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More thoughts on micro vs macro donations and the turning point for donationware

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mouser:
I had a bit of an epiphany the other day about why it's so hard to get people to donate for donationware software in the current environment, and it's related to purchase price vs purchase effort.

My hypothesis is the following:

When a person is considering whether to donate for a piece of software, they look at the AMOUNT THEY ARE PLANNING TO PAY and compare that to the WORK+RISK INVOLVED in paying.

If the amount of work far exceeds the amount they are planning to pay, they will not proceed.

IMPORTANT: Note that this is not a rational decision, as far as i can imagine.  But I hypothesize that it is the case.

If it's true, it just adds weight to the argument i've been making that the donationware community needs a savior, in the form of a kind of Universal App Store payment system, whereby *everyone* is set up to making small donations super-easily and safely with just a click of a button.

But if true, it also suggests something else:

The one way to get people to get over the hump and make the effort to donate, is to stop focusing on small donations -- since the smaller the donation, the more resistant someone will be to go through the effort to donate (under my hypothesis).  It means that a focus should be on providing enough value that the amount they are going to spend gets high enough to be perceived as worth while.

If it's true it means that letting people choose their own price to donate may in fact be counter-productive for most potential donors, because it will lead to a chain of reasoning where they conclude they should avoid the software because its "value" to them (in terms of how much they were going to donate) does not justify the work involved.


Now here is where things get interesting.. You might be able to solve this problem if you frame the "purchase" differently.  For example you might be able to say:
"Here is a piece of software.  The cost for it is $100.  BUT if you are willing to go through the trouble of paying via paypal and using a license key, you can have it for $5."

It's possible this would help to avoid the problem where the person first concludes that the "value" of the software is $5.. and therefore not worth the effort to pay for it.  If they view it as a $100 product which they are able to get so much cheaper with a little effort, that might solve the problem.


A more specific implementation of this would look like this:  On the program page is a super quick "Buy Now: $100".  And a link saying "Tell me how i can pay less (or nothing) for this product.."  and the link would take them to a page that let's them pay anything they want including nothing, as long as they are willing to read the instructions on how to proceed.


Thoughts?

JavaJones:
Wow, some very interesting ideas here. I was right with you all the way up to the "Software costs $100 but you can buy it for $5 through Paypal" thing. Wouldn't they have to use a "license key" for the $100 version? And is Paypal really that much harder than using e.g. Worldpay or some other credit card processor that you'd use for a buy system anyway? Paypal even takes credit cards. So I don't really see how you'd differentiate that.

That being said, maybe if it was more like "If you would like to buy the stand-alone software you can do so for $100. Alternatively you can get a license for all DonationCoder software for a donation of $25 or more to the site.", something like that. I know you prefer donations to individual authors, but you could probably work out a way to distribute it equitably. And there are other ways to structure it too. I just don't get your version really, it doesn't make sense to me as a consumer.

But I think the revelation that the value vs. hassle of the software product and donation requirement for accessing it is more or less spot on. Cost is often less an issue for people than effort and perceived value. And perceived value is a *really* interesting one because it often has little or nothing to do with the actual functionality, capability, or even aesthetic qualities of a product. Value can be completely "manufactured" conceptually, for example. If you can make someone believe what you are selling is worth a lot, they will want to buy it, even (or perhaps even more so) at a high price, regardless of whether the sum total of its working parts costs you $1, or whether its functionality can be duplicated by a free or cheap doodad.

- Oshyan

Deozaan:
Two points:

1. I consider PayPal to be easier than not-PayPal. Since PayPal already has all the necessary information necessary to make a payment, all I need to do is login, type in an amount, and hit the pay button. Without PayPal, I need to type in my contact information, billing information, credit card information, etc., and hope you take my credit card/debit card. But I do understand that PayPal isn't available all over the world and certain people/places have problems with them.

2. The Humble Indie Bundle is a case of pay what you want (minimum of $0.01) being very successful. But that may also be because the games in the bundle are "normally" about $20 each. So it's a sale mentality, which you brought up with your "$100 software for [whatever amount]" example.

mouser:
I was right with you all the way up to the
--- End quote ---


I didn't explain that part well..  Let me try to re-explain.

The main point I was trying to make is,

Offer a super quick straight-through pass to purchase at high price.  That will be the fastest and least-mental-effort path, no more choices to make and the value is set at $100.

And a link to "Learn more about how to get the software at a cheaper price or for free.."

That second page will require them to do some reading and thinking, to figure out if this approach is for them.. they will have to read how to divide up their donation, and how the site works, etc.

The goal is to do two things:
One is to tell them how much WE think the software is REALLY worth, so that they don't think of it as worth the lowest amount they can imagine.
The other is to make it easier to purchase at the full price than to do extra work to get it at a savings.

What it tries to avoid is the situation where:

* Person reads that the software is donationware, concludes they are willing to pay $5 and thus that the VALUE is $5, and then decides it's not worth the effort to go through these steps to get a $5 piece of software.
* Instead we want them to start off saying: This is a $100 value.. now how much mental effort am i willing to trade off to reduce the cost to almost zero.

worstje:
The price for software will always be compared to the most commonly paid price amongst peers. I can call something a $100 tool all I want, but if I give away tons of licenses on GAOTD, sell it for $30 on BDJ on a semi-monthly basis, have a referral program giving similar discounts... well, people won't think of it as a $100 tool at all.

Why? Reviews and other publicity will all be about those early adopter people who got a then seemingly good prize. Then you check and the prize has tripled. So your user ends up having to wait to get the perceived value, because people do not like to pay more than others for the same product. Just think of all those gamers who whine like no tomorrow if a month after they buy a game the same game can be bought for $10 less.

Also it pays to remember that the internet is a very grown up place now. Search engines make finding reviews easy peasy. There are tons of software directory sites too, and I pretty much expect them to have graphs with the cost over a time period as well. Any price-fu you figure out will bite you in the arse at some point, I reckon.

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