Why Discounting Your App Is a Terrible Idea

If you’ve been developing and selling apps for any amount of time, you might be tempted to discount the price. If you’re good at marketing your app, you can make a lot of money very quickly running a compelling discount.

Recently, I discounted Teleprompter Premium as a ‘thank you’ to my loyal customers for being the first to buy version 2.1. In simple terms; I published an update and ran a 48-hour sale.

The revenue was excellent… The sale lasted just 48-hours, but generated the same amount of revenue that would normally come from a full week of sales (specifically, $2,372 in two days).

But… They’re all the wrong customers

When somebody buys Teleprompter Premium for full price, it’s usually because of one of these reasons:

  1. Their job is speaking, acting or singing. Teleprompter Premium helps them do it better
  2. Teleprompter Premium solves a specific problem that going to save time or money
  3. Teleprompter Premium is a better, more affordable alternative to expensive hardware solutions.

When you run a discount or a sale, you’re motivating customers to buy for the wrong reason. For example, Teleprompter Premium usually sells for $9.99, and my launch offer reduced the price to $7.99, a discount of $2.

Suddenly, everybody who is now motivated to buy Teleprompter Premium (who were not previously compelled to do so) has been motivated by the chance to save $2.

So why is the $2 incentive a bad thing? Take a moment to consider why the customer didn’t purchase in the first place. Here’s my list of a few reasons:

  1. They don’t understand the product
  2. They can’t identify how the product will be valuable to them
  3. They have an alternative solution

When somebody buys Teleprompter Premium only because it’s $2 cheaper, it means they’re still suffering from reasons 1, 2 or 3 as to why they didn’t just purchase it in the first place. Now I have customers that don’t understand or can’t see the value in my product.

Overnight I had hundreds of support questions, several angry customers and a bunch of bad reviews on the App Store.

Why would this happen? Is Teleprompter Premium a bad product? No.

Every single support ticket, every angry email and every bad review came from customers who didn’t understand the product.

Here’s the first App Store review that appeared after launching the update:

Very Misleading… Refund Requested
Is ZERO STARS possible??? I had purchased the previous version of this app and it was great. Unfortunately, this new version is very misleading and dishonest, in my opinion. Instead of giving you an “upgraded” / enhanced version of the previous program, it’s been replaced with a simple text editor without any ability to record or save video. What’s the purpose of that??? This completely defeats the intended purpose that the previous app version provided. Seriously, the previous version allowed you to edit your script and then record the video, as the script scrolled along on the screen. Now, it just focuses upon being a simple text editor that scrolls on the screen — and that’s it! Of course, it tells you that you can supposedly get the video portion for free — until you discover that “free” costs $4.99. Hmm… Instead, they allow you to download a “lite” version of the program and not the full version, even though you just paid money to get the supposed “full” version. Ugh, I’m very frustrated, as I had solid hopes that this could be a very useful upgrade. I feel like I’ve been tricked. A refund has been requested.

This is an excellent example of a customer completely misunderstanding the product, in fact the review seems to suggest that “DustyAZ” doesn’t even understand the idea of a Teleprompter. This customer completely confused Teleprompter Premium with a similar but separate video-recording app that I make, and decided to post a bad review.

Here’s the worst of the many emails I received from angry customers (I’ve censored it):

Eat a massive c*ck you dirty c*nt!!!

That was all that the email said.

I’ve had to refund a handful of customers, send hundreds of support replies and deal with an influx of bad reviews. It wasn’t worth the 550% increase in revenue.