What is the right price for your app?

This is a the first part of the post on price, focusing on short term experiments. Read the second part for the longer term analysis

You want to know how to increase your sales by up to 40% without any development nor marketing ? Read on ! The secret is simply to set the right price.  And to determine what the right price for your app should be, the best thing is to … test for it !

1st test of price change from $0.99 to $1.99

Here is the result of an experiment that I conducted for my iPhone /iPad app, PicItEasy. 

1. Initially priced at $0.99, I tried to price it at the second tier level at, $1.99, starting January 7^th, 2013. Sales volumes decreased by more than 20%, from an average of 65 per week to 50 per week (the increase around Dec. 24th is most likely linked to Christmas and has nothing to do with the price change)

2. However in the meantime the Sales Amount actually increased by 40% from approx 35€/week to more than 50€/week and remained at that level the weeks after.

The volume decreased less than the price increase. The simple experiment led to a 40% increase on sales and did not cost me a dime in development :-)

2nd test of price change from $0.99 to $1.99 and to $2.89

6 months later, PicItEasy had become quite successful in the App Store and the sales increased by 500%. So I decided to see if the price was still right, after the significant increase in popularity and launched a new experiment:

• ·      Week 1 (Aug 12-18) : control week, at $1.99
• ·      Week 2 (Aug 19-25): decrease the price from $1.99 to $0.99
• ·      Week 3 (Aug 16-Sept 1st): increase the price from $0.99 to $2.89

Results : 

1. In volume, again the higher the price, the lower the sales volume. The week at $0.99 was boosted by the websites / bots that advertise for price drops in the App Store. The first days saw a big increase in app sales, which tended to wear off at the end of the week. Volume decreased very sharply (-55%) when price increased from $0.99 to $2.89. Price remained at $2.89 the weeks after (Sept 2^nd and Sept 9^th) and volumes stabilized at around 180 per week.

 

2. Again, the picture is very different on Sales Amounts. Although less strong than what was observed in December, I see a confirmation that at $1.69 (260€), I earn significantly more than at $0.99 (220€). The difference would probably have been even greater without the « promo alerts » that many website sent to their audience and that boosted the first days of the $0.99 week. Another great insight, at $2.89 (320€) I observed again a strong increase in revenue for the first week, that is not so apparent the 2 weeks after. I probably hit the limit after which the price will start to decrease. From this data, it becomes likely that $2.89 is the optimal tear level. Increasing too much the price will eventually lead to too strong a decrease in demand and in turn decrease the revenue.  

  

I hope this post convinced you that you cannot know if the price is optimal until you actually test for it.  My conclusion, that $2.89 is the optimal price, is true only for my app PicItEasy, given its audience and competition. A very different conclusion might be reached for your app, and $0.99 might very well be the optimal price. 

So start experimenting!

Appstore Search Engine Optimization - ASEO

63% of app discovery is made through search, according to Nielsen :



What drives the app discovery through search are the keywords.

So let's jump on our keywords and start optimizing ! ASEO is the new Eldorado !

You go to itunes connect, find your keywords and .... alas ! The keyword section is not editable :-(

To protect the future users from your evil mind, Apple will not allow you to change your keywords unless you are updating your app meaning, they can review your keywords before pushing them in the AppStore. This means that the optimization cycles are awfully looooooong. It took me several months to build up my knowledge. Hopefully this blog post will help you getting a quicker start up than I did!

Keywords - Basic rules

First, let's start with the ASEO theory that you can find everywhere :

• What does not count in your keywords ? Your app description will not count at all. It will give a good idea of what your app does, but once the AppStore browsers found it. So, not usefull at all to increase your app discovery.

• What does count in your keywords ? Your title and your keywords section. Knowing that the most downloaded apps have the most keywords (see this interesting SensorTower post for reference), you should not overlook the title as a very precious real estate for keywords. Often you'll find very short title, with names created for the occasion. NOT A GOOD TITLE. Your title should be descriptive, containing your most powerful keywords. That is why PicItEasy's full title is "PicItEasy PRO – Camera with stabilizer, anti-shake, auto timer, PDF, Dropbox, Instagram and labels"

The longer tail keywords should be inlcuded in your keywords section

Keywords - More advanced rules

Then comes the ASEO theory that I learned the hard way, through trial and error.

1. You app category will be another source of keywords. For instance, for PicItEasy, I got "Photos" and "Videos" for free. But .. only in English ! This means that in the Spanish Appstore for instance, I should add "Fotos" as a keyword or in the App title because otherwise it is not included. If I did not do that, searching for "PicItEasy fotos" would not yield any results. The AppStore search engine algorithm only returns items containing ALL keywords. So if a keyword is very likely to be associated with your app, you have to add it. Otherwise as soon as it is part of the searched items, it will exclude your app from the search results.
2. If your app is in English as a default language, all your English keywords will also work in the local appstores. This is a very simple statement, but it has two very important consequences :
3. If you find a keyword to be very international like 'facebook' for instance, using it as a keyword in English will make it a free keyword in every local appstore. No need to repeat it in French / Italian / Spanish / ...
4. There is no downside for keyword localization. You keep all your English keywords in case local users search in English, AND you specify you local keywords for users searching in their own language. It can only bring you more traffic. Later on, I will write another post dedicated to localization effect

Keywords - Optimization Strategy

OK, you have a long title and keywords, all localized in 5-10 languages. Great. Now you can start optimizing :-)

First, there are some tips that you should keep in mind. A good recap can be found here :

SensorTower is also a great service for keyword optimization. One of their feature is to automatically check for those basic rules and guide you towards improving the way you created your list. They automatically detects variations of a same word and advise you to choose the most probable one, white spaces etc,...

Second, you should check, for every country how your keywords rank. Again, SensorTower can help you retreive those rankings automatically. Rule of thumb, if you rank below the 20th place, you should ditch that keyword for that country. Except if it is short and in English, if you beleive it could be useful for other languages.

Third, a rather drastic approach is to double your "keyword real estate" by launching a "sub app" that would focus on a subset of functionalities and would use more focused keywords. For PicItEasy, its little sister is called PicShare and implements only the sharing functionalities of PicItEasy. PicShare is free without any restrictions and links back to the PicItEasy Lite. It thus has two uses :

1. its focused keyword help the app to be discovered by piciture sharing afficionados. Plus, as it has better relevancy on its keywords, it is likely it will be quite well ranked on those specific keywords (see below)
2. for every download of PicShare, some of the users will download also PicItEasy. And as downloads = higher ranks, getting 2 downloads from a user has quite some value ! 

Insights on the App Store search engine

Those reports that you created to track your keywords rankings by country will help you monitor your app performance and understand some of the dynamics of the AppStores, its hidden rules. Here are a few I came to understand. Screenshots are from SensorTower.

1. Number of downloads. PicItEasy went free for a week and was adverstised by AppGratis. As you can see in this graph, the ranking of PicItEasy's keyword skyrocketed during the time of the promo, before going down again, but still with a significant increase compared to before the promo. 


2. Apple runs monthly updates. On the 1st of May, you can clearly see the rankings were updated, probably taking into account in another way the big downloads of the previous month

I will write a dedicated post for a full analysis of this promo with AppGratis

3. Relevance between the app and the keyword. Check this graph from SensorTower comparing the ranking of PicShare and PicItEasy on a the "pdf picture" keyword that both app share: 

Despite much lower download volumes, and since its first day, PicShare has consistently ranked much much higher than PicItEasy. Even after the Free App promo with App Gratis that led to hundred of thousands of downloads for PicItEasy, it still ranked lower than PicShare and its less than a thousand daily downloads. It must be because this keyword has been assessed more relevant for PicShare than for PicItEasy

4. There are phenomena that cannot be explained :

For 7 days, PicItEasy lost ground on most of its competitive keywords. The impact on sales was immediate with a -50% during that week. Luckily this only lasted 7 days, and I don't know why it started and why it stopped.

So nothing should be taken for granted in the App Store, everything can collapse from one day to the other !