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Comment by matwood | Hacker News Reader

I used to sell a small iOS app. For me, my biggest fear was not delivering value for the $2.99 someone paid me. It's dumb when I think about it logically because it's only $2.99, but I wanted anyone who paid to also be happy with their purchase. I will say though that people giving you money directly for something you built is a rush.

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Among apps, $2.99 is quite high. The average price per app in the store is roughly $1.40, and the average selling price is likely less than 50 cents (I'm unsure, because reporting is only available for average overall price, not average sale price. However, logic dictates that, given that free apps are purchased with many times greater frequency than paid apps, the average sale price would be significantly lower than that average price.). Moreover, the median is free (due to the fact that ~90% of all apps are free.) So, because the price is inordinately high, there is undoubtedly a higher standard and more pressure to deliver value commensurate with the inflated price.

Great obserations.

Let us talk out of our asses here, just for a moment. People like to call these "thought experiments":

There are two mindsets at play that I can see. Lets call them the "analytical" and the "immediate"...

[Aside: If I use my own terms like this, then I can write that book later and have my movement-terminology ready-to-go ] :)

The "analytical" mindset is willing to spend thought-cycles worrying about the fact that an app is expensive at $2.99, since the price is anchored against a million other <$1.40 apps. The level of cognitive dissonance on display here is uncanny, but apparently price-anchoring is a low-level OS service of the human brain that is difficult to kill via the Task Manager (consciousness).

The "immediate" mindset is completely free of the cares of price anchoring. This usually happens when you're playing with other people's money, or when you simply don't have a choice.

If you build for the "immediate" mindset, you win.

Of course, this is just a thought experiment and completely indefensible. However, I am willing to make a bet that contains elements that are correct.

When I had a paid app in the app store price didn't seem matter too much.

I had a free version of the app with IAP and a paid version. Both initially cost $0.99 but after 6 months I raised the price to $1.99. Sales actually went up. I think if you have an app people like and you have good reviews, price isn't as important.

Graph for paid app https://www.dropbox.com/s/s7zvicfuan9ci5n/paid.png?m

Graph for IAP https://www.dropbox.com/s/3ddr15si5qp5bux/iap.png?m

Funny thing, your reviews also go up when you raise the price. I have 2 theories to explain this: - People who pay for something are more likely to research it before, and thus will only get the product if they think it fits their needs. On the other hand, if the app is free and it doesn't do what you thought it did, you might give it a bad review. - People who pay for things tell themselves that they're buying more quality, and so they truly see things differently.

This was a few years ago so things may have changed, but I played with pricing a lot. Eventually I found that sales were lower at .99 than $2.99. Above $2.99 they quickly fell off again. I assumed that a slightly higher price up to a point caused people to assign a higher perceived value.

As for a higher standard, I want to deliver value regardless of price. At the end of the day people are giving me something way more valuable than a couple dollars - their time.

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