Back in July, I posted twice about a promotion by MacUpdate. I first obliquely noted their curious incentive structure at the beginning of the promotion, questioning the basic idea. Towards the end of their promotion, I was considerably more direct and more critical.
To summarize, their promotion had a system of "unlocks," where additional -- and higher quality -- applications would be "unlocked" with sufficient sales and added to the promotion. This is, in short, a classically bad idea, because there must be early sales to add the extra applications and attract more customers, but, as a customer, you're better off waiting to make sure the extras are unlocked. Thus, the promotion either needs to be sufficiently attractive without the extra applications, or you need a bunch of (let's be positive) optimists to buy under the assumption that the best applications would in fact be reached.
The approach seemed like a bad idea to me at the start of the promotion, and the way the promotion played out only strengthened that. MacUpdate didn't actually reach their goals. They changed the targets and extended the promotion, so that all the applications were in fact provided. They really had to -- just imagine how poorly it would have reflected on both MacUpdate and the "premium" applications had they failed to unlock everything!
So, MacUpdate has another promotion. They've again got 10 applications, with 7 available at first and 3 more to be unlocked with sufficient sales. The target numbers for the unlocks are much more modest, which seems prudent. However, instead of having the most valuable application being unlocked last, they've gone and reversed it! That's right, the $300 Xmind Pro application is unlocked at 1000 sales, while the final unlock at 5000 sales gives the $45 PulpMotion application. Does this make sense? No, of course not. Really, what should we conclude from the structure? That PulpMotion is the crown jewel of the promotion? Isn't that tantamount to saying that Xmind is overpriced by an order of magnitude? (N.B., I have not used either Xmind or PulpMotion.)
It is obviously an attempt to ensure success, but I think that MacUpdate has drawn entirely the wrong conclusion. Wouldn't a simpler approach just have been to offer all ten applications from the beginning? If nothing else, it would have avoided the absurdly contrived bonus structure that they've produced.
My key point in the posts from July was put in the form of a question: is this really a good idea in the long run? I think MacUpdate has, unintentionally, provided a clear answer: no.
Showing posts with label MacUpdate. Show all posts
Showing posts with label MacUpdate. Show all posts
Tuesday, December 4, 2007
Sales, Sales, Sales!
There sure seem to be a lot of sales on Mac software this month. I don't recall quite so many last year. I've already mentioned MacSanta. There are also Give Good Food to Your Mac and a MacUpdate promotion. Are there others?
Of the three, Give Good Food to Your Mac is definitely the most appealing for me. It allows you to decide on your own bundle of applications, with a discount based on the number of applications. Their approach does lead to some oddities, though. For example, you should never buy between 7 and 9 applications, because it is always cheaper to add inexpensive applications and get 10. Even if you'd never use them, you still pay less, and, hey, I would use, e.g., CoverScout, even if I'd never buy it on its own merits.
MacSanta is more traditional in its structure. Unfortunately. New applications are announced every day, with a 20% discount possible for that day. Later in the month, you can still get the applications, but with only a 10% discount. It's a very annoying set-up. I really can't picture buying anything from it at the 10% level, but the 20% level seems only relevant for something that I'd decided to get anyway. Of course, if I've decided to get an application, I've probably already bought it! That said, I have already bought ShutterBug and may well get MarsEdit, too, so they are definitely doing something right. I guess it works to push me off the fence…
The MacUpdate promotion looks to be a good value, if it is offering applications you want. Which it is not, for me.
Update: There is one other point about Give Good Food to Your Mac that I'd wanted to mention. In their FAQ, there is a clear and unambiguous statement that all licenses purchased are normal licenses, with no restrictions. This is the way it should be done, in my opinion.
In contrast, MacUpdate has "full licenses with normal upgrade paths" except for "Swift Publisher, which will be a paid upgrade." Seriously, why?
MacSanta is structured differently, so the issue doesn't really come up there, as far as I can see. You just get a discount code that you use directly on the developers' sites, rather than a bundle through a third party.
Of the three, Give Good Food to Your Mac is definitely the most appealing for me. It allows you to decide on your own bundle of applications, with a discount based on the number of applications. Their approach does lead to some oddities, though. For example, you should never buy between 7 and 9 applications, because it is always cheaper to add inexpensive applications and get 10. Even if you'd never use them, you still pay less, and, hey, I would use, e.g., CoverScout, even if I'd never buy it on its own merits.
MacSanta is more traditional in its structure. Unfortunately. New applications are announced every day, with a 20% discount possible for that day. Later in the month, you can still get the applications, but with only a 10% discount. It's a very annoying set-up. I really can't picture buying anything from it at the 10% level, but the 20% level seems only relevant for something that I'd decided to get anyway. Of course, if I've decided to get an application, I've probably already bought it! That said, I have already bought ShutterBug and may well get MarsEdit, too, so they are definitely doing something right. I guess it works to push me off the fence…
The MacUpdate promotion looks to be a good value, if it is offering applications you want. Which it is not, for me.
Update: There is one other point about Give Good Food to Your Mac that I'd wanted to mention. In their FAQ, there is a clear and unambiguous statement that all licenses purchased are normal licenses, with no restrictions. This is the way it should be done, in my opinion.
In contrast, MacUpdate has "full licenses with normal upgrade paths" except for "Swift Publisher, which will be a paid upgrade." Seriously, why?
MacSanta is structured differently, so the issue doesn't really come up there, as far as I can see. You just get a discount code that you use directly on the developers' sites, rather than a bundle through a third party.
Sunday, July 15, 2007
Behaving Stupidly in Groups
I was only going to post the once concerning the MacUpdate promotion, but I just can't resist. The current state of the promotion provides such a beautiful illustration of how making good individual choices can lead to perverse large-scale behavior. Thinking it through also leads to such an interesting optimal strategy for purchasing and whether or not to recommend that others purchase the bundle. Keep in mind, this is coming from someone that has already described the bundle as a great deal.
Right now, the promotion can fairly be described as not going well. There are fewer than two days left of a nine-day promotion, and the number of sales is at about 3300. It looks like sales are going to limp along and just fail to reach the unlock point of 4000 sales for Intaglio. There was clearly an expectation of at least 10,000 sales, which is where the final application, TechTool Pro, would have been unlocked. I argued in the previous post that the entire system of unlocks is ill conceived, putting a strong disincentive on buying early, even though early sales are needed. As well, there originally was a system of invitations that benefitted not the sender of the invitation, but the recipient, providing further encouragement to wait before purchasing; the invites have since been fixed to reward the sender and recipient both.
To provide an example of where the problem comes in, consider Intaglio. People have already posted comments on the promotion site to the effect that they will buy once Intaglio is unlocked. How many people are waiting for that? The bundle could be viewed as getting Intaglio, a well-regarded program that costs $89, for $50 with a bunch of other applications thrown in for free. It must be tempting, but, really, why should they buy it without knowing for sure that Intaglio will be unlocked? If enough people make that decision, none of them get the program, even though together they could have provided the needed number of sales. The group behavior seems stupid, but the individual behavior is completely sensible.
Given the state of the sales, I think it worth considering the optimal strategy for those who have already bought the bundle, and for those who are thinking about buying the bundle. The optimal strategy for MacUpdate is indifferent to me; I see no reason to care, except in how it influences the benefits I will get from the promotion.
Let's focus first on those who, like me, have already bought the bundle. We'd like to get as much more added to the bundle as possible, since it's all just free for us at this point. At first, it looks like we should encourage people to buy the bundle, so as to unlock Intaglio, at least. However, Joel Mueller, one of the organizers of the promotion, posted (as MUeller) a comment on 13/7 at 4:04 pm:
Interesting claim! Those "big guns" must be really something, right? Let's assume that they are enough to cause enough sales to at least unlock Intaglio.
However, it does mean that there are some nice additions to the bundle which they're holding back. This in turn means that encouraging people to buy before those "big guns" are made available is pretty much a fool's game. We should encourage people to wait, hopefully getting both the "big guns" and unlocking Intaglio and TechTool Pro. In passing, I think Intaglio is quite possible, but doubt TechTool Pro will be unlocked.
The same thinking applies to those who have already decided to buy, but haven't yet: they should wait to be sure that MacUpdate makes the "big guns" available. The same goes for those who are waiting to buy until, e.g., Intaglio is unlocked: they should wait, both to be sure that Intagio does unlock and so as to get the "big guns".
I can see no reason for prospective buyers not to wait, at this point. There isn't a sufficient rate of sales to be at all sure that Intaglio will unlock; TechTool Pro is a pipe dream. There are some extras that haven't been offered yet. What appears to be the best case right now would be for sales to tank completely, pretty much forcing MacUpdate to offer some serious incentives with enough time left for Intaglio to unlock.
The combination of supposed incentives in the promotion are pretty tragic. Each one has actually been a disincentive to early purchasing, basically killing any chance of enough sales to unlock the "crown jewel" of TTP. I must admit that I'm puzzled how MacUpdate could have gotten all of this so wrong. Could they actually have believed all the marketing dross about "the Mac community" on the promotion web site? There really isn't a relevant community there, just potential customers who'll make decisions that are right for them, not for some mythical community. It is not exactly a secret that people make choices for individual benefit can lead to perversely contrary results in the large.
I will offer up a thought on what MacUpdate's strategy should be, although I won't put much effort into it. You want to sell as many as possible, so offer those "big guns," do it fast, and make clear that there's nothing else. So long as there is reason to think you're holding back, you're providing incentives to wait, killing sales to those who would buy if Intaglio were unlocked.
As a closing note, do remember this is from someone who's already bought the bundle and thus has every reason to hope for a successful promotion. If I'm concluding that it would really be best for sales to die off, and fast, then there's something quite wrong with the incentive structure.
Right now, the promotion can fairly be described as not going well. There are fewer than two days left of a nine-day promotion, and the number of sales is at about 3300. It looks like sales are going to limp along and just fail to reach the unlock point of 4000 sales for Intaglio. There was clearly an expectation of at least 10,000 sales, which is where the final application, TechTool Pro, would have been unlocked. I argued in the previous post that the entire system of unlocks is ill conceived, putting a strong disincentive on buying early, even though early sales are needed. As well, there originally was a system of invitations that benefitted not the sender of the invitation, but the recipient, providing further encouragement to wait before purchasing; the invites have since been fixed to reward the sender and recipient both.
To provide an example of where the problem comes in, consider Intaglio. People have already posted comments on the promotion site to the effect that they will buy once Intaglio is unlocked. How many people are waiting for that? The bundle could be viewed as getting Intaglio, a well-regarded program that costs $89, for $50 with a bunch of other applications thrown in for free. It must be tempting, but, really, why should they buy it without knowing for sure that Intaglio will be unlocked? If enough people make that decision, none of them get the program, even though together they could have provided the needed number of sales. The group behavior seems stupid, but the individual behavior is completely sensible.
Given the state of the sales, I think it worth considering the optimal strategy for those who have already bought the bundle, and for those who are thinking about buying the bundle. The optimal strategy for MacUpdate is indifferent to me; I see no reason to care, except in how it influences the benefits I will get from the promotion.
Let's focus first on those who, like me, have already bought the bundle. We'd like to get as much more added to the bundle as possible, since it's all just free for us at this point. At first, it looks like we should encourage people to buy the bundle, so as to unlock Intaglio, at least. However, Joel Mueller, one of the organizers of the promotion, posted (as MUeller) a comment on 13/7 at 4:04 pm:
We still haven't pulled out our big guns yet. We wanted the community to pull through first. Do not loose [sic] hope. We have every intent to unlock every app in this bundle.
Interesting claim! Those "big guns" must be really something, right? Let's assume that they are enough to cause enough sales to at least unlock Intaglio.
However, it does mean that there are some nice additions to the bundle which they're holding back. This in turn means that encouraging people to buy before those "big guns" are made available is pretty much a fool's game. We should encourage people to wait, hopefully getting both the "big guns" and unlocking Intaglio and TechTool Pro. In passing, I think Intaglio is quite possible, but doubt TechTool Pro will be unlocked.
The same thinking applies to those who have already decided to buy, but haven't yet: they should wait to be sure that MacUpdate makes the "big guns" available. The same goes for those who are waiting to buy until, e.g., Intaglio is unlocked: they should wait, both to be sure that Intagio does unlock and so as to get the "big guns".
I can see no reason for prospective buyers not to wait, at this point. There isn't a sufficient rate of sales to be at all sure that Intaglio will unlock; TechTool Pro is a pipe dream. There are some extras that haven't been offered yet. What appears to be the best case right now would be for sales to tank completely, pretty much forcing MacUpdate to offer some serious incentives with enough time left for Intaglio to unlock.
The combination of supposed incentives in the promotion are pretty tragic. Each one has actually been a disincentive to early purchasing, basically killing any chance of enough sales to unlock the "crown jewel" of TTP. I must admit that I'm puzzled how MacUpdate could have gotten all of this so wrong. Could they actually have believed all the marketing dross about "the Mac community" on the promotion web site? There really isn't a relevant community there, just potential customers who'll make decisions that are right for them, not for some mythical community. It is not exactly a secret that people make choices for individual benefit can lead to perversely contrary results in the large.
I will offer up a thought on what MacUpdate's strategy should be, although I won't put much effort into it. You want to sell as many as possible, so offer those "big guns," do it fast, and make clear that there's nothing else. So long as there is reason to think you're holding back, you're providing incentives to wait, killing sales to those who would buy if Intaglio were unlocked.
As a closing note, do remember this is from someone who's already bought the bundle and thus has every reason to hope for a successful promotion. If I'm concluding that it would really be best for sales to die off, and fast, then there's something quite wrong with the incentive structure.
Friday, July 13, 2007
A Nice Deal on Software (but a Bad Idea?)
Right now, MacUpdate is running a great promotion, with a bundle of useful programs at a good price. The promotion is obviously based on MacHeist, but the character of the bundle is different. The programs in the MacUpdate bundle are selected based on the best-selling previous promotions, which makes the bundle maybe less flashy, but probably more useful overall. I've bought the bundle, and hope enough others will buy in order to "unlock" all the applications.
That said, the promotion is appropriate to this blog for a much different reason. The promotion has an odd property that there are a number of disincentives to buying it early, but that it really requires early purchases to make it successful. There are seven apps to start, with three others that get "unlocked" if enough people purchase. So, if you buy early, you risk not getting the "locked" apps if the bundle doesn't sell well. Also, there was originally a system where, after buying, you could send an invitation to others, who would get a one-year paid membership to MacUpdate. While the benefits of that membership are pretty marginal, it's another reason to put off purchasing -- someone might send you an invitation, after all. Happily, this invitation system has been corrected by now.
The promotion thus seems to have a Nash equilibrium for the "don't buy" state. While I didn't pay much attention to MacHeist, largely because I'd already registered the only programs in the bundle that were of interest to me, it would also have had such a Nash equilibrium. It is clear enough that MacUpdate based their promotion on the success of MacHeist, but is this really a good idea in the long run?
Update: I think that the final paragraph might need to be clarified a bit. I mention that MacHeist was successful, and also that it had the same sort of Nash equilibrium that the MacUpdate promotion features. It might seem strange that I'm pointing this out as a problem for MacUpdate, when MacHeist was successful. In short, I'm arguing that MacHeist was successful despite the "unlock" portion, and certainly not because of it. Further, claims that MacHeist was successful are true in absolute terms, but do not validate the unlock idea; it could well be that MacHeist would have sold more without the unlocks.
That said, the promotion is appropriate to this blog for a much different reason. The promotion has an odd property that there are a number of disincentives to buying it early, but that it really requires early purchases to make it successful. There are seven apps to start, with three others that get "unlocked" if enough people purchase. So, if you buy early, you risk not getting the "locked" apps if the bundle doesn't sell well. Also, there was originally a system where, after buying, you could send an invitation to others, who would get a one-year paid membership to MacUpdate. While the benefits of that membership are pretty marginal, it's another reason to put off purchasing -- someone might send you an invitation, after all. Happily, this invitation system has been corrected by now.
The promotion thus seems to have a Nash equilibrium for the "don't buy" state. While I didn't pay much attention to MacHeist, largely because I'd already registered the only programs in the bundle that were of interest to me, it would also have had such a Nash equilibrium. It is clear enough that MacUpdate based their promotion on the success of MacHeist, but is this really a good idea in the long run?
Update: I think that the final paragraph might need to be clarified a bit. I mention that MacHeist was successful, and also that it had the same sort of Nash equilibrium that the MacUpdate promotion features. It might seem strange that I'm pointing this out as a problem for MacUpdate, when MacHeist was successful. In short, I'm arguing that MacHeist was successful despite the "unlock" portion, and certainly not because of it. Further, claims that MacHeist was successful are true in absolute terms, but do not validate the unlock idea; it could well be that MacHeist would have sold more without the unlocks.
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