What price should I charge people for using my app? It’s a pretty basic question, and one fundamental to your business: charge too little, and people won’t use your service. Charge too much, and you’ll have the same problem.

But – and there’s always a but – if you’re taking pricing advice from people who will never pay for your service, you’re making a big mistake.

By way of example, I wrote a while ago about InboxCleaner (another app design made easy with ThemeForest), and about the choices I was facing: keep it as a monthly subscription service, or charge a one-off fee, or raise the price, or lower the price; you get the rough idea. In the end, I chose to experiment with a one-time fee of $20. This month I’ve had 12 people sign up, and the app’s gone from earning $50/month, to $240. Colour me both surprised and happy. I guarantee that plenty of people will try to encourage me to return to previous price plans such as $5/month though.

You see, when you ask for pricing advice, some of it will be absolutely worth its weight in gold. Sadly, you’ll also receive a lot which is, frankly, crap. Something along the lines of “I wouldn’t use this service if you paid me in gold-plated puppies… but I think you should be charging $X” . You must discard any and all advice from people who say this; they’re the opposite of your target market and you will only harm your business by listening to them.

Likewise for anyone who comments along the lines of “You should charge $1/month, because there’s 6 billion people in the world, and if only 1 out of 6 of them sign up, you’ll be making $1 billion/month!” An extreme example, but I’ll tell you now: if you suggest charging $1/month for SaaS, it shows such a fundamental lack of understanding, I will discount everything you’ve ever said. and everything you will ever say in future. Rob Waling wrote a fantastic explanation of why $1/month will never, ever work, and the comments are also well worth a read, as is the Hacker News discussion. Just for the avoidance of doubt:  in my mind this is very different to charging $X/year.

It’s very easy to be negative; here’s some proper, real advice: if in doubt, charge more. If you don’t know what to charge in the first place, pick a starting point and experiment. I’m still trying to get CampaignBar off the ground, and am starting with a price point of $20/month. I’ll shortly be writing a few A/B tests for the pricing, and seeing what sticks and what doesn’t.

Why experiment? Because ultimately, the best pricing advice you can get is from your customers: charge the most that they’ll pay, and all will be good.

In other news, a friend of mine has recently launched an amazing forum for people involved in SaaS and web apps: SaasAholics. Come and join in the discussion! :)

Written by Tom

Tom

Are you looking for web development or just someone who will work with your business needs and not against them? Get in touch with me here, or take a look at my business website. I’m confident I can help you.

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