Comparing web apps. Found one that seems really good. Go to plans page. Ah, they actually charge for the product, as opposed to other free ones I had looked at. Immediately think, “So that’s why it’s good.” Interesting how having to pay can actually make you feel MORE comfortable with a product.
Daniel
on 06 May 10It’s a common enough sentiment, although less so on the web. Still, it happens to me, when I’m just buying groceries. I look at two bottles of – for instance – olive oil, and if one is significantly more expensive then the other, the cheaper one is immediately “suspect” in some way. (I chose olive oil, because it’s something I don’t want to skimp on, but it’s not something where I’ve actively researched and know exactly what to buy.)
As always, it’s a matter of short-circuiting the decision process, in cases where you can’t compare things in use before you buy. Effective branding is one way to do it, good design of the individual products is another, and premium pricing is a thrid option.
Now that I think about it, Apple does all three…
Daniel
on 06 May 10Addendum to my comment above: I should add that by”good design of the individual products” I meant “design” in it’s narrower sense, i.e. looks, styling and packaging. I personally view design as “how it works” but in this case I accidentally used it in the more superficial sense.
Anonymous
on 06 May 10Not necessarily true… Apple’s MobileMe is in many ways inferior to what you get (for free) from Google.
Jason Klug
on 06 May 10The post isn’t about whether the product is actually is better or worse; Matt seems to be talking about that moment of decision between two products that you have little knowledge of and are making inferences about based on the little info you do have right in front of you… a big factor of which is price. He’s talking more about how humans infer superiority of the higher-priced item.
I also think that it tends to be true that the higher-priced item really is superior to the free alternative (nothing is absolute, of course)
BS
on 06 May 10I found this to be true recently when comparing SpringPad with Evernote. Evernote seemed to be better for what I wanted. However, I wanted to give SpringPad a chance, so I emailed SpringPad asking if they were going to offer a paid plan. I was hoping they were because I thought their app may improve with a paid version. They said (touted actually) that they were not planning on ever having a paid plan. I purchased a 1 year paid subscription on Evernote and have been extremely happy paying for software that I really like.
Anonymous
on 06 May 10I do agree with both of you on that many free stuff end-up not being as good as the paid alternative, but it’s just “Not necessarily true”, which is what I said on my first comment :)
A good example is 37signals itself, their apps are absolutely the best in their category (in my opinion), and they’re not free, which goes with what you’re saying. But take Ruby on Rails, I wouldn’t necessarily infer it’s worse than ASP.NET (which is obviously not) just because it’s free.
Same happens with Linux and Windows, IIS and Apache… But maybe open source stuff is an exception to all of this and it only applies to commercial products (?). In which case you would be absolutely right.
Daniel
on 07 May 10@Anonymous: It’s true what you say about open source software being free and good. And it’s a distinction I’ve thought about too. You can charge for your proprietary product, but then you damn well better have a good product. Or you can subject the source code to thousands of critics, and again: You need a good product.
But proprietary and free? Then it gets a little more fuzzy.
But as you also mentioned, it can fail: Paid products can be terrible. But then so can open source products. Open source by itself doesn’t guarantee quality after all. Of course, you don’t hear about the terrible open source projects, whereas if someone paid hard-earned money for something that turned out to be useless, they’ll scream bloody murder.
Kris Khaira
on 07 May 10The only thing it means if you think a significantly more expensive product is better is you’re not a very smart consumer.
Phil McTimoney
on 07 May 10Reminds me of the Stella tagline, “Reassuringly Expensive”
Miguel Marcos
on 07 May 10It is fascinating how many of these superior for-pay products are based on completely free and open source development platforms and OSes.
pwb
on 07 May 10I have just about the opposite reaction. When I hit a pricing page that does not list a free option, I am gone, probably never to return.
Fees are no longer an indicator of quality. Quality is.
Kelly H.
on 07 May 10Interesting to me that just one day prior Jason F. posted on this very same blog:
“Price is what you pay. Value is what you get.” http://37signals.com/svn/posts/2313-price-is-what-you-pay-value-is-what-you-get
I don’t see the direct correlation between price and value in my general experience.
@KellyH
on 07 May 10Perhaps you can ask some Ning users about a possible correlation. You know, the ones who were using Ning because it was free and great and now have to pay to keep their networks up. Strange thing about having a price, it may allow you to keep your doors open.
Ruben
on 07 May 10I recently experienced this from the opposite side of the equation. For my SaaS product, I got rid of my free plan. What happened? Conversions shot up by almost a factor of 10! Sounds crazy but a lot of it has to do with perception. And it’s about showing that you value the service that you provide. If you don’t, then why should they?
Bryan Sebastian
on 07 May 10Ruben, that is very interesting.
I remember Derek Sivers doing a talk where he told a story about someone whose business was struggling. They had decided to fold the business and were leaving on vacation. The owner told the assistant to cut all prices in half.
When the owner returned from vacation the assistant said that sales were thru the roof while they were gone! The business owner asked how could that happen?... I told you to cut the prices in half. The assistant had mistakenly doubled the price of everything. All of a sudden people felt that their products had more valuable due to the price increase.
Bob K
on 07 May 10I haven’t fully adopted GrandCentral / Google Voice for that very reason. Even now that it’s backed by Google there’s still that feeling that they could pull the rug out from under me after I’ve given everyone the number. So all I use it for is Craigslist ads.
Bob
on 08 May 10Goes to show you, some people are idiots. Weigh the value of something based on the price. Oh yeah, Jones live down the street.
allexrib
on 08 May 10oh nice, i´m going to pay for it, please tell me how much is it! please, please, please! i have money in my pocket! i´m big you know! how much? ho yeah! good feeling…
how is Matt anyway?
@Bob
on 10 May 10Totally, I mean it is pretty stupid to create something of value and then expect to get paid a fair price for it. Totally dumb. I agree, give it away for free and then we can all hold hands and sit in a circle and sing songs. That is totally what keeps economies strong and thriving.
Jona Fenocchi
on 10 May 10People think that they get what they pay for. It isn’t always true, but that perception is both powerful and important for a small business owner.
My father used to own an air conditioning & heating business, many years ago. When he began his business, he worked hard to provide the best deals to his customers for units and other equipment in addition to the lower cost of service. The result was that he LOST business because potential customers wondered why he was charging less than competitors and assumed that his work was either of poor quality or in some way illegal.
This discussion is closed.