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by wmanley
323 days ago
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Depends on willingness to pay - Even if your cost per customer is 0 maximising profit would mean that it’s better (for you) to sell 10 licences for £1,000,000 a pop to rich customers who really need the service rather than 500,000 licences for £1. It’s a shame because those 500,000 miss out on your product even though it would cost you nothing if they were to use it. This is where price segmentation comes into play - maybe you can still charge those 10 big customers the full whack, while providing benefit to the 500,000. |
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An example: Angry Birds 2 made hundreds of millions by selling at 79p to hundreds of millions of people. Think what it takes to make an app to sell to 10 rich people to make the same amount of money.
I'm not saying it's impossible to make money selling to rich people. It's just in no way the only way. Many ways of making money involve selling to many people.