Mobile App Pricing

October 14, 2013
Action Card Home Screen

Volano is preparing to launch a new mobile app for franchise companies in February at the International Franchise Association Convention in New Orleans. We’re busy signing up beta-testers now and are encouraged by the early success.  Our mobile franchise location review app Action Card went live in beta two weeks ago and one of the things we hope to accomplish by signing franchise owners up is how much value this review tool is providing them.  We’ve done some research on SaaS pricing and hope to find a profitable price point that our clients won’t flinch at paying.  This has proven to be one of the harder challenges of successfully bringing software product to market.

In any business, your pricing can define the perception of your product.  Underprice your product and you’ve diminished its perceived value as well as your return on investment.  Overprice it and you risk low sales conversion.  I came across this blog by the Harvard Business Review (we’re wicked smart and read such publications as the Harvard Business Review) on mobile app pricing and the trend in “in-app” purchases.  According to author Colin Raney, the crowded app space and race to zero pricing have forced to developers to create products that create real value and enjoyment and get the users to pay during the use of the application and at precisely the sweet spot point when they are most fully realizing the benefit of the app.  In fact, 75% of total revenue from the Apple and Android app market is coming from in-app purchases.

We are wearing our pricing approach on our sleeve.  With Action Card, an in-app strategy probably doesn’t make sense so we are relying on signing up as many beta-testers as we can this fall and more importantly, monitoring usage.  We’ll try to quantify time/cost savings that our clients are seeing by using an automated review tool as well as the feedback they’re getting from their field managers.  We know what our development time has been creating and improving the tool as well as the expense of launching and maintaining customer service and sales teams.  Listening to our customers and incorporating their suggested changes will allow us to land on what we hope will be the best, monthly subscription pricing, be it tiered based on functionality or client size.