I wrote an article for the Sydney Morning Herald newspaper on Gamification. I plan to extend the thought experiment here with a longer blog entry on it. So in preparation here is a link to the original article:
While reading SamsMojo earlier this week I was surprised to learn the prices of the top 10 selling iphone apps for 2009. In fact, the price for the top seller was more than 10 times what I expected at $99 – The TomTom navigator app. Not the $3 we’d get as a response if we asked a random sample of people.
Sure, it’s a high price as far as iphone apps go, but it much cheaper than a $500 TomTom. The point for startup is this. There is no such thing as expensive. There is only expensive in relation to the set of relevant substitutes. And when we are pricing our brand or startup all pricing decision need to be made relative to the alternatives.
Here’s a list of brands for which I am personally brand loyal with. And to the right of each brand I have a given a reason.
Brand & reason
Qantas Domestic: They are the only full service domestic airline in Australia.
Ripcurl Wetsuits : They are simply the best quality, and the warmest. I will never, ever switch as the cost of getting it wrong is $600+ mistake. I also love the brand history.
Collingwood FC: I am a fan and I support the club, in this category performance wont create switching, but it does reduce my purchase frequency
iphone: I love it’s seamless funcationality and integrating so much, I find it hard to believe a better option will ever exist. I don’t even mind putting up with a few dropouts
Crumpler Bags: I love their design, and functionality, I also love the story of how they started and the fact the owners are from my local city.
Seth’s Blog: I know I’ll get a golden entry aroud once a week.
Twitter: It’s the only social network which suits my attitude & lifestyle. I like it’s brevity & immediacy.
Google Search: Works best. Would switch if better one came along. On occasion I now search on twitter for attitudinal & results based on timeliness.
Lavazza Coffee : Best tasting Roast & ground coffee after trying many others.
If we are fortunate enough to have a level of brand loyalty, then it’s equally important that we understand why we have it. In the case of Qantas, it’s more serendipitous than through providing a super product. Notice I’m only loyal with domestic travel, I’ll switch to Singapore or Cathay on international travel. Other brands like the Collingwood football club suffer from reduced revenue rather than losing market share. And Google, well they are only as good as their product where the switching costs are extremely low…. Once upon a time I was loyal Yahoo search…
The point for startups is simple. The reasons for brand loyalty are varied. Generating it is almost always related to having an awesome product. If our product isn’t awesome enough, then we need to ‘Awesomize it’. Only then will the brand story matter. Once we get loyalty our next job is to build a wall around it where switching costs are too high.
Got an idea for an iphone app you can’t find?
So write the brief for the app you want and can’t find, contact the developers and get it made. Get your itunes account up, choose a cheap ‘low barrier’ price, like a ‘dollar’ or so and sell that puppy. Remember it’s better to sell a $1 iphone app a lot of times than a a $5 or $10 one no times at all.
This micro-entrepreneurs opportunity is as simple as they come. Global distribution with an engaged audience – rare indeed. A classic ‘trend hijack’.
Go now – make it, sell it.