that sort of disposable fashion, but that means you're entrusting your corporate reputation to a lot of people who have one-click access to LOLZ LAAAAAAAME.
I think this really touches on something that Marco had mentioned in his blog as well about the dichotomy of the app store. We all know people who have Iphones and literally refuse to buy any apps that cost money, even ones that are a dollar. Usually they are less savy users with far different expectations. Pick any app in the top 25 that is under a dollar and you'll surely see a bunch of oddly worded reviews, mostly hyper-critical and complaining about what a waste of money it is.
Raising your app price will undoubtedly weed out these users and, while sales will be lower, it will be a more quality, educated user. JMO
Yes, this is all very much true. In my experience decent users start to dominate the conversation at $5. Now that the word got out there will be more higher-priced apps and it will be harder for me to compete...
Damn! Can someone please un-post that blog post please? Argh! :-)
and further, people will only decide to buy a paid app if they know it fills a specific need. they will read reviews, check to make sure this app fills their need. free apps are downloaded before the user decides if they are useful- and thus obviously aren't.
i don't think this has "proven" that is makes any sense to keep your app at a high price. it is a correlational relationship, not causal
One critical tipping point that I've observed (as a developer) is the difference between $.99 and Free.
Early in the app store Apple decided they you could only leave feedback for apps that you actually installed. From that point on, you had to download the app to rate/review it and if it was a paid app, you had to pay for the privilege.
This seemed to filter out allot of the off-the-cuff negative comments for paid apps; maybe because it raised the "bozo threshold" or maybe because when you pay for something, you try harder to get something out of it. Either way, negative reviews for paid apps dropped for me (and seemed to across the board).
I'm experimenting with this again by making one of my paid apps free for a week, we'll see what the score looks like after that.
So far the results are surprising. I expected a large influx of critical (i.e., bad) reviews (given the large increase in downloads) but instead I received just a few but they were either positive or if not completely positive, very well-thought-out and constructive.
The next test will be to see what happens when the price goes back up (tomorrow is the last day the app will be free).
I think this is true up to a point with many things. Also, if I spend $9.99 on an app, I'm going to be looking to justify spending the dough. If it isn't doing it for me, I'll likely try to figure out why by spending more time with it -- and often times I'll figure out what I like about it.
We've had our sales revenue killed overnight by one review when we pushed out a big update a few months ago. We were doing ~$150 a day from one app, running up the Top 100 charts in Social Networking and about to break the Top 50 fold when everything went downhill as soon as that review was posted. Sales dropped to under $30 a day.
The review was written by an Apple technician who worked at an apple retail store. His review sounded very "authoritative" to the average consumer in terms of features and problems with our app. He even cited the SDK but I knew he was misinformed when many of suggestions were forbidden (integration with Calendar, re-route native SMS/phone calls through our app, etc.) Nevertheless, consumers trusted his review and that was all she wrote for that month of sales.
Long story short, we tried contacting Apple to have it removed, no response as usual. After about 3 days of google stalking, I found him on Flickr and sent a PM. I gave him free app codes for his friends, and asked that he kindly change his review so it's factual. I told him I didn't mind honest feedback, but that his post sounded like an authoritative developer and was in fact wrong. He kindly changed the review, and we exchange emails to this day. He's trying to get into development.
Sales recovered some but certainly killed our momentum (and momentum is a big deal on the appstore, the more folds you can break through generally means more stable revenue for a time). The one-way street review system is extremely frustrating... yet another major complaint I have about the store. Wayyyy to much power given to the consumer.
I completely agree with you. We have a lot of apps with >$14.99 price tag and as soon as there is a negative review the sales go down a lot.
I also agree with you with the momentum aspect. If you are gaining momentum a bad review can ruin it all for you. It happened to us on a $1.99 app in education which made it to top 25 in that category but 1 bad review and it was downhill ever since. It will be really helpful if Apple allows threaded review system in which the developer can comment on the reviewers comments and the reviewer receives an email notification to respond and change.
1. Maybe lower prices lead to lower ratings
2. Maybe lower ratings lead to lower prices
3. Maybe low quality leads to both low ratings and low prices
The article seems to say that #1 is the answer. Although I grant you that if you tell me Widget 1 costs $5 and Widget 2 costs $50, I'd assume that there's a reason for that. And maybe I'd be wrong.
It's actually a valid point which I happen to agree with, stated with a minimum number of words.
The article says that lower prices imply lower ratings, but the data presented only shows that lower prices correlate with lower ratings. One could equally well draw the conclusion that lower-priced software is of lower quality, hence the bad ratings.
Anecdotally, when I increased prices by 20%, I noticed a marked change in the number of... customers with unique understandings of the world. For example: "I think Bingo Card Creator should print holiday cards. Except, not on my printer, on your printer. And you should mail them for me. What do you mean you don't do that, YOU THIEF, don't make me call my husband on you." (You will run into this customer eventually. A refund and apology is the quickest way to preserve your sanity.)
Specific to the App Store, I think that Apple is training their customers to become pathological customers. From the perspective of the small software developer, "The cost of this app is less than my information search cost, so I'll just buy this app to see if it does what I want rather than reading about it. Bought. It doesn't do what I want?! SUCKS! YOU FREAKING THIEVES!!!1 ONE STARZ!" is just about the worst possible reaction a customer can have to you. The App Store is training people to think of their software in that sort of disposable fashion, but that means you're entrusting your corporate reputation to a lot of people who have one-click access to LOLZ LAAAAAAAME.