Interesting take, thanks for your thoughts on this. Though I'm afraid a couple of these ideas are simply impossible due to the nature of App Store.
live2work said:
I wonder if you are trying to address the wrong audience. Instead of trying to expand the market against "free" apps, I think you can do a better job in trying to address the market at the high-end. There are companies out there that sell chinese dictionary stand-alone products that sell for hundreds of dollars. I was actually considering one of them, but I find their functionalities limited. Having a platform like the iphone or itouch is a great advantage for you. I am seriously considering buying an itouch for my children just because of the learning tools available. If I were you, I would focus less marketing on a consumer base that is reluctant to pay vs. a consumer base that is willing to pay. This would require some additional business risks, but it may have better rewards. Do NOT rely on Apple to do the promotions for you, find other mechanisms to do it, e.g. google ads, etc.
From what I can tell, those standalone dictionaries rely largely on having a retail store presence, which isn't really an option for us. We actually ran Google ads for a long time but the conversion rate never justified the cost - the number of people who are curious enough to click is way out of sync with the number who'd ever consider paying what we charge. And that was on Palm/WM - on iPhone we don't even have any way to track ad conversions so as to make sure we're putting our AdWords budget to good use, we'd just be blindly hoping that the clicks we generated actually turned into sales.
Really I can't imagine a better promotional tool for a paid Chinese dictionary app than a free one - it's perfectly targeted, we're going after people who already a) own an iPhone/iPod/iPad and b) are interested in a Chinese dictionary and we're showcasing ours to them, the cost per download on our side is essentially zero, and we'd need to have a free version of our app in App Store in any case since that's the closest that Apple lets anyone come to a "demo version."
live2work said:
Instead of selling software, sell solutions. Become an Apple product distributor. I don't know what it takes to become one, but you can position it like this. Sell a full loaded iTouch with bundled dictionary for the same prices as other are selling iTouches, and make profits on the iTouch sell. I have not worked out the cost models, but I am sure that you can think about it.
Not really allowed - iPhone software sales have to be tied to a particular iTunes account, there's no mechanism by which we can "preload" a copy of Pleco on a new iPod without doing an end-run around Apple's distribution system (which is liable to get our app speedily banned); I suppose we could go "full rogue" and start selling Pleco only on jailbroken iPod Touches that we sold directly, but that doesn't seem like a very good long-term strategy. We have been considering something like this for our upcoming Android software, though - could even commission a custom Pleco-branded piece of hardware on that.
live2work said:
Get into the Chinese courses. Hire a few students to generate supplementary packages for the more popular chinese course, and resell them for a few bucks. The issues I see with some of these general dictionaries are that they require a lot of user set up. e.g. entering flash cards, create lessons from text books etc. Get involved with some of the professors to sponsor your lessons. It only takes a few before it becomes a "standard"
We've been doing some of that, though we could stand to be a little more aggressive about it - it's tough because everyone wants a cut and we're already paying Apple 30%. (again, could be easier on Android assuming Verizon doesn't join AT&T in banning non-Market apps)
live2work said:
Commit to improve the products. The problems with the standalone dictionaries are the fact that they are not expandable. Continue to add value for your existing customer to keep them and help spread the news. The beauty of software is that you allow Apple to improve the hardware every generation, and you give freebie product improvements, and once a while, you come up with a new revision to allow users to "upgrade".
Oh we're very big on that strategy - we've added a ton of new features / functionality through free upgrades since the original release, and only one (flashcards) as a paid one, though OCR (and some more new dictionaries) will be paid upgrades as well.
live2work said:
Your pricing strategy is also distasteful. Too many ala carte selections. I looked at that, and I am completely turned off. Most people want a comprehesive solution. They do not want to be nickeled and dime to death. Buying by features??? Are you kidding me??? I want a fully functional dictionary right from the get go. Maybe I won't need a feature, but I don't want to paying each time I change my mind. You are selling a solution. A full solutions. Who buys a car by buying the tires, then wheels, then engine, then steering wheel??? Paying customers want some that is full and comprehensive right off the bat. If somebody is buying ala carte to save $10, then that should not be your target market. Your target market is someone who is willing to sell out $30-$50 without thinking twice. I think you can lower your price. I am sure that the elasticity in the demand model. I think a comfortable price point is $19.95 for an app. I say this because you are not developing the hardware, just software. And forget that "student" pricing business. The who is buying a dictionary for the sake of it? The only reason that somebody is buying a dictionary is because they are learning. Whether they are a student or not. Keep it simple, honest, and fair.
We actually didn't start offering a la carte pricing because we expected people to pick and choose a bunch of items, we started offering it mostly for the sake of people who just want one or two - someone who's quite happy with a basic Chinese dictionary in other respects but really wants access to full-screen handwriting, e.g. I tend to view Add-ons as something akin to a whole series of apps, apps that since they're living in the same sandbox can piggyback on each other to share data / allow for easier task switching / etc; our flashcard module could be perfectly viable as a standalone app, for example, but it's better with the dictionary integration that comes with being built into Pleco.
There's also a practical component to add-ons; we want the flexibility to introduce new ones later, and we don't want to have to retroactively pay royalties on them for all of the thousands and thousands of people who bought that bundle in the past, so we need a way to sell new dictionaries we license individually. And we need some way for people who bought our products years ago on Palm/WM and transferred to iPhone to add the new pieces they're missing.
On pricing, we're at the mercy of publishers to some extent - we'd lose a substantial amount of money on every copy if we charged $20 (even for the Basic bundle). The educational discount prices we offer now are about the lowest prices we can afford to charge, and that's only because we get a break on some of our royalties by offering items with educational discounts. And it's not for lack of trying that the royalties we pay are as high as they are...
I'm interested by your reaction to this, though - can you think of any way we might be able to present the idea of individual add-ons that would seem a bit less distasteful? Maybe if we consolidated a lot of the little non-dictionary modules like flashcards / reader / audio into a single purchase, say, a "plus pack" that would include other non-royalty-paying new features we added in the future? (the only feature so far, flashcards, we did give to every previous bundle purchaser - we generally only charge for upgrades when they involve new per-copy royalties on our end)
live2work said:
Target parents of children looking for that edge in studying Chinese. They will spend thousands of dollars for Sunday Chinese courses. Imagine a kid that is told by their parents that they have to go to Chinese class and them must have an iTouch or iPhone. You will see tears from their eyes.
That one we definitely need to do more work on, though I think the first step is coming up with a UI that's less intimidating for kids.
live2work said:
Personally, I have not tried out your software yet, but I have used other learning tools when I was in school, and I am looking to provide my kids the same advantage. My hesitation right now is that they do not have an iTouch or iPhone. If your product is as good as all the posters claim, then I think you consider an outreach program to sign up schools and teachers. Develop application outside of the apps that can help teachers prepare their course work so that it is downloadable into the app. Make the app a part of the course, and not just a supplement. I am a big believer in digital learning, and Apple has change the way the game is being played. Did you know that some schools require an iPad as part of the school equipment. (It them becomes tax deductible or purchaseable via 529 saving plan)
Also something we definitely need to work on more - we're thinking about some pretty bold steps, like sending free copies to a few thousand US Chinese teachers (and maybe even free loaner devices for a few of them).
live2work said:
Finally, I did look at your website, and I am confused by all the dictionaries you have. How much difference are there really in all those dictionaries. 90% of the dictionary words are the same, so just pick the best one and just promote it heavily. Keep all those other dictionary add-on completely separate. Either you include them, or don't. Having them there makes people "feel" like they are missing something if they don't buy it, and who want shell out more money for redundancy. Imagine, being asked to pay $50 for something and it is still not complete. Very poor marketing. Remember, it is the impression that is important.
If that's your impression then I think you really need to spend more time with Chinese dictionaries - there are HUGE differences between them. We wouldn't be selling all of these extra dictionaries if people didn't want / use them; the only way we could give people a "complete" package for $50 would be to drop most of our current dictionaries and redefine "complete" as something like our current Basic bundle.
And by your logic, how can Microsoft get away with selling a "Home & Student" version of Office that's missing some business apps? People are paying over $100 for that and it's still not "complete." How can Adobe "nickel & dime" you for Photoshop / Illustrator / etc in addition to selling them as part of Creative Suite (and then offer several different editions of CS with different combinations of apps), isn't that equally distasteful?
We address a lot of different needs with Pleco, and while there's certainly a lot of room for improvement in how we market our software I feel like our fundamental concept is sound - create an amazing product, offer it with a ton of different options / add-ons to meet the needs of a wide variety of different people, and charge whatever we have to to stay in business and continue improving it.
