Okay, so you are building an app. You intend to capture a fancy customer list, but are unaware of the effective strategies and techniques to make your app a solid source of revenue.
Here you are going to uncover some useful and time-proven tips to monetize your app.
No wonder formula
There is no wonder formula to generate revenue from your app.
Statistics presents a startling picture of just 2% of app developers contributing to roughly 54% of all app revenues. About 93% of the staggering number of more than 179 billion app downloads in 2015 were free downloads. Surrounded with a bewildering sea of apps, some customers are not ready to spend $ 0.99 on a supposedly great app. But going free is not your option for all the efforts you put in. Formulation of a well thought-out plan to monetize your app is essential to get better Return on Investment (ROI).
You need to start from the basics. Deciding on the right app monetization scheme should not be an addendum. The objective to “make it for business” should be fused into the plan from the beginning phase of app development. This will enable you to save yourselves from the pathetic condition of having time and money invested in a product that lacks an effectual tactic or scheme to deliver returns.
Decide on an apt app monetization scheme based on the following elements:
- What does your app do?
- How does your app add value to the user?
(example: Is it a simple tasks and “to-do” app)
- The degree of user-friendliness of your app
- The audience which it targets,
(example: Does it target a niche audience? )
- What are the monetizing strategies adopted by the competitors?
Like any other businesses, monetization is essential for mobile application business also. If you don’t want to get lost in the ocean of apps, building a unique and great app will not suffice. Crafting a plan to ensure sustainable stream of revenue is also essential. You can consult a proficient app development company to develop specific monetization strategy for your app.
Let’s have a quick glance at some of the proven and effective monetization strategies to make your app a decent revenue generator.
1. Charge Upfront Model or Paid Apps
Paid app means mobile users are required to pay money per downloads. However, if your app belongs to a Niche area or is a necessity, then you can charge upfront for the app. In the paid app model of monetizing, you trade your app for direct cash in Google Play or Apple’s App Store. The idea of charging a one-time fee for download might look simple with the up-front cash you would be receiving for every download. However, when you are entering the market with a new app, the concept of paid apps might not work in your favour. Because, your prospective customers do not have any idea of the app’s usefulness, and the app lacks reviews from users. In this scenario, paying even the minimum amount to buy an app will act as a mental barrier for customers. Unless they are convinced about the ultimate newness and distinctiveness of your app, they cannot be barred from opting for the freely available competitor apps.
2. Freemium Model
Freemium model of app monetization refers to gated features that need payment. This is a very popular model. Above 90% of the apps in app stores are Freemium apps. A Freemium app is offered for free. But there are certain advanced features which cost money. Most gaming apps use this strategy, by charging a small fee for additional levels etc.
The basic tactic behind this strategy is enticing your customers with a sumptuous peep into the features of app, without revealing everything to them. You keep them engaged and addicted until they are ready to shell out money to access the premium and proprietary features (or supplementary in-app tools) that were gated or blocked. Your decision regarding the number of free and gated features/functionalities should be judicious to attract more paid downloads.
You could use this model if
- your app is about gaming / accounting
- your app in its basic version itself is engaging
- You have features which are ‘juicy’ for the user, and could easily be charged
- You enjoy large user base and long app sessions
3. In-App Advertising Model
Here in this model, your app is free, but comes with advertisements. When it comes to integrating advertisements in your app, you are faced with a plethora of options to choose from. There are many ad networks and you can select and download the SDK (Software Development Kit) of any of them, and deploy a mobile ad of the chosen format from the options. Many of the apps in your own smart-phone might have implemented this model. In in-app advertising model, you give a good quality service through the app and give it for free. As your user base expands, the revenue you get from the ads increase. An example is Facebook, which leverages their huge user-data to publish precisely targeted ads. Since downloading your app is free, mounting up and retaining a substantial user base is uncomplicated. The ad software incorporated in the app congregates and organizes information related to the app users, and send targeted ads to the user’s device. The ad networker uses the app as sales channel, and pays the app developer according to some agreed upon conditions.
In order for this strategy to turn successful, the app developer should act prudently, while selecting the type of ads. Ads should avoid visual clutter, and its appearance should feel as a natural part of the overall experience. Interstitials, Banners, App Walls, Video Ads, Geo-Targeted Advertising, etc., are different types of ads available in the market.
Proper care should be taken to prevent ads from infesting the intrinsic value of the app and adjourn the engaged users from using/downloading it.
4. In-App Purchase Model
This model allows users to do in-app purchases of physical/virtual goods within the app. Your app can be downloaded for free, but it enables the users to make in-app purchases of items. This helps you to gain and retain earnings. The items can be real goods like garments or accessories in the case of retail apps, or extra lives or clues or currencies in game apps. It can also include added or improved features and tools, deeper content etc. But customers should feel like spending money within your app as convincing and natural as possible. Gaming/retail shopping apps are the best options to make use of this monetization strategy.
5. Subscription/Pay Wall Strategy
Selling subscription to your content or digital goods is a popular monetization strategy embraced by most of the online publications/streaming services. It is similar to the Freemium Model as it blocks some of the content in the initial free trial stage. Access to the full content is enabled when the user pays for the subscription. The main advantage of this scheme is the inflow of recurrent revenue for the app developer. This monetization strategy is more apt when your app is content-driven (for E.g. music, news, entertainment apps) and necessitates regular use.
6. Partnership and Sponsorship Strategy
Striking partnerships with reputed sponsors or brand advertisers is a sure-shot scheme to monetize your app successfully. But this supplementary monetization scheme can be fruitfully implemented by app developers who own an excellent app with impressive amount of traffic. You, along with the partner, can build an integrated experience for the customers if the customer base shares similar characteristics. You can charge a referral fee for incorporating their products/offering into your app.
7. White Labelling Code Strategy
Selling your app’s source code to other developers who want to re-skin the app to their taste can be a source of earning quick income. This enables you to earn revenue without making your users pay for your app. This allows the users to enjoy continual and smooth access to your app. Buyers can also derive value from your app code since it saves their time and money from writing code from the scratch. They will apply their own brand and identity to the re-skinned app, and will be selling it as their own. By licensing your code to other developers, you are not selling off your IP. You will be putting numerous slightly tweaked different versions of your source code in the market place. White labelling is possible if your app is very powerful and useful and is gaining substantial users with the free model.
8. Concrete Content Strategy
There is a popular misconception among app developers that content is not directly related to churning out income. Content can impact the monetization part of the app, by driving more prospective downloads and clicks. Content should be crafted to engage the user proficiently with information, service, or entertainment. You need to populate and update the app with great and winning content. Launching the app is just the beginning of the entire process. Vibrant and fresh content adds business value to your app, and acts as a convincing tool motivating the customers to return to your app. In this way it helps in generating revenue.
9. SMS Marketing Strategy
SMS marketing strategy should be incorporated as one of the monetization schemes of your app. Sending SMS alerts and messages can be part of the game since it is effective, simple, customizable and broad-reaching. Consumers consider it as a great convenience as they get updates on things that interest them. Mobile app brands and companies can keep their customers alerted and engaged by informing about promotions, enhancements, contests, etc.
10. Blended Model Strategy
Choosing the right monetization model for your app can be daunting. The bottom-line of Blended Strategy is that you need to invest time and resources in more than one strategy to reap the desired results. Craft a perfect strategy that is a right blend of some of the schemes discussed above, because you cannot find a ‘one strategy-fits-all’ solution.
App development has come of age. Millions of apps are out there competing in every segment you can think of. Be clear on your app’s USP, use all available channels to make your app visible and never compromise on quality. For a good professional with practical insights, making money should not be a problem, provided he creates a good clientele and service them well.
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