Are the basics of marketing being applied to the app business?

Some of you may know already I spent 11 years working, mostly at marketing positions, at Microsoft. Although the topic is not my passion, I can say I have learned a “thing or two” there. Disclaimer made, the answer for this topic’s question is “for the majority of publishers, the answer is NO”!

Marketing 101

A quick search at Wikipedia will tell you that marketing is the process of communicating the value of a product or service to customers, for the purpose of selling/promote the product or service. The marketing geniuses agree on the basic principle that 4 “Ps” are the key concept for marketing anything (mobile apps included). The Ps are product, price, point of sale or place and promotion. If one of the “Ps” is a weak link, chances are your efforts will not succeed.

Lets learn a bit about them (I am leaving the P of price for last, purposefully):

1) P of Product:

This is the most basic one. In order to marketing anything, there must be a “thing”. This thing, called product, can be a hard or soft good (a blu-ray disc or a downloadable song), as well as a service (carpet cleaning, for example). In our scenario, the product is your app.

A product should be created based on a known or unknown need. For example, a faster car is the answer to the “known reason” of people willing to cross distances in a faster way, after all, everybody knows what a car is. Developing a new video game console, controlled by gestures instead a physical joystick, may be an “unknown yet” need for people who cannot handle multiple buttons (myself included :)). Same applies for storybook or game stories: “cinderella” is known, “traveling to middle pole”, an original story, is the unknown. Contrary to many people may think, addressing a known issue may not necessarily be better than bringing into market a product covering a “new/not yet perceived” need.

A product is also differentiated by its quality. Although this may be simple to explain using a “hard good” as example (which may use better component materials if compared with a similar product), things get a bit more difficult when we talk about apps, specially the ones made by one or two people. What I am trying to say is, a small team may think they have a great quality when, in reality the don’t. At your eyes and ears, your drawings are perfect and the narration you did without any professional equipment sounds flawless. Reality may tell you “are not that great”.

In sum, make sure you have a great product before going to the next “Ps”. How do you do that? Ask your friends, show your apps to others, ask for honest feedback (don’t be mad/sad if others think you are not there yet). Test before put your app for sale.

2) P of Place or Point of Sale:

Assuming your product is good enough, you need to plan where you to sell it. The more places you have it for sale, more chances to sell. Some may say that having a product in 10 stores but hidden at the back of the counter is worse than having it just in one store but in the main shelf. This is true but our intention here is to have the four Ps working at our favor. In this example, you will need to work with the following 2 Ps to increase your presence at the ten, not so good, stores.

You may think the place is not important in the “app world” because the only places your app can be are the Apple, Google, Amazon and B&N stores. However, this is not necessarily true. Think those stores as the “physical ones” in the real world. Again, your goal is to have “all places” selling and promoting your app.

Your website, your Facebook page and your tweets can act as places for sale (re-directing to the main store) and promotion (more on that in the next “P”). Again, the rule of thumb here is to be found (and ready to be purchased) in as many places as possible.

3) P of Promotion:

Unfortunately this is the least used marketing tool from publishers, mostly because they think promotion is only related to price. In fact, it is much more than that.

Promotion is the ability to understand your market, your customer and act accordingly, reviewing price, improving advertisement and/or creating new products that solve their needs. In sum, it is about to share information about your offer but, at the same time, getting information on what customers need and think about your product.

In order to capture info from your audience, your product should be available to users, not only on your website but also in external blogs, reviewers sites, ads, etc.

So, you may ask, what is the difference between a place and a promotional site? A place is a site that tries to sell your product. A promotional site is a place where you talk and listen back about your product. The end goal is still to sell but the primary aim is to get direct or indirect feedback about what you are selling.

A direct feedback can be a review that rates the best and the worse of your app. An indirect feedback can be the demographic (from where the readers are coming to check your product) of the users. Both feedback are important. While the first helps you to improve your product, the second helps you to test a new price point or a specific promotion in the country bringing more people to your project.

As I mentioned above, demographics is just a way to promote. Others include:

  • special occasions:
    • Is your app about Christmas? Maybe you should do something different to promote it better at December time, right?
    • Do you sell educational titles? Maybe a “back to school” promo in July/August in the North Hemisphere or December/January in the South makes more sense;
  • closing timeframes:
    • Some big company have closing quarters (meaning they have metrics for each quarter of the year). If the last month of the quarter is still far to make the target goals, they change prices and/or offer more benefits to increase sales in that particular timeframe;
    • Depending on what you sell, this may be a riskier strategy as your customers may get used with you coming to them with better price/promo in the last month of each quarter. In this scenario, they may decide to buy from you only with discounted prices, instead of paying your regular price – use this tool with caution!

4) P of Price:

Then, lets talk about price. As I said before, it is a common sense that price is the most important “P” (sometimes more than the product itself). We know some companies try to win markets based on pricing only. Some win with “the cheaper the price against the competition, more customers will buy” strategy, while others win with “the more expensive the price, only the correct customers will buy”. Think about Papermate pens versus Mont Blanc. Both offers pens but to different audiences. Same applies to Apple against “gray market” PC machines.

The secret here is to sell the value of your product. While price is simply the amount of money you spend to buy something, value is about the experience you have from the moment you see, acquire and use your product. Think about drinking coffee from a local shop and compare it against drinking coffee at Starbucks. When you buy local, you are paying only for the coffee. At Starbucks you are paying the coffee, the wi-fi and the cool environment.

Fact is, people who shop by price only will hardly understand the concept of value. Again, if you think the value of your product is just price related, go for it. However, the more value you create, best chances people will pay more for it and be happier with their purchase. What I am trying to say is, DO NOT set the price of your work for $0.99 just because “people prefer to pay less”. Do you have a great app (product), backed up by reviews and ratings (promotion), ready for sale at the major app stores (place), set the proper value of it (starting with the correct price).

Can you show me a real example?

Yesterday I was talking with my good friend Leonardo Amora. His first app Monsters vs Robots (product) has great quality (from story to illustration to professional audio), is available in several stores (places) and started to receive prices and requests for review from several sites (promotion), even being launched just 2 weeks ago.

His strategy was to set the initial price to $1.99 (due the common sense that says people prefer to pay less). After a week, he dropped the price to $0.99 (mostly because the sales were not high as expected, and he was still in a learning process about pricing). Clearly, at least in my personal opinion, a wrong strategy for a good product. While talking to me, we decided to check the App Store (we used the Brazilian one as he has working more at his home country). Check what we found:

amora

His app is the first one shown in the New section of Apple’s App Store, which is always good but, the most amazing finding was reading the “Populares” (Essentials in the international store). With the exception of a few free (“gratis”) ones (mostly backed up by in-app purchase), just one was priced at $0.99. All other ones, including the Kwik made Tobi, were priced over $2.99!

I told him that he is driving market bad behavior with a “price only” strategy. In a (essential) market full of more expensive storybooks, having his app at $0.99 sends the wrong message to potential customers that his app is not a par of his competitors. So, if you are a buyer you may not check his app because you are already well aware that most $0.99 storybook are really badly done!

To check my thesis, we compared the sales between the first week of sales (at $1.99) against the current week (at $0.99). The results? With less promotion, the first week sold more than the current one. Again, this is not a game of price! People who did not purchase his app at $1.99 probably did not purchased either at $0.99. These type of customer is the one who complained about paying $10 on a singer cd ( “it is too expensive and i just liked 1 or 2 songs”) but never paid for the single, at $0.99!

Smart as he is, Leonardo “got the idea” and hopefully you will get it too.

The only way to drive the correct market behavior is show people that creating a good game, storybook or any kind of app requires knowledge, time, resources and money and all these things costs. Good content will shut bad content only when a clearly distinction is made (by setting the right price, having the right reviews and so on).

To finish, lets make very clear that this post is NOT to tell you to price your apps higher. Instead, it is about to evaluate all pieces of the puzzle. Make sure you have a great product, ready to be purchased, targeting the correct audience and with a compatible price for all the value it offers. The beauty of the promotions is to enable you to play with different prices at different stores, seasons of the year and so on. Do not miss your goals getting blind only with price point!  

As always, I am looking forward to your feedback!

5 comments

  • Excellent article. Clear, concise, and addresses that pesky issue of audience training. Even the big boys are still working at getting app pricing and marketing right. Bought a $10 app from a big name and it was only an audio book!!!!! NO page images at all. Even worse it kept crashing. It wasn’t even worth “free”. Yet it has thousands of downloads. Unhappy downloads, but …. Likewise I bought a game on the advice of a friend, for 99 cents. It is clearly worth far more than that with great graphics, humorous characters and just the right sound tracks. Yet it had only a handful of downloads.

    The difference in download numbers wasn’t the price, or the quality, it was the marketing.

  • Great article Alex thanks!
    This is an area that I’m still getting my head around too (like a lot of us that are using Kwik).
    With my latest app ‘Monkey Spot the Difference’ I almost did the same as Leonardo and dropped my price. Since my sales/downloads weren’t as good as my first app ‘TicTacToe Monkey’ (I shouldn’t have expected it though since the first one is free haha).
    Anyway, I’ve left it at the $1.99 price and am adding ‘value’, coming very soon! By listening to friends and customers and yourself, I’m adding more games and have made it more friendly for kids by having each game celebrate and tell you when you have found all the differences.
    Anyway, great information and I glad I’m heading in the right direction with this.
    Thanks

  • 1. Are there any data that show what percentage of sales of any given app are linked to a well developed presence on FaceBook, a good website (including good SEO practices), and/or Twitter? I’ve made the conscience decision to delimit my apps to the iOS platform because of the hassles of dealing with multiple devices under Android. Hence, my “Place” is the Apple store. So can social media channels really drive sales?

    2. Do you know of any data on the sale of games for the iPhone/iPod Touch vs iPad? Apple’s decision to make the iPad’s display a 4:3 aspect ratio and the latest iPhones a 16:9 aspect ratio really kills the whole idea of a truly “Universal” app.

    • Jerry,

      In the past institutes like Gartner and Forrester dominated the research area. As the mobile environment is bigger now, several small companies are doing researches like that. I strongly suggest you to spend a few hours searching/reading several links you will find. Also, check Appcelerator’s website. They have a nice research on devices, OS and usage.

      Regarding presence only on the AppStore, I would suggest you to review your strategy. Although social media may not make you rich, it is common sense to have at least a FB page for your app. This is the place where reviewers and press will point their users to learn more about your app. Using just the app page at the App Store is not enough. Also, check for some books on social media for some ideas.

      Lastly, games usually sells more on the iPhone and storybooks on the iPad. Some of the data you will find will corroborate my answer. Some reasons for that include: usually casual gamers will play while waiting in lines, etc. The phone is on their pockets and they can buy/play just with one hand. Storybooks (and themed apps) require more attention during reading and the larger screens facilitate that.

  • Thanks Alex, especially for the Appcelerator suggestion. I’m still not convinced about Android, but on the other hand my apps have been very “iPad-centric” But since I’m starting to build games, I’ll look into Android much more seriously.

    Thanks again!

    Jerry

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