#145: Real World Price Dynamics with Lauren Smith.

With all the recent discussion about App Store pricing and the sustainability of making a living from the Store I thought it might be constructive to bring actual customers into the conversation. While talking with my wife, Lauren, about what was going on our resulting discussion got interesting. I recorded it and thought I’d post it here. She sits at an interesting intersection between a typical App Store customer and someone who knows the business realities of running an indie app company.

Please excuse my audio quality. I only have a single proper microphone, so I had her record with that while I used a USB headset.

• We start off talking about some implications of Realmac’s decision to backpedal on the pricing structure for Clear. How the decision to offer a paid, separate upgrade creates a situation where customers are apt to seek out other alternatives. The dynamics of this seem to play out differently than doing an in-app upgrade.
• The fear of wasting money in purchasing apps and how that can often drive people towards free apps simply because the apparent risks are so much lower. One of the implications of this fear or hesitation is that purchases made within an app are much less daunting than purchases directly from the App Store.
• How social proof and personal recommendations can drive purchases in a way that less personal marketing never does.
• The misconception that the App Store is stocked by Apple directly rather than by independent 3rd Party apps. This sets up unrealistic expectations with customers about what is sustainable and reasonable to expect from developers. How Apple’s decision to make the iWork suite free feeds into this perception with customers that Apps should come free with their devices with infinite free updates.
• The role that good customer service can provide to personalize and humanize your relationship with customers. This can serve as a great avenue both for their continued support and to help give them a realistic set of expectations.