INITIAL PRICING
When we first started selling Mobile Apps, we had no idea what to do for pricing. We looked around and decided on $ 1500/design, build and publish plus $ 100/mo and then we went to work. On our 2nd sales appointment, we made our 1st sale to a Company that gleefully jumped at the price and even purchased a website for an additional $ 3000.
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Our next four deals went the same way $ 1500 down, $ 100/mo for a Pizza place, Mexican Restaurant, Tattoo Parlor, and a Bar & Grille. Our next Restaurant paid us $ 1500 down, $ 500 trade, and $ 100/mo. By taking $ 500 in trade, the restaurant provided us with two $ 250 Gift Cards. One went to the sales rep and I took the other.
TRADE DOLLARS
Trade dollars can be a clever way for your customer to hold onto more of their cash while you gain a sale and the flexibility of using their services yourself or as a giveaway to family, friends, business associates, or another business owner in an attempt to close a separate sale. Imagine saying…” In an effort to gain your business while I am out here with you today, we will take $ 250 off of the regular price and give you a $ 100 Gift Card to XYX Restaurant”.
Powerful stuff! I LOVE TRADE!!! Just imagine having business customers all over town and having hundreds or thousands of dollars to spend on furniture, restaurants, bars, tattoos, or any other type of service you might be interested in. Imagine not having to buy gifts and presents because you can simply give Gift Cards that you have gotten from local businesses around town!
PRICING TIERS
Here is how we set it up
For Profit Business $ 1500/down $ 100/mo
Not For Profit Business $ 1250/down $ 75/mo
Individual $ 1000/down $ 60/mo
Setting things up like this allows us to get an agreement on a monthly payment and then negotiate the down payment or confirm the down payment and then have negotiation points for the monthly payment.
Customer: IT’S TOO MUCH MONEY!!!
Sales Rep: Which part is too much?? Is it the down payment, or is it the monthly fee??
Customer: IT’S THE DOWN PAYMENT
Sales Rep: So the $ 100/mo is fine
Customer: YEP
Sales Rep: Well if I could show you a way to make the down payment more affordable, can I earn your business while I’m here with you this afternoon??
Customer: Well what did you have in mind??
Sales Rep: Normally we take a check for $ 750/$ 625/$ 500 down and the second check for
$ 750/$ 625/$ 500 upon App-build completion. We start charging the monthly fee once the App goes LIVE with Apple.
Sales Rep 1st Close: We take credit cards, visa, m/c, amex, disc, and we can put $ 750 on one today and a different one when the App is done in 5 to 15 days. Can we earn your business? Is that fair enough?
Customer: If YES, start signing them up…if NO, continue closing
Sales Rep 2nd Close: Well, tell me this…If you can’t afford to write a check for $ 750/$ 625/$ 500 down today and $ 750/$ 625/$ 500 in 5 to 15 days upon completion, what can you afford to do??
Customer: $ 500 or $ 300 or $ 250 (is usually what we hear)
FLEXIBILITY (1)
The best part of our pricing structure: Since we are already running the business credit card each month, it allows us to break up the down payment.
Examples of what we have done: $ 300/down, $ 300/at publishing, $ 400/mo for three months, and then $ 100/mo indefinitely. This is a customer who said, it was too much money.
Well, we got every dime, we just broke it up. What they were really saying is not that the app costs too much but that the down payment was too much today!
Slow down, listen, take your time, and understand what your potential customer is saying before you give them a solution to their problem.
FLEXIBILITY (2)
We have a Roller Skating Facility that really wanted an app but wouldn’t pull the trigger on the $ 1500/down part of our pricing. Our sales rep met with the owner no less than four times and couldn’t wrap it up at the regular price. On the fifth visit, the sales rep offered a deal that the owner couldn’t refuse. $ 500/down $ 200/mo for ten months and then it drops back to $ 100/mo. The issue was that the owner had a monthly rent payment of $ 24,000. So he has plenty of money, he is just paying out at a fast enough rate that our offering a flexible path to App Ownership was all that it took to close the deal.
OUR LEAST EXPENSIVE APP
The least expensive App that we have sold was our second tattoo parlor which got the deal of the century at $ 500 down and $ 60/mo.
SALES PRICING
Many industries have special sales pricing available at certain times of year and we all have the same opportunity. We have offered to price of $ 650/down and $ 75/mo and discovered new industries along the way. Electronic cigarette stores have been one of our target markets during the holiday season.
Final Thoughts
If I could start this business all over again, we would have been much more flexible with our pricing. We made many, many, many presentations without budging on price only to lose the opportunity to have that customer paying us on a monthly basis.
A second thing that I would do differently is to do more apps for FREE or giveaway pricing. It seems like it took us forever to get to our 10th and 20th sales. If we could do it again, I would have given away 10 Apps in the first month of business.
Even at $ 75/mo, it would mean $ 750/mo coming in all while we were still learning and it would have also pushed our learning curve ahead by six months!
