Price Points for Ambient Voice Devices

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There is a lot of psychology that goes into price points. Before we ran the Ubi on Kickstarter in 2012, we had researched may different successful projects to understand their pricing tiers and what would be considered good value for a revolutionary product.

The pricing for Kickstarter campaign rewards has different motivations behind it than regular retail pricing. Kickstarter campaigns need to show popularity so often the goal is really much less than what’s actually need to ship the product. Seeing that something is 10,000x funded is much more impressive than seeing a five-figure number.

The other piece of psychology around crowdfunding campaigns is having some certainty that the project will actually be funded. To the backer, the money is being lost today so the risk is higher if it appears that it’s less likely that the project will actually be backed. To compensate, projects will often offer “early backer” rewards at a significant discount.

We did this during our Kickstarter campaign. We offered the Ubi at $149 for an early backer reward and then the normal price was $189. We sold out of the 100 early rewards within 8 hours of the project’s launch. Then there was a pause of about 10 minutes. Then it picked up again. We also offered multiple packs. The largest was a 10 pack that ended up reducing the price to $119 per Ubi.

After our campaign, we experimented with different price points, and even challenged people who would come to us asking for ridiculously lowball offers. One person wrote us “I’d only buy this if it were $20”. And we’d say, OK — here’s a 95% discount code. Most of the time, we’d never hear from them again. Sometimes, money talks.

Our prices had gone from $99 to $299 and what we found was that the lower price point didn’t necessarily show case our abilities and led to higher support requests.

It’s interesting to see the different devices on the market now. For the Echo, the range is $41 in a ten pack to $179. Nucleus and Triby are $249 and $199 respectively. We’ll probably see some $99 Alexa-enabled speakers soon too.

The Google Home product is reported to come out at $129. We’ll see what other extras will be built into that price, such as music services.

If the lowest price Echo device is $41 today and we assume Moore’s law holds in this case (probably not to the same extent), that means we’ll seen in 2018 a $20 Echo-like devices and by 2020, $10 devices will have the same performance.

At some point soon, we might even be paid to take voice interactive devices into our home. That day, companies will be competing for us and our attention and consumers will be the winners.

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