| I used to think starting with the higher price was better, but now I think it definitely depends on the feature set at the beginning. It's more subtle than that: you need to discover what the current features are worth to people. You might be surprised to find that value is higher than what you would think, regardless of the number of features. It's possible that even one (great) feature is something you can charge a lot for. As for the psychology of it, people are ok with paying less for something that used to cost more, but the opposite situation can create resentment. Are people more likely to spend $24 or $36 upfront than $3/month? There's some research I've read about the psychology behind the failure of web-based micropayment systems you should read (I can't find the reference now, but I think Shirky wrote it). Anyway, the gist of it was: at too low a price (e.g., $1, $2) people just don't bother getting out their credit card to pay for something. So you're much better off bundling it in a larger package, or in your case, for a longer time period. |
Very, very good points, thank you again! Wow, it looks like I've got some thinking to do.
Anyway, the gist of it was: at too low a price (e.g., $1, $2) people just don't bother getting out their credit card to pay for something.
Hmm... interesting. Thanks, I'll look into this.