You may have read about BarMax - an educational app to help lawyers prepare for the Bar Exams. You may also have wondered how many customers would be willing and able to pay $1k for an iPad app (with a one-click purchase no less!)
Having racked up sales of >$200k in just California and New York there seems to be a captive market in place. The decision to purchase the product makes sense when you consider that alternative Bar preparation courses cost around $3-4k.
These sales figures raise some interesting thinking points for education app and online service providers...
1. Psychology - what is the anchor price for apps? Do consumers make an opportunity cost judgement (i.e. $1k is a lot but my alternative is to spend >$3k)
2. Distribution - Is there something about being able to download with one click that makes consumers hesitant to buy. I would love to see an experiment whereby consumers could buy the same software on a CD or USB stick and to compare sales figures.
3. Customer Life Time Value - How do providers encourage renewal rate/upgrade to other similar products. Is a one-off download of an app the best way? Would my product be more or less appealing if I sold just 10% of the book (2-3 chapter) at $100 and then encouraged my customers to buy more as they required it. Is the $1k upfront price a psychological hurdle or is the average iPad carrying law student more rational in their purchasing decision?
How much would you pay for an online, portable educational app? Would you be willing to study French or prepare for a GMAT using just your iPad? What would influence your purchase decision the most? Would it be the "cost of alternatives" factor or your preference for a given format? (iPad app vs textbook vs laptop vs podcast)