Pricing from a customer’s point of view
In response to the pricing and licensing changes to one of the shareware apps he was using, Zaine Ridling writes:
One-trick utilities should never cost more than $20-40 per version.
I certainly respect Zaine’s opinion as a customer but this is quite possibly the most absurd thing I’ve heard in quite a while. There is nothing more powerful than a customer being able to choose where to spend his or her money, but any business owner is free to price their product any way they choose. The market will eventually determine the fairness of the pricing model.
Zaine also states:
I support developers who want to make a living from their work, but there are very few one-trick-utility apps that one could do that with…
I’m sorry Zaine, but I think you’re just trying to justify your point of view and that you don’t really care if the developer can support themselves from their work. This is also a very uninformed statement to make, as can be seen by simply reading the microISV Profiles.
And finally…
Most often developers build a variety of supporting, or different apps to make money rather than overcharge for their only app.
Ignoring the fact that you make a sweeping generalization that is not true, you propose a business model that is simply not maintainable by most shareware companies. Doing what you suggest would be doing even more of an injustice to the customer because the developer will not be able to provide adequate support due to time constraints, all the while making even less money because you want things so cheap.
Last year Six Apart showed us that communication is the key to deal with problems and to turn a negative into a positive. The best thing to do is to get the message you want out there immediately to set the tone from the very beginning. If you’re wrong, your customers will let you know and you can adjust accordingly. Most customers will respect that you’re willing to listen and adapt as necessary.
April 12th, 2005 at 3:46 am
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April 28th, 2005 at 9:45 pm
First, thanks Brian for responding to my post, and I appreciate you making clear that I’m arguing from a customer’s viewpoint. While it’s inarguable that, as you write: “Any business owner is free to price their product any way they choose. The market will eventually determine the fairness of the pricing model,” my point was the drastic price increases I’ve seen between versions over the past 12-18 months. In the case I cited, As-U-Type had eliminated its Lifetime License version which sold for $30, and switched to a 12-month license for $50. Unlike a utility suite, As-U-Type does one thing: text replacement via words or spellcheck. Also, no additional functionality was added for its latest version, so there appeared to be no justification — for the customer — to upgrade to a version whose price had increased by 60%.
It is the nature of utilities that users have several or many of them on their computer, not just one or two. I currently have well over a hundred, AI Roboform, Blogjet, DirSync, EmFTP Pro, FeedDemon, Investment Wizard, Nero, UltraEdit, and WinRAR among them, not to mention a number of freeware apps I donate to with each version. But when they become cost prohibitive, one’s budget forces choices, usually toward freeware alternatives. By charging more than customers can afford or justify for a “one-trick utility,” a developer risks killing the golden goose. Customers also run comparisons: I can buy an entire office suite from $80-$130. But one backup app is going to cost me $80? The cost of upgrading a high-priced utility is also a factor. While a time-limited policy (12-months) for As-U-Type is a good deal for its developer, Fanix, it’s a bad deal for users.
Finally, understand that users are reluctant to drop $50 to try a product. What if the developer abandons it or doesn’t support it well over the next year or two? I’d rather the developer charge $30 to buy a license to get into the program, and after that, allow the developer to charge more on upgrades. Users appreciate and will pay for a program that’s actively developed. I’ll never begrudge developers from going to the bank, but as a customer I’ll resent being taken to the bank. Six Apart supports my view, since customers were willing to walk rather than pay what they considered to be an unfair price increase.
April 28th, 2005 at 9:46 pm
Oy, I need to learn math. The As-U-Type price increase was 40%, not 60% as I wrote above.
April 28th, 2005 at 9:53 pm
I forgot to mention that this does not include the devaluation of the USDollar against other currencies, viz., the Euro, which has effectively raised many overseas software apps by 35-50%. The impact of exchange rates on software pricing is another issue.