The Flying Jalapeño Lives

This has been a raging debate for several months now. Many have taken a philosophical and idealistic approach to the argument, but such a lofty opinion requires a minimum bank account balance.

The truth is, as much as you and I want to charge more for our apps, we are constrained. We didn’t take VC capital. We have bills. We have angry significant others who have supported us and sacrificed, letting us sit and stare at our computer screens for unimaginable amounts of time.

Most of us just don’t have the luxury of picking our price point on principle. Even still, I did price Compounds at double the going rate, $1.99, though not exactly a princely sum.

Since Compounds is a very, very niche app (how big is the market of iPhone users that perform mole calculations?). My pricing strategy must reflect that. “But, Mr. Jalapeno, your app is now $0.99. Are enough people are going to buy it?” Well, thats a tradeoff we made. When we had the luck of being featured on the front of the App Store, our pricing strategy HAD to change.

This wasn’t clear at first, and our sales are probably slightly less than if we had reduced the price quicker. If you look at the graph from my last post, you can see how are sales had definite downward trend.

If we hadn’t reduced our price for the weekend, we would have left even more money on the table.  How much is hard to say.

Our current price is still $0.99. Do we raise the price, do we let it stay at this level indefinitely? Thats a hard question I am constantly thinking about. The answer of course is, it depends.  I don’t remember where I read it, but someone said “Don’t mess with your price during a positive trend”, and I believe that.

If sales drop to a certain point, I will most likely raise the price to recoup revenue for the lost volume. For now, I am happy with the consistent sales of Compounds.

So with this data in mind what are my thoughts on pricing new apps?

Niche Apps:

1. I will price them according to what I THINK I need to be profitable. Most likely this will be above $0.99. This is just good business sense.
2. I will ensure my niche apps are of high quality. No one pays for crap.
3. I will release a “lite” version to help drive sales.

Wide Appeal Apps

1. It is highly likely I will release these at $0.99. My market is so large, if I have decent idea, I should make it up in volume.
2. I still will make a great effort on these apps, but depending on the time investment, I need to weigh tthey amount of polish against the amount of risk.
3. If I do price this app at $0.99 AND it is an app that promotes repeated use, a “lite” version is in the cards.

Every situation is different and you have to evaluate for them for your self . The first time will be hard because you have no data, so my experience may be of use to you.  This is the methodology I will be using until the data steers me otherwise. If you have other thoughts, let me know.

Finally, after my promise, I have gotten around to tabulating some data. I won’t delve too deep into the analysis of Compounds‘ sales figures. I will be dipping into greater detail in another post. For now, I just want to get our sales figures out, hopefully, to assist other developers in estimation of their own sales.

I’ve used Numbers to graph our sales for the import range of data. These figures are AFTER Apple’s 30% rake. I’ve also placed some significant markers that properly scope the data.

April 11th and 12th were a Saturday and Sunday, which are traditionally poor performing days for our work-oriented Chemistry app. We did have a few sales, but they were, in fact, our worst 2 sales days since we launched Compounds.  For reference, are sales were normally a modest 5-15 units a day. (Edited)

Tuesday, April 14th was an awesome and welcome surprise.  I honestly was a little down about out app until this happened.

You can see another significant jump on the day we decided to reduce the price of Compounds to $0.99. The effect of dropping the price just $1.00 was astounding.  In retrospect, I probably should have reduced the price earlier to make it into the top 100. Ahh, hindsight…

Lastly, is next Tuesday, when we moved to the second page. What a difference a single click makes.  You can see we approaching a asymptote near $100 a day, which I would be extremely satisfied with.  For our first released app, I am extremely pleased.

In another post, I’ll also compare this data to our popularity within the Productivity category.

It’s a seemingly natural transition. The more you use the platform, the more you want to learn. This is a path that almost  inevitably leads to application development. Maybe not in a professional context, but many will at least dabble in AppleScript or create some freeware out of need or desire.

For me, this was accelerated by the iPhone SDK. It is a simple sandbox that allows beginner programmers to have a chance to focus on a well defined set of functionality and features.  Moreover, it provides UIKit classes that do the visual heavy lifting. In my opinion, it is the perfect environment for a fledgling programmer.

The ecosystem created by Xcode, the SDK, iPhone Simulator, Instruments, etc… has allowed many programmers to not only write, but also distribute apps with an ease that has never before been seen in world of software publishing (at least not in my limited knowledge of this area). Of course, the downside has been the flood of $0.99 apps that are negatively impacting the App Store.  Additionally, developers have given up a large amount of control, but many of us new to the game didn’t know we lost.  In regards to bringing new programmers to the platform, the overall effect seems positive.

Just being a curious Mac user has afforded me a great opportunity. Mostly, I’m just grateful I have a chance to be create my own company and be my own boss. Which, while not impossible, would have been much more difficult without the iPhone.

Now that our first app, Compounds, is accumulating a significant amount of ratings, I have found myself pondering over the subtleties of App Store ratings. The hard truth is that customers, for the most part, are not rating your app. Even fewer take the time to write a review. This isn’t exactly a revelation, but could we use these facts to draw any worthwhile conclusions?

Several months ago, Apple began allowing quick ratings during app deletion. However, the ratings received from this process tend to be negatively biased. This makes sense of course, users will typically delete apps they don’t like, or are bored with. You and I, being awesomely objective, logical software developers, possess the incredible ability to rate an application based on its merits, regardless if we choose to delete it from our phones. Unfortunately, most of our customers aren’t as deliberate in there rating process. Moreover, Apple provides no comparably easy rating mechanism for a customer who actually likes your app and decides not to delete it.

Of course, there’s always iTunes, but on device rating is much more convenient for users. I’m not saying people won’t go to iTunes to post a rating. As with many things on the internet, those with the strongest opinions, good or bad, will be attracted to rate your app in this manner.

Using the above thought process, we can categorize several types of customers that constitute the bulk of our ratings and their most likely rating (in order of occurrence):

1. Feels very strongly about your app, in a negative manner (1 star)
2. Feels very strongly about your app, in a positive manner (5 star)
3. Recently purchased your app, and deleting it because it adds no value (1 star)
4. Feels your app is ok, but is critical of its flaws (3 star)
5. Feels your app adds value, and does not mind taking the time to tell others (4 star)
6. Feels your app is subpar, rates it poorly, but is keeping thinking it will get better (2 star)

Now, you almost definitely won’t agree with my categories, or their frequency and possibly think I have a negative view of the world. Regardless of whether or not I had a tormented childhood, people on the internet find it much more natural to express negative feelings.

Moreover, many of your happy customers are just too busy. They enjoyed the 60 seconds or so they used your app today, but don’t have any inclination to express this feeling in the form of a rating. This is why most of your reviews will come from the extremists, good or bad.

So, with this knowledge (and rampant speculation) in hand, lets look at some of the patterns that arise out of customer ratings and what they could mean about our apps.

The Ski Slope Ahh, the worst for first. You apparently have alienated the majority of your customers. The discussion of this pattern is brief. It reflects the presence of several glaring defects within your application, which you should have no problem finding.

The Cylon Raider Now here is one we can sink our analytical, pattern oriented minds on. Somehow, you have managed to completely polarize your customer base. As usual, you’ll have a few on the fence.  With the exception of a political application, how did you accomplish such a feat? (Full dislosure: this is what Compounds is looking like)

A five star rating means that your app has filled a need, and the customer is able to use it effectively. A one star rating, means exactly the opposite. Lets think about that. A certain percentage of your customers will know exactly what to do with your app in spite of what you tell them. Many others will be lost without a clear interface, clear instructions, and a clear description.  These customers aren’t idiots, you are.  many of your customers don’t understand how to use your app, or it doesn’t work how they thought it should.  The ones who gave you the five star ratings are probably technical people, or at least people with a significant amount of computer experience.  You can’t assume that of all you customers.  Make you app design and description clear, and you will attract the customers you want, and they will appreciate (and rate) your app accordingly.

The Shop Teacher This one is close to the Cylon Raider, but a step better in the right direction. You have cut down on those bad reviews by addressing some of the problems stated above.  Some of the polarization still exists, however. Your learning, but you need to think critically and honestly about your app.  The advice is trite yet needs to be said.  Read your reviews, email your customers (if you have any on file), and pass your app around to strangers and get their reactions. You need objective information to improve your app.

The Hand Gun We finish with the best, your goal. You please most of your customers. Those that you can’t, are few in number. You have been marketing your app to the right crowd, and have designed an interface that your mother could be proud of.  As with the Ski Slope, their isn’t much to say, but it seems you know a lot more than me anyways.

These aren’t all the patterns of course, but these seem to be the most common and, I think, provide some great landmarks for customer acceptance of your app. I feel that these mental exercises can really help you get a handle on where you need to go next with your app. It also highlights that everything is your fault. There are no stupid customers, just bad directions and clunky interfaces.

Data is starting to roll in from Apple featuring Compounds in the “New and Noteworthy” section of the App Store.  My first reaction was, “Wow”.  Our Tuesday sales were roughly 60x our average sales since we released our app.  Needless to say, we’ve been busy.  I’m just glad our homepage is still standing.

In the next week I will release some figures in the spirit of other bloggers here, here, here, here, and here.

When were getting ready to release Compounds, it was really hard for us to get a handle on the answers to questions like:

What is our price point?

Do I offer a lite version?

Do start at a low introductory price?

What is the effect of a review/top 100/staff favorites/etc…?

There is a lot of mystery still surounding these questions and those I linked to above (and many others) really helped us make better guesses at the answers to these questions.  Notice I didn’t say, THE ANSWERS, because frankly, they don’t exist.  There is no “one” strategy.  We are just riding this wave and hoping we can sustain this momentum after we are off the front page.  But this isn’t just about marketing, it means we must continually improve and make Compounds a compelling option for all our potential customers.  Time will tell.

Something I figured out that I found a little interesting.

When a user enters a search term in the iTunes Store, they are presented with a grid of the top items from several categories. Two items for “podcasts”, four items for “albums”, two items for “movies”, etc… What we care about , obviously, is the “Application” section. The top two apps for that search term are displayed in that section along with two additional links: “see all” and “Applications”.

If you follow the links you get a long list of every app matching the search. Where this gets interesting is how they determine the ranking. Well, here’s what I have found out using the progress of Compounds.

When I search iTunes for “chemistry” and look at the list of apps, Compounds has steadily crept the list. Now it seems stuck at #8. Oddly, if I look at top paid apps under “Productivity”, Compounds is the only chemistry app in the top 20, so what gives?

It appears the following is happening:

iTunes first displays apps with names containing the search term. These apps are displayed in order of sales rank (last 24 hours, or a cumulative over the past week, I’m not exactly sure)

Next, iTunes displays apps with descriptions containing the search term.  These apps are also displayed in order of sales rank.  Here’s another gotcha, the search term must be near the top of the description or the app will NOT be displayed in the search.  I am not sure how close it must be, or if it gets worse the further down the search term resides.  I do, however, know there is a limit.

Good news, if you didn’t know, the name of your app on the store does not have to match the name of your app displayed on the home screen.  So, you can manipulate these search terms a little.

I hope this helps some of you with your naming strategy.

While putting Compounds together, we had the luxury of using the code, tutorials, and resources of many others.  This list is a little bit of the resources we used, and a little bit of a thanks to these individuals and organizations for their help, direct or indirect.

Philly CocoaHeads and Indy Hall

Local chapter of CocoaHeads hosted at the more than generous Indy Hall in center city Philadelphia. Great people, advice, motivation, and networking. What more can I say?

Matt Campbell

Of App Shop.  An iPhone developer who writes a very helpful dev blog and has provided me personal advice regarding App Store Econ 101.

Ricardo Vidal

A Biotech specific blogger who gave us our first review.

MacResearch

Gave us a great opportunity to write and post a comprehensive showcase review on Compounds.

stackoverflow

A very active question and answer site, especially for iPhone developers

Bill Dudney

Author of a great Core Animation book, iPhone book, and a great blog. We specifically used some nice “exploding” Core Animation code from his book.

Jeff LaMarche

Author of another great iPhone book and a very frequently updated development blog.

MDN

Scotty of the Mac Developer Network produces so many great podcasts, worth every penny of the membership. They are really eating into my Jim Rome time.

iPhone Tech Talk, Toronto

Not to suck up, but these guys really helped us turn a mediocre app with a poor interface into something worth using.  John Geleynse, Matt Drance, Michael Jurewitz and crew provided great design information and even better motivation.  I’m deeply saddened I will not be able to attend WWDC.

Of course, as always, there are many others, but this list can get anybody moving in iPhone Development.

Finally, Compounds receives the recognition it deserves.  No, but really it’s nice to see it riding high on the front page of the App Store, if only for a week.  Of course, like most developers, we were uninformed and were left to deduce the 3000% increase in sales for ourselves.  Not that there’s anything wrong with that. (Seinfeld quote).

Off of WordPress.com and in to the wild with a fresh new domain.  Just signed up with DreamHost with an awesome 90% off deal.  Can’t beat that.

WordPress is nice, so nice, look for my company site to be moved over to WordPress, too.

Now, maybe I can start posting things of value…