May 22, 2017
The most successful pricing strategy for certain brands could seem counter-intuitive. When we switched business models at Montessorium for our geography app, everything changed. By offering in-app purchases, we were navigating entirely new terrain in the hopes of reaching a wider audience. Because this premium mobile app was priced as free to download, we projected it to take off like a rocket. Instead, downloads actually went down in comparison with our other app launches. How does that happen? For some mobile app industry insiders, this may seem readily obvious.
“Of course your apps took a hit,” said a close friend. “You’re a premium lifestyle brand. The assumption, whether you like it or not, is that with a higher price point there’s great quality and value. Parents are willing to pay more for that experience. They’re actually relying on it.”
For others, it seemed counterintuitive.
“Wait, what? You lowered the price point, making the app free to try, and you didn’t receive as many downloads as your paid apps?”
While we can’t be 100 percent sure of the reason behind the lack of downloads, we have three key observations about how we would do things differently next time.
We Weren’t Transparent
In trying to be respectful of the user experience, we buried the in-app purchases too deep. It’s better to be more upfront with the purchase for the sake of transparency. Users will then understand what they’re paying for, and when they will pay for it.
We Didn’t Think About Our Users
We failed to consider how difficult it would be for schools to utilize the in-app purchase model, which in turn means we failed to consider who our customers could be. When deciding on fully paid versus in-app purchases, we learned it’s important to think through exactly how users will be purchasing your app (volume purchase program, private devices, etc.).
We Didn’t Price Accordingly
We underestimated our users’ (parents and schools) willingness to pay for great content. There’s an expectation that beautiful, well-crafted products will cost money, and that a free product might not be as great. Because all of our previous apps are at a premium price point, it might have seemed suspicious to users that a comprehensive world geography mobile app was free. The lesson we learned: if you believe in the quality of your product, don’t be afraid to price it accordingly for fear of alienating potential customers. Mostly likely, you won’t.
Our goal at Montessorium has always been to help children learn, and that’s what we set out to do with our latest geography app. By trying out the in-app purchase model, we thought we would reach more families and allow them to test the app with their children before buying it.
What really happened is that we confused users with buried purchased points, made it impossible for some institutions to even buy it, and undervalued the worth of our product. We learned some valuable lessons during the process and are looking forward to implementing them in the future. Hopefully, you’ll find them helpful as well.
Read more about mobile trends here on Tech.Co
This article is courtesy of BusinessCollective, featuring thought leadership content by ambitious young entrepreneurs, executives & small business owners.
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