We live in a world where the cost of technology is dropping faster every day. If you’re reading this blog, you already know this. You’ve been around technology long enough to have experienced it first hand many times over, LCD televisions being the über-classic example. Ordinarily, a drop in prices is a Very Good Thing, but a drop all the way to free? Not so much.
Apple turned the music world upside-down when they established $0.99 as the new price for a song. They did they same thing with software when they brought us iPhones and iPods capable of running apps. Why did they drive these prices down? Because unlike the legendary Gillette story of old, they’re in the business of selling the razors, not the the blades. They have deliberately commoditized their complements (i.e. music and software) to drive sales of what matters most to them – hardware. And, if you’ve purchased any Apple products, you know they don’t compromise on those prices.
At almost the same time, Chris Anderson came along with the concept of “Free” and it wasn’t long before we saw the price of iPhone apps drop to zero, as in $0.00. (I’m not saying Chris was the cause, just that that timing was similar, and the notion of “free” seemed to go into our drinking water right about then.) Now it does makes sense for certain kinds of apps to be free, such as those that allow a customer to interact with your business in ways that eventually result in a sale. But for stand-alone non-game apps without a store or back-end business attached, totally free makes no sense at all either from a business standpoint or for customers.
Proponents of free usually make one of the following appeals:
- A free or “lite” version of an app lets people get a taste that will convince them to buy the “full” or “premium” version. This is quite often wishful thinking. People either discover that the app doesn’t really fit them, they’re irritated because so much of the functionality is disabled in the lite version, or they just simply don’t like it. In all of these cases, they don’t make a purchase.
- A free app can make money with in-app advertising. More wishful thinking, unless you can get your app in the hands of several million people. When I talk with developers both large and small about in-app advertising, they are universally disappointed.
- We will make money with in-app purchases. e.g. buying new content, in-game currency, power-ups, new levels, special weapons or ammo, etc. For games this is definitely true, and the stats bear it out. A company like Zynga gets great valuations because of their in-app revenue streams. So for games, free definitely works, but it doesn’t extend to other categories.
But here’s the real problem with free, or even $0.99 software (and I am paraphrasing the sentiments of John Acuff here, with some added emphasis):
If you teach people not to value something from the beginning they never will. If you start with a price tag of $0.00, it’s difficult to eventually charge money because when you tell someone your thing costs zero, they interpret it as worth zero. It becomes difficult, even for a fan, to suddenly see monetary value in something initially valued at nothing.
So with that in mind, here are 5 reasons you should charge for your app, particularly if it isn’t a game:
- It cost you something to produce it. You either paid a designer and developer, or you did it all yourself, but either way, you have an investment to recoup.
- It cost you something to market it. If your app is going to be successful, you must get the word out. Again, you will either pay others to do this, do it yourself, or do it with help. Either way your cost is non-zero.
- It costs you something to support it. No software is free of defects. If you want to avoid the dreaded one-star ratings and scathing App Store reviews, you will need to provide excellent customer support and fix the bugs over the life of the app. This is not free either.
- It delivers value. If your app helps people solve a problem or do something better, it has value, and you should be paid for that value. You should be paid for doing all of the hard development and marketing work it took to get the app into their hands, and the value you brought them.
- “Free” or even “near-free” sends the wrong message. If we train people to value software like a throwaway paper cup, in time we are not going to have good software to choose from. High schoolers and 20-somethings who make free apps while living at home with momma are generally not the ones writing the software that you use and value. The people writing the apps that you rely on and truly enjoy are supporting themselves and their families. They are pouring their blood, sweat, and tears into making great products that help others, and if they can’t make a living doing it, they are going to move on to something else.
Good software delivers real value, and real value is worth more than zero. Would you agree?