I release my Scrabble word checker CheckWord about a month ago, for free, on the iTune App Store.  I later released a significant update, which added a lot of new features – specifically word generation and annagrams.  I kept this free, even though I’d put a lot of work into it, and several people told me they would pay for it – one guy even set me $10.

A week ago, I started to get daily “sales” figures, and saw that I was selling (at $0.00) around 2,000 copies a day.  Meaning 2000 people EVERY DAY were finding my app interesting enough to download.  I wondered how many of those would actually pay 99 cents for it.    Given the vast numbers of people who seemingly would pay 99 cents for a units converter, I figured maybe quite a few.   So I decided to experiment and see what would happen if I increased the price to 99 cents.  I could always put it back later.

So I made the change in the evening of August 4th, and I’m not sure how long it too to filter through to the app store.  But in the morning the change was made.  I’d also got my first feedback in the form of a new review that said:

was free, now costs $$, super dumb
by k)smith

I hate devs that relase an app for free, then once it becomes slightly popular they start charging for it.  If you wanted to make money off it, charge for it in the first place idiots

Hmm, not quite what I was hoping for.  Still, interesting reaction.  It annoyed me at first, but then I though that hey – that’s just one out of a few people who would have downloaded it for free.  So k)smith is annoyed it’s not free any more – but what proportion of my my audience does he represent.

I then noticed something else interesting.   I was at position #30 in the “Top Paid Apps”, right up there with Scrabble at #27.  Now I’m assuming this is because it ranks you based on your number of “sales”, regardless of if they were at $0.99 or $0.00.  When I changed the price, I got my previous 30,000 (estimated) free “sales” as part of my ranking for paid sales.  This is a bit misleading, and quite possibly something Apple will change.  But it means I’ll be in the top 100 paid apps for several weeks if I keep the price there.

So now I wait, and see how much money I make in a day.  If it drops down to ten copies or so, then I’ll probably make it free again.  If it’s $100 a day, then I’ll probably keep charging for it, at least until demand dries up.  Economics.  Maybe I’ll make enough to cover the cost of my Mac Mini and spare iPhone, and enough to justify keep making improvements to CheckWord, and to release other utilities.

This actually does not seem like a terrible marketing strategy.  You release an app for free, so thousands of people download it.  They give it good reviews, and you get lots of word-of-mouth.   When you’ve got sufficient momentum, you up the price as much as the market will bear.   This is rather a novel scheme as it relies on having zero distribution costs, something that really only came about with the advent of the Apple App Store.

I suspect this “Introductory free pricing” scheme is show up more and more.

But now I’ve got to wait and see what “the market” for Scrabble word checkers thinks about my $0.99.

Day 1 (8/5/2008):

Sold 98 copies.  That’s $68.60, probably in a bit less than 24 hours, as a few sales were reported at $0.00.  If that keeps up, it’s $25,000 a year.  Okay, seems like it’s worth letting this experiment continue!  The first day might be an anomaly, so let’s see how it pans out over the course of the week.

The breakdown was:

US – 65
UK – 18
Canada – 9
Australia – 3
Korea – 2
New Zealand – 1

Another change was I dropped from #30 to #39 on the “Top Paid Apps” list.  Perhaps that’s a rolling average of the last seven days or so.  Scrabble is now at #30.  I’ve also got a few more reviews, so criticizing my move to $0.99, and some defending it.  Luckily these reviews don’t actually show up at the top of the list, as it defaults to “most helpful”.

Day 2 (8/6)

Sold 75 copies, down quite a bit, but still worth keeping up there.   Let’s give this a week, and see what the actual trend it.  First two days may have unusual variance.

Day 3 (8/7)

58 – Down more, not looking too good.

Day 4 (8/8) Friday

61 – Up a bit, maybe it’s stabilized.  Heck if I sell 60 a day,then that’s still, erm, 60*.70*365 = $15,330 a year.  See how it does over the weekend – maybe all those weekend Scrabble players will give it a boost.  I’ve now dropped off the top 100 paid apps, which is as it should be.

Day 5 (8/9) Saturday

56

Day 6 (8/10) Sunday

67

Week 1 (8/4 to 8/10)

US 286, UK 64, Canada 29, Australia 18, Rest of World: 31

Total for week = 428, average of 61 per day.  And that’s with about a day as a free app.

So, what I decided to do was put out a free version of CheckWord that just has the Scrabble word checking function in there.   The full version will remain at $0.99, and hopefully enough people will continue to download the free version, and a portion of them will upgrade to the full version with word generation, anagrams and pattern matching.

The free version is now in the app store, so we’ll see how that works out.