Tags: app store,
Last month I mentioned my experiment with the pricing for Labor Mate to see what effects, if any, a price increase will have. The initial results were interesting. The number of units sold went down, but revenue had gone up. On the surface it seems the price increase was a success, but I needed more data.
I increased the price of Labor Mate by $1 on May 15, going from $0.99 to $1.99. By increasing the price on May 15, I was able to compare the first half of the month with the second half. And as I mentioned in the previous post revenue had indeed gone up. But I was curious to see if this would continue and what might be the long term effects, so I left Labor Mate at $1.99. After all, I made more money in May as a result of the price increase.
June is over and the sales numbers are in. I’m now able to compare a full month of sales (for June) at the higher $1.99 price to a full month of sales (for April) at the lower $0.99 price. And I can compare these numbers to May’s numbers. The results might be surprising to some, but are inline with what I secretly thought would happen.
In June, Labor Mate earned a whooping $31.94 more money than in April, and it earned $30.90 less compared to May. In April, Labor Mate averaged $35 per day. The average was $37 per day in May, and only $36 per day in June.
Revenue from Labor Mate has been on a slow but steady increase since it was first released back in 2008. Though I cannot prove it, based on past trends, my gut tells me Labor Mate would have likely hit June’s revenue number in May without the price increase. And my gut, again based on the trend, says June would have probably hit May’s number without the price increase. In other words, while the price increase did improve Labor Mate’s revenue, the amount of additional revenue resulting from the price increase is actually no different from the slow and steady increase in revenue I was already seeing at the lower, 99 cent price point. As a matter of fact, I saw a bigger jump in revenue between March and April, with April bringing in a whooping $175.71 more than March.
I’m now convinced the price increase did little to improve revenue, and actually the price increase likely did more harm than good. Prior to the price increase Labor Mate was ranked in the Top 100 in the Health and Fitness category for a number of different countries including the U.S. Today Labor Mate is no were near ranking in the Top 100 in most stores.
Another negative effect caused by the price increase is that fewer people are now using Labor Mate. As I noted in the previous post, the number of daily downloads dropped. This means fewer people are buying Labor Mate, which in turns means fewer people are using it. I believe Labor Mate’s slow but steady raise was due in part to word of mouth advertising. Now that there are fewer new moms and dads buying and using Labor Mate, there are fewer people recommending Labor Mate to other new moms and dads. And I admit, ignoring price for a moment, I’m a little disappointed that fewer people are using the app. A part of me prefers selling at a lower price point so more mom and pops to be will use it. (Hmm, maybe I should release a free, iAd supported version.)
So what’s next? I’ve thought about dropping the price back down to 99 cents, but this could lead to a backlash from the folks who purchased Labor Mate over the last 6 weeks. Plus, $1.99 is still cheaper than a large cup of Starbucks coffee. The better idea, and the one I have been planning all along, is to continue improving Labor Mate and make it stand out above the other 99 cent copy cats. This includes leaving the price at $1.99 for now. After all, as one recent new user said to me in email, “it is a very practical and intuitive app and certainly justified at $1.99.”