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Why is it emotionally easier to spend $5 on a coffee vs spending $5 on an app? I have a theory on this - I think we price experiences differently from objects,
by czr80 13y ago
Why is it emotionally easier to spend $5 on a coffee vs spending $5 on an app?
I have a theory on this - I think we price experiences differently from objects, and have a much higher bar for buying an object vs buying an experience. And I think the reason for that is ultimately loss aversion - if we buy a bad coffee it's gone and we can forget about it, whereas if we buy an object we're stuck with it, a constant reminder of how we made a bad choice and lost money.
- lleims 13y agohttp://www.joshlehman.com/thoughts/stop-using-the-cup-of-coffee-vs-0-99-cent-app-analogy/ http://www.joshlehman.com/thoughts/stop-using-the-cup-of-cof...
- Semaphor 13y agoI rarely buy a cup of coffee (I buy beans). But when I do it's because I need/want it now and I have no alternative, for example at the train station. With apps that usually doesn't happen.
- ProblemFactory 13y agoA $5 coffee also buys you a place to sit down and use WiFi, and a bit of social interaction or "lifestyle". Nobody pays $5 per cup of coffee at a supermarket. No app developers include "installed by a human" and the permission to go sit on a couch at their office for half an hour in the price!
- aestra 13y agoMy supermarket has a Starbucks inside, without seats or WiFi. It stays there because presumably people are buying $5 coffee from there.
- fburnaby 13y agoSomeone has made and maintained the app over a few person-months of effort, and can sell millions of copies of it. In order to pay for their time spent making the app, I need to give them one millionth of the cost of their time developing it. When there's lots of competition in the app market, app makers will have to sell their time at competitive prices. Compare that to coffee. There are three baristas on this street who can make me a coffee, so they're also in a stiffly competitive market. But they have to make me my coffee personally, one at a time. I have to buy a larger portion of their time, since they can only make a few dozen coffees per hour (and they have more physical supply-chain issues to manage, like sourcing beans and managing a property). It's emotionally easier to pay for the coffee in part because no-one down the street is offering it for half the price, or for free. They can't. An app developer can. And they'll have to, because if they don't, someone else will. Because they can.
- wisty 13y agoI commented on this somewhere else ... People generally judge value by looking at the competition. A good coffee shop is better value than Starbucks, so it's good value. A good $1 app is waaaay more expensive than a free one, so it's a rip-off.