App Store Experimentation: Price Increase

Reminder+ (App Store link) is a free, with an optional In-App Purchase1: Send via Messages.

The price of this IAP has, until now, always been set at $0.99 (Tier 1). At this price, the conversion rate of downloads-to-IAPs has been good, sitting between 10% and 14%.

That said, I have a theory regarding a possible price increase:

Changing from $0.99 to $1.99 won’t have a significant effect (decrease) on the IAP conversion rate.

The reason: if a user is considering the IAP, they’ve already downloaded the app and (probably) sent a reminder or two, via email. At this point, the value of the IAP is clear. Once a user perceives this value, I don’t think there’s much difference between $0.99 and $1.992.

Price change

On the 5th Jan 2016 I put the theory into practice and increased the price of the Send via Messages IAP to $1.99 (Tier 2).

I’ve been thinking about this for a while, but I waited until January because I wanted to leave version 2.0 running for a few months, without any change to prices, so I could get a good baseline for the number of downloads and IAPs with the latest update.

So far the change looks positive. Still, I want to let the price experiment run a little longer, without additional changes, so that I can say something meaningful about the increase.

As far as additional changes go, next, I intend to change the keywords in hope of improving App Store search performance…

  1. There are currently two In-App Purchases, one for sending via ‘Messages’ and the other for AirDrop. The former is undoubtedly the main IAP, the latter is a fun option that almost nobody opts for.
  2. Contrast that with paid-up-front apps: whilst I don’t have any numbers to back this up, I’d speculate that for paid apps, more users see a difference between $0.99 and $1.99, as the ‘untried’ app presents more of a risk.