Effective pricing method found by selling software for 15 years

BySharpstick's photos

Software that allows you to erase advertisements from web pages if installed in the browser is "Ad Muncher"is. He is a developer of this software and has been involved in many startup companiesMurray HurpsHas released knowledge gained from the experience of selling Ad Muncher for 15 years.

Shareware Insight: Pricing - MurrayHurps.com
http://www.murrayhurps.com/blog/ad-muncher-pricing


Early in the release of Ad Muncher, this was an unlimited license product of $ 15 (about 1500 yen). It seems that we continue to provide updates to users who got Ad Muncher at the beginning of the release until now.

◆ Currency problem
Murray lived in Australia at the time of Ad Muncher release, so we had to change money from selling to Australian dollar from US dollar. Even if I sold the same service at exactly the same price, if the value of the US dollar declined by several points, the number of sales dropped to about half, and it was said that the fluctuation of the currency rate had a big influence on sales Thing. So it seems that Ad Mercher was sold only at Australian dollar.

ByEmilian Robert Vicol

However, when selling Ad Muncher only in the Australian dollar, it seems that the number of sales has decreased markedly, and it was necessary to immediately return to selling in the US dollar. So, "Every time the rate of the US dollar changes, it has been affected by the large number of sales," Murray says.

◆ Select a price
Ad Muncher has tested various prices for several years. Among the things I tried in setting such a price, say that the best approach is "conduct a comprehensive price survey for targeted consumers".

When Murray asked four questions on price for about 600 existing users, the following graph was completed. The horizontal axis of the graph represents the price and the vertical axis represents the support rate, and it is assumed that "fair amount (blue)" "maximum amount (payable) (green)" "amount that feels too high (red)" The amount of money (Pink) that can be paid "is linked to the answer of the broken line in the graph.


From this graph Mrray decided the target layer of Ad Muncher, but what he saw was the red circle part of the green line that represents the "maximum payable amount". Paying attention to the price range of 19 dollars, which was the highest acceptance rate among these, and 29 dollars before the approval rate drops at a stretch, I decided to make one of these two new prices for Ad Muncher is.

Murray decided to prepare two premium plans and basic plans to make it compatible with both prices, rather than choosing which price to choose, which one hesitated.



The difference between the basic plan and the premium plan seems to be a difference whether there are almost frequent updates and priority support, but to make the user think that "If you have two plans, you can pay the higher one" With only that change, Ad Muncher 's income increased by 40% overnight, and even later sales have led to a wonderful result over the past results.

Looking at the ratio of premium plan subscribers and basic plan subscribers in FY2012, we can see that the unit price per customer will have risen by establishing a two-stage plan.


In addition, unlimited licenses were sold at about $ 20 (about 2000 yen) in 2000, but in 2010 we have succeeded in raising to 70 dollars (about 7100 yen).


Murray also reveals that he had different price range characteristics for different countries. The graphs below are graphs showing the results of the price survey conducted for each market, but the shape of the graph is quite different from the one when the market survey was conducted.

America


Australia


Canada


China


Europe


England


Russia


◆ Settlement system
Initially, Ad Muncher used a third-party payment system specialized in the shareware industry. However, unfortunately the service seems to have ended, and after that it seems that they have developed a platform for settlement processing. Murray says that the advantage of possessing a settlement system by themselves is that it will be instantly accessible to funds and more control over the purchase experience of users.

And the minus side is that "we must deal with many fraudulent acts by ourselves". The graph below shows a graph showing the number of fraudulent acts until switching to our settlement service in 2007 and using PayPal's payment system in 2011. The number of fraudulent activities (K = 1000) processed on the horizontal axis by year and the vertical axis by one year is shown.


"Illegal act" as used here means refusal to pay. For example, if a user purchases software but does not leave a withdrawal balance on the bank, Ad Muncher must pay a banking fee of approximately 20 Australian dollars (about 1900 yen) due to refusal of payment He said that he was extremely annoyed.

Also, the fraud detection code developed independently by Ad Muncher is not far from those of companies dealing exclusively with payment related services, and the advantage of paying the settlement system by themselves disappears, eventually using PayPal at the end Murray says, it turned out that everything was solved.