Stop Using The Cup of Coffee vs. $0.99 App Analogy

We’ve all seen the joke. Those of us in app development love to talk about how ridiculous it is that people will drop $4 every other day on a cup of coffee but will not “waste” 99 cents on our hot new app.

I hope by now we’ve learned something: This comparison doesn’t work.

Why haven’t we seen typical customer’s behavior change as the world of mobile apps has grown? Why hasn’t this argument worked? In reality, this argument is far from compelling and here’s why…

Fact: Starbucks Coffee is a Trustable Experience

I know I’ll like my cup of coffee. It will fully meet my expectations. For the $4 I spend I don’t expect it to change my life. I don’t expect it to even last beyond its last drop (and a trip to the bathroom later). It’s an experience I can fully trust will be pretty much the same each time. There’s no gamble here. Ask me if I’d like to drop $4 on a cup of your new “Instant Refresher Juice 1.0″ and there’s a very good chance I’ll pass. Or, maybe I’ll ask for a free sample to see if your $4 Instant Refresher Juice 1.0 is as good as Starbucks Coffee. In short, I know what I’m getting for $4 and I’m getting that same experience every time I hit the drive thru.

Fact: Your $1 App is a Total Gamble

Now, contrast this with your app, Mr. Developer. I don’t know you from Adam. You’re pitching digital Instant Refresher Juice 1.0 to me in the form of a new app. The return I’m going to get is questionable at best. I already have 30 games on my phone, some of them very good. Do I need another one? I don’t play the 30 I have. The experience I’m going to get from adding one more game is not trustable. I’m assured of nothing. Last week I bought a game for 99 cents and it was terrible. I played it once, for 15 seconds. I could be shoving $1 straight down the toilet again for all I know. Your app, good sir, is a total gamble. Sure, it’s only a $1 gamble… but it’s a gamble and that fact matters more than any price you might place on it.

Fact: Starbucks Has No Free Alternative

When you walk up to the counter of your local coffee shop you are not asked, “would you like a cup of our free coffee, or would you like to select from our paid options?”. If Starbucks gave out free coffee every day there would be mile-long lines at the drive thru. If the free coffee was anywhere close to as good as their paid stuff people would abandon the paid en masse. Some would pay maybe because they felt bad, as a freeloader. Others would pay because they preferred the options available to them in the paid column vs. the free. Now imagine the free selection at starbucks was nearly as large, or larger, than the paid selection: Welcome to the App Store.

Fact: Free Apps Are Often A Great Alternative

People are building fantastic free apps. They are finding new and creative ways to make money off these apps. Some people don’t even care to make a business out of their app, they just enjoy the process of building and releasing something cool to the masses. It’s akin to Starbucks offering a free line of excellent coffee products (maybe with advertising on the cup). If Starbucks did this would you expect to launch your own coffee shop across the street and make a killing selling your paid coffee? Nope. If you’re going to be a success in the App Store whether with a paid app, or a free app, you must understand this reality. And even more importantly, you must understand how to make money on “free”.

Fact: The Starbucks Craftsmanship Is On Full Display

What’s behind the bar at your local Starbucks? Gleaming canisters of coffee beans. A wide variety of flavorings. A very expensive-looking brewing machine you could never own yourself. An espresso-maker too big for your kitchen. These contribute to a “feeling” you get when you buy a cup of coffee. The feeling says “lots of work went into this magical liquid pick-me-up”. More importantly “lots went into this that I can’t easily re-create”. Why do you think Starbucks is able to sell you their coffee beans and yet not cannibalize their own business? They can do this because they know and you know that the experience is not easily replicated.

Fact: App Craftsmanship Is Hidden Away

Great software masks its complexity. It works like magic. The customer is not likely to make note of the craftsmanship involved in your app mainly because the bulk of the craftsmanship lies deep below the visual layer. How often have you heard people say “I could have made that app, if only I’d thought of it first”. Or “that’s so simple, I can’t believe its been so successful”. These are telling statements. The general public doesn’t understand the complexity and time it takes to build something great. While they typically understand that they couldn’t really have created this themselves they may not see your app is being truly an experience that can’t be replicated elsewhere. Going back to the free point above, there may be hesitation to drop 99 cents when you suspect a free alternative might exist that’s just as good or better.

One proven way to push this craftsmanship to the surface is to focus on solid app design. It’s the one thing that will visually highlight the effort you put into your app. At the code level it may be just as much effort to create your “Task Master 3000″ app with an ugly veneer as it would be to give it a nice paint job, but the paint job will be all the user sees.

One more minor point: If your app crashes, that’s like serving up your Starbucks in a dirty cup. Game over. You already suffer from a tough craftsmanship sell, so when your app crashes (even if it’s a fringe case and tough to solve) the user will assume you built the thing in 2 days and are trying to rip them off.

Is There Hope for the Paid App?

Sure there is. Just do what Starbucks does:

  • Build an app experience that’s unique and doesn’t feel “easily replicated”
  • Provide something the user sees as valuable to their daily life
  • Package it such that it shows off its craftsmanship
  • Find creative ways to profit off of a “free” version (Starbucks doesn’t do this…. yet)
  • Quit complaining about money wasted on cups of coffee

Four out of five of these things aren’t very easy, but amidst a growing sea of app developers and new ideas you must find ways to stand out from amongst the crowd. As long as you keep your focus on building something great and avoid counting your app store revenues before they hatch, you’ll do fine.

Now, who’s thirsty?

**This post is not sponsored by Starbucks and the author clearly failed to follow his own advice by hunting down a way to make money off this “free” article by negotiating a Starbucks story sponsorship. Oops.

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