In Store: Value Added vs Discount Product Offerings

Promotional Currency Offerings

In most apps that contain in-app offering, you’ll probably see their own unique Hard Currency offerings as well.  This hard currency will allow players to purchases items or unlock stuff in the game with the objective to make the users gaming experience better, usually….  Some games also include soft currency in the store they can buy straight out.

Providing a value for your hard currency can be approached in 2 different ways.

Value Added Products

Value added marketing is adding ‘more’ value to the current product without changing the actual  price of the product.  

Value-added products are defined by USDA as having:

  • A change in the physical state or form of the product (such as milling wheat into flour or making strawberries into jam).
  • The production of a product in a manner that enhances its value (such as organically produced products).
  • The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product (such as an identity preserved marketing system).

In games the value added product isn’t as difficult as the agricultural industry and its the simple act of adding more value to the HC pool from its former

100 HC for $10.00

[Value added Promotion]

150 HC for $10.00

Discounted Products

Discounted sales is the opposite of Value Added product where the product doesn’t change but the actual price of the product is discounted.

This is very common in the grocery industry where the closer the product nears its Best Before Date the the product get discounted.

In mobile applications, discounting the HC store is a very effective means for players to engage in this portion of the game.

100 HC for $10.00

[10% Discounted Offer]

100 HC for $9.00 (10% Off)

 

Best Practices

If you were to have the choice between the 2, always go with the value added offering.  This is very similar to the retail industry where many major retailers have been reporting dismal earnings quarter to quarter.  Whether it be the poor weather, Top Executive turnover rate or excess in inventory, the constant sales have conditioned consumers to only purchase when the item is at a discounted price.  J Crew, Banana Republic, Nordstrom are companies that are currently fighting to retain its prestige amongst consumers and struggles to figure out how to get consumers to pay at a premium.  

The problem, though, is simply the way these companies were built: they do not operate like fast fashion brands — like Zara — which has the supply chain (and an internal data center) that permits it to react to what customers like and dislike, permitting it to not have to resort to incessant discounting all of the time. Zara can adapt rapidly to fickle consumers, helping keeping it immune from the current bloodbath that is the retail industry.

“If I had to condense the foundations for Zara’s success, I would say it comes down to agility and flexibility,” Neil Saunders, CEO of retail consulting firm Conlumino, said in an e-mail to Business Insider in December.

This has been troubling for traditional retailers who haven’t been able to adapt so easily. Worse, the onslaught of discounting has put Nordstrom in a tricky spot: it’s been forced to resort to lots of discounting — in hopes of stimulating sales and also to rid itself of excess inventory — but even the sales are misfiring at Nordstrom, arguably because there are so many sales out there already.   (Business Insider)

Providing a discounted Sales in your In game store will create the same condition where the users will wait until the discount until they purchase anything in your store.  Be careful with this approach in hitting your monthly target as you may be unconsciously conditioning your users that will not help your product in the long run.

Bundles and Packs

Limited Time Bundle Packs is the recommended approach in increasing your revenue and conditioning your users to check the store for offers.

Only when Supercells introduced their limited time bundle offers is when you saw the game actually claim the Top 1-5 position consistently as their targeted offers effectively creating new consumers.

Having an effective means to provided value added bundles to your end user is an effective means in stabilizing your revenue stream on a daily / weekly / monthly basis.

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  • 15+ year mobile application industry veteran, probably product managing multiple apps. If he's not busy running this website, you can probably find him at the gym shooting half court shots, while playing the latest mobile rpg game.

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