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Applying the tipping principle to web applications

Posted Wednesday, October 10th, 2007, under what if

Some time ago I read an interesting article by Robert Woodhead about the principal of allowing people to judge how much they considered a service was worth to them. I read the article at a time when we were wrestling with how much to charge for our hosted task timer, and it semed to make a lot of sense.

We are still wrestling with this problem. Most people consider the idea completely bonkers. Looking around at the many hosted applications currently on the market, particularly the dozens of project management tools suddenly coming online, most of whom charge a tiered fee according to functionality available, you’d be forgiven for agreeing.

We are not convinced that the concept is madness. Our task timer is a very simple offering. It is aimed principally at freelancers, who tend not to require huge volumes of data, and we are not offering file storage, because that’s something we have never had need of ourselves. We want to see how much time we’ve spent on a given task or project, record that time simply with a single click, see how much that time is worth, and see at a glance what our income was over X period of time. That’s it, give or take a few details, nothing more. In short, our running costs are minimal.

We will need to charge a small amount to cover some costs, but cannot see a reason to tier the price according to number of projects open at any one time. Bigger businesses are not likely to use a service such as this, because they tend to require much more sophisticated functionality.

So why even add in the additional complexity of allowing users to define how much they would like to pay ? Why not just set the minimal monthly tariff and be done with it ? Well, because we have a hunch that we are not the only people who enjoy interaction, who take an active pleasure in showing appreciation for something that we enjoy using.

Some people will use the service more than others. They may not use it to the extent that they would gladly pay twice the price as a consequence, but they wouldn’t mind paying something. We are happy for users to decide the value of that flexibility themselves, so that we don’t have to, and can spend more time refining the core product.

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