The psychology of In-app Purchases

BlueIconUp until Windows Phone 8 introduction the only app monetization options were free, paid, and trial. The trial meant that app would provide some free functionality. Once the user would pay for the app, all the features would get unlocked. This model did not work well for developers. It was an all or nothing deal. Users either had a free limited version or they paid a set price for a full version. The bigger issue was the lack of app discoverability. The trial version apps are considered paid apps and therefore do not show up in the search results when search is solely limited to free apps.
The introduction of in-app purchases in Windows Phone 8 has opened new potential opportunities for developers. Or, has it? Hmm… The time is ripe to find out. I will use my latest app, minScore, as a test instrument for the experiment. The app offers 3 products for purchase. A consumable, which expires after 5 months and two are durables. The durables unlock app features with no time limits. Each product has a unique price. The dilemma is how to most effectively present the products on the buy screen. How do we order them in terms of price. Should the app display the most expensive product first? Would users bite the bait? Maybe displaying the cheapest product first would be more effective at luring the user into purchasing the product.

As an engineer interested in psychology of human behavior I decided to run an A-B experiment. It consists of displaying the products sorted by price either in ascending or descending order. The fifty percent of the users will see the most expensive product listed first. The other fifty percent will see the cheapest product listed first. Once a large enough number of users have seen the products and made purchases we should have enough data to confidently claim whether the order of products matter and if it does, which one is the most effective. Stay tuned for the results. Until then, keep it real!

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