We varied the price of one of our products. What we saw was that pricing was perfectly elastic. In other words, our gross revenue would remain constant...There's no way to use price to increase or decrease the size of your business.
I really wanted to say something pithy and wise here, but this subject truly confounds me. I have many types of product out there: websites, apps, and e-books. I charge nothing for websites, nothing for apps, and a good bit for my e-books.
I have to say as a content producer, I'm much happier selling ten copies of my book about being a ScrumMaster for fifty bucks each (shameless plug: http://tiny-giant-books.com/scrummaster.htm ) than I am having 20K people visit my wife's recipe site each month where I might make 40 bucks from ads. (http://hamburger-casserole-recipes.com/) Of course, she feels much differently about this!
I've been reading about startups and pricing for some time. It's my conclusion, for what it's worth, that you have to experiment and figure out this stuff as you go along. It wouldn't surprise me if different people with the same kinds of content have completely different pricing models. Looks to me like the pricing model is based more on how the usage scenario fits into a particular user demographic than the type of product you are selling (apps, content, books, services, etc.) The average usage scenario of a technical person wanting greater efficiency from his expensive set of computers is completely different than somebody looking for a list of instructions on how to prepare tater tot casserole. Or somebody wanting to share a random 140-character quip.
I really wanted to say something pithy and wise here, but this subject truly confounds me. I have many types of product out there: websites, apps, and e-books. I charge nothing for websites, nothing for apps, and a good bit for my e-books.
I have to say as a content producer, I'm much happier selling ten copies of my book about being a ScrumMaster for fifty bucks each (shameless plug: http://tiny-giant-books.com/scrummaster.htm ) than I am having 20K people visit my wife's recipe site each month where I might make 40 bucks from ads. (http://hamburger-casserole-recipes.com/) Of course, she feels much differently about this!
I've been reading about startups and pricing for some time. It's my conclusion, for what it's worth, that you have to experiment and figure out this stuff as you go along. It wouldn't surprise me if different people with the same kinds of content have completely different pricing models. Looks to me like the pricing model is based more on how the usage scenario fits into a particular user demographic than the type of product you are selling (apps, content, books, services, etc.) The average usage scenario of a technical person wanting greater efficiency from his expensive set of computers is completely different than somebody looking for a list of instructions on how to prepare tater tot casserole. Or somebody wanting to share a random 140-character quip.