Sales work – who knew?

The SourceTree 1.2 launch sale is now over, and I thought I’d post some indicative results. I went for a fairly large discount of 40% over a full week, and some people I know commented to me along the lines of ‘what about all that money you’ll be losing on each sale?’.

I decided on a large discount because SourceTree 1.2 was a major update that I was actually quite proud of, so I wanted to get it in front of as many people as I could. I was also aware that there might be people who tried SourceTree before, but who decided it wasn’t for them, and I wanted to encourage these people to try it again, since I’d made pretty big strides in this version on the overall appearance of the app and the smoothness of the workflow, in addition to all the normal new features. The way to do this of course is to make it worth their while to do so, by offering a discount that really grabs their attention. A 20% discount probably wasn’t going to do that effectively, but 40%? That’s almost half price! It’s this sort of gut reaction I was looking to promote.

The other thing I was acutely aware of is that you have to be careful not to have too many sales. If you go on sale too often, people are going to start assuming that there’s a sale coming almost any time of year, so will avoid buying unless there’s a sale on. In my opinion, sales need to be infrequent, but big and attention-grabbing when they do happen.

So actually my goal for the sale wasn’t necessarily to make more money than usual, but to get more eyeballs on the new version, and more active users, which I hoped would then translate to more awareness and more sales further down the line, because satisfied customers are the best marketing resources you can ever have. Solid reasoning, but as it turned out, things went much better than I could have hoped, so in the end I actually achieved both at once. :)

So for those people who were wondering whether having a sale is worth it, my results are on the right, in fashionable infographic form ;)

As I said above, what I was really looking for was to reach more people, and I certainly did that – with a 793% increase in units sold in the sale week, that’s about 2 months’ worth of new users in one week. And as you can see, in value terms it also ended up a considerable net positive even with the 40% discount – now of course I’m expecting sales to be more sluggish immediately following since the sale will have caused people to bring forward their purchase, but I’m pretty confident it’ll remain positive even with that compensating effect.

So why am I writing about this? Am I doing it to strut around flashing my ‘wad’ at people? No, and if I’d included the actual $ values you wouldn’t think that anyway – they’re fantastic news to me but they’re in the ‘I can keep doing this sort of thing for a living!’ range rather than the ‘I can buy a Ferrari tomorrow!’ range :) I’m writing it to hopefully provide a data point to other developers who, like me, are still learning about selling their wares online, and are wondering about what kind of affect a sale might have. I don’t know whether it will be exactly the same for you, and there are no doubt a number of variables involved, but this was my experience, and I’ve been very happy with it. Maybe it will help someone else pondering a similar decision…

  • Anders Elfgren

    “now of course I’m expecting sales to be more sluggish immediately following since the sale will have caused people to bring forward their purchase”

    Actually, I’m willing to bet that you’ll notice that sales will be higher than what they were pre-sale for a while. That’s a common phenomenon for games on Steam sales.

  • Nico de Poel

    I agree on your point that sales shouldn’t happen too often, because people will start anticipating them. I find myself regularly holding off on purchases on Steam and Xbox Live, for example, simply because I know they will be on sale in a few months’ time. Same goes for brick-and-mortar stores by the way. A little bit of patience more often than not will save you half the price of admission. From the product creator’s point of view, that seems a bit counter-productive to me.