Our software is ready but how much do you charge?

Hi everyone

We recently launched software online - its an automated system much like tubeincreaser and tube toolbox. I have been experimenting with pricing and the results are still confusing. We are getting up to 600 uniques a day and the software is selling for $7.95 (one month license) up to $29.95(lifetime license). Compared to the competitors it is cheaper but our conversion rate is below 0.1%. I have been thinking about dropping the cheap options and increasing the price to say, $47 (I see this amount pop up all over the net). Is there a psychological factor at play here? Higher price means better quality product perception? Any pointers will help a lot.

Thanks guys

Yeah, as you say there is a psychological factor here, something with the number 7. Try raising the price of the lifetime license to 47/57/67 USD. Also the conversion rate seems low, try split testing your sales pages/letters. You could give away licenses to a few members to gain some feedback because reviews are the things that make your business or kill it.

Thanks for the input. I will put it to the test. Is there a safe way to make our product available to members without looking like a spammer? Sorry if I sound ignorant, I am new here and don't want to get banned

I definitely agree with the psychological 7 factor. As well when you price to low you devalue your product or service. Its important to price it competitively but not cheaply. That will create a sense to the customer that your service is cheap but not of any real value. Also i'm not sure what you copy looks like, but insure its as straight forward as possible. Positive reviews in this forum would give your business a boost, just make sure you give them to people who are actually active on the forum.

For the single developer, it is probably next to impossible to determine the perfect price; companies that have the resources, run their marketing research in order to find out what pricing level maximizes their profit, but for a single developer, this is more of an educated guess

I would say that anything below $10 is too low - what if your software is great success and sells in the thousands, even if it is extremely easy to use and comes with fantastic help file, you would still have to spend time on providing support, answering questions, moving licences, etc.

If you are getting qualified traffic then you definetly need to look at conversion rate closely.

Pricing can be a factor in that and believe it or not increasing prices can actually increase conversion positively in my experience as it adds more value to the product in a sense.

But with a conversion rate that low I doubt that is your primary issue.

Thanks everyone for the input.

I have decided to put the following to the test :

1) New website (Less JPEGS, more written content and Tutorials/case study on how to use the software)
2) Price increased and more similar to the competition. I have settled on $47.95.

Ho Kwon Ping, a successful entrepreneur in asia, mentioned the other day in an interview that to push your price below the competitors is to be like a hamster on a treadmill. You will always be running and not get anywhere. There will ALWAYS be someone cheaper. And it will always be relative to what the other guy prices his software for. He believes the only way to become truly successful in your venture is to own a proprietary advantage which is either technological or brand driven. In our case this will be a mixture of the two. We (a 2 man team) really studied our competitors and developed our user interface and design to make it easy even for the most inexperienced users. We also complement this with super support - we fix bugs and answer questions as quickly as possible. So I based our new approach solely on the small video clip I saw on TV the other day