How I unlocked $750/month of revenue from my app with a single decision

A post for those who care about how apps are priced, and how people behave when faced with choice…

TL;DR: I changed from free “pay what you want” to $3,99+ and earnings have drastically stabilised.

When I launched Thought Train, it was wildly successful (in the context of Indie apps), earning

What I found, however, is that in the long tail stages of its career (after all the hype of being Product Hunt App of the Day), the earning graph varied wildly from day to day, some days making up to $40? but most days making a meagre $4 ?.

When it comes to maintaining an app or any digital product, what you need above the high peaks is a consistent stream of income, this helps you plan your development cycles, especially when you’re not the primary developer.

Add to this, when your app does not generate MRR, every customer you acquire is brand new, in essence every day starts at $0.

So what’d I do?

Well, I decided it was time to revisit pricing, which is risky considering all of the marketing I’d don up to this point was based on the app being “free but pay what you want”.

So, before I made any drastic changes, I needed to ascertain three things:

1. Was my traffic primarily still referrals (where users would read that the app is “free”)?
2. Is there any upside to keeping it free (and having more users to market to later)?
3. How much would users actually be willing to pay (if not free, what is the actual price point)?

Traffic Source:

It wasn’t difficult to get on top of this. Thanks to the strong back-linking of Lifehacker, Product Hunt, and an ad placement on my own high volume site Songg, I had generated good enough SEO to rank highly for any search relating to Thought Train or Sticky note apps.

In fact, 90% of my traffic is organic, arriving from people searching “Thought Train mac app”. This is important, it means that I have brand equity, strong search presence, and the most important part to me… users don’t have a preconception of what Thought Train will cost.

Keeping it free and monetizing later

To be honest, this was a very brief thought, because I knew it’s unlike me to use this methodology. I was just honest with myself and ruled this one out.

I have 10k users now and I haven’t managed to monetize them beyond any initial contribution.

Onto deciding what to actually charge…

Pricing structure:

I didn’t want to shoot myself in the foot here, as I said I knew that changing the price from $0 to a set price had the potential to get some backlash.

I had hard data on this via the order history of 10k users though, which is helpful right? So let’s look at the numbers:

1. 10% of all site visitors downloaded the app.
2. 12% of all downloads paid for the app
3. Users paid an average of $2,90 for the app, with the 2nd most common number being around the $5 range (I had some people pay up to $25!)

With this in mind I figured I’d start in the middle and work my way up and down the spectrum. I started with $2,99 for the first day, and…

Lo-and-behold I mad two sales!

This was interesting, so I played a bit more over the next few days, and these were my results:

• $4,99 only got 2 sales / day
• $1,99 got ~2 sales / day
• $2,99 got 6 sales / day
• $3,79 got 4 sales / day
• $3,99 got 6 sales / day

I settled on $3,99, but I decided to add some extra options for those users who feel extra generous, this keeps with the spirit of “pay what you want” just that there’s no free option.

Some users still pay more for the app than the base price.

Conclusion

Great Marc, what does this mean? It means that sales have stabilised to ~$20/day which doesn’t sound like a lot, but when you add it together it means I’ve unlocked $750 of revenue per month from the exact same product I’ve had live for 5 months but with no real extra effort.

I’m super happy about this, it really just means that I can spend more on advertising and development. With an awesome new design and some incredible feature requests on their way, the app has a bright future. My aim is to unlock another 100% revenue and get the app to $2,000/mo by December.

Questions

I’d love to hear from other developers about your method of pricing and how you formulated your decisions. Hit me up in DM and let’s chat.