App Store experiment: 99 cents prices don't work for niche apps
App Cubby's David Barnard has weighed in on the results of his App Store pricing experiment:
With App Store shoppers seemingly hesitant to risk $5+ on a new app, I decided to do a pricing experiment. For a limited time, App Store shoppers were able to purchase any App Cubby app for $0.99. I asked that if they felt the app was worth more than the $0.99 they paid, they make a donation to fund future development.
Here are the results:
Sales and revenue after prices were dropped to 99 cents on 21 January.
During the 7 days of the experiment, we received $75 in donations, and sales volume shot up enough to make the 7 day experiment essentially revenue neutral compared to the prior 7 days. During the first few days of the sale I was starting to think the $0.99 price point might actually be sustainable given the increase in volume. The thing is, our apps got a TON of press from news about the "experiment." As the press attention waned, volume began to slide. It quickly became apparent that the $0.99 price point wasn't going to work long term. There was a bit of a bump at the end, but that’s typical of anything that goes on sale; people rush to buy it just before the sale ends.
As a result of the experiment Barnard has raised the prices of Health Cubby and Trip Cubby to $10 (my favorite, Gas Cubby remains at $5) and created lite versions of each app so that users can try before they buy. Barnard also notes that "substantial" updates are coming to each app in the next 60 days which include online backup and sync.
Tip: App Cubby blog