A couple of weeks back I put out a tweet requesting people to jump on a phone call with me and explain their thoughts and opinions around the pricing of our app. By the end of the week, I had spoken one on one with more than 80 people who enthusiastically shared their views and gave me an insight into their thoughts.
After canvassing all the perspectives, I felt it is necessary to explain how we used those insights to craft our pricing strategy and answer some of the frequently asked questions that people had.
Let me start with explaining Envision’s pricing structure which consists of three main elements: a free trial, a reasonable subscription plan and on option for one-time purchase:
The app comes with a free 14-day trial where users can experience all the features of the app. There will be no strings attached to this trial period, meaning there is no need to provide payment details upfront and no automatic start of subscription.
We believe this important as every user must know exactly what they will be paying for before they make the decision about it without any deception or confusion.
At the end of the free trial, all the functions of the app simply become inactive and users will be free to choose from a monthly or an annual subscription plan. They are currently priced $2 per month and $20 for a year.
We decided to implement subscriptions as it lowers the entry barrier for a lot of users without having to make a large investment upfront. This also provides users with the power to hold us accountable, as we will have to consistently work hard to improve and update the app in order to retain the subscribers. If you ever see the service declining, you have all the right to pull the plug that will hurt us.
3. One-time payment
The app also has an option to outright purchase the app by making a one-time payment. We call this ‘Lifetime Subscription’.
We mainly introduced this option as some users mentioned their eligibility for subsidy and reimbursements against one-time payment for services. We are currently pricing this at $100.
Overall, we believe this structure to be the most transparent and clear way to charge for our services. One problem with this is that since our app is constantly evolving and improving, there is no way for users who exhaust their free trial to come back and try new features later on. We are working on ways to mend that and will be open to ideas about it. Now to answer some of the frequently asked questions:
Why can’t this app be free?
We have costs to meet. We run our software on servers and use other software to design and build the app, which comes at a cost. We have a team of people who work every day to build new features, fix user issues, take feedback and build partnerships. We have to pay accountants and lawyers to help us run the administration behind this whole show. Not to mention the 30% cut that Apple and Google take from every purchase. On top of it all, we have to make a profit reasonable enough to sustain and grow our business.
Why can’t you run ads?
We want to create a service that is focused on improving the experience for the user. If we start running ads, sooner or later, we will have to start optimising our app towards incentivising advertisers than the users. We want to be a service that is only incentivised towards improving our users and that is only possible if our revenue is directly linked to the user’s experience.
Why can’t you find other sources for revenue like organisations, corporates, charities, etc.?
Same reason as above. We are eager to work with them to spread awareness and distribute our services to more users in need, but not as a replacement for our revenue source.
What about free apps from the Big Corporates?
Yes, there are giant corporations out there who can afford to work at a loss and offer services for free, in return for intangible gains, such as press coverage and general goodwill. However, that too is not sustainable in the long-term if they can’t figure out a way to make revenue or mine data from such services. Even then, there is no guarantee that these apps will stay around because this is not their primary bread and butter. You will actually be surprised how many and how frequently such apps and services get shut down without due notice. Here is one such list.
I hope this provides you with more insights into our perspective of why and how we made the decisions regarding pricing for the app. We fully understand that we can never come up with a model that will satisfy everyone, but we believe this has been our best effort to maintain a balance between affordability for our users and sustainability for our business.
We are always open and eager to listen to your thoughts on this and learn from it. I will continue to update this blog with more questions and answers as needed. Thank you for your time.
Karthik from Envision