You have created a brilliant app. You are keen on monetizing your app. You are unable to make up your mind as to whether to list your app as free or paid in the app store. If these statements reflect you then read on. You will be detangling the paid vs. free app knot after reading this.
App owners face the dilemma of choosing between two perplexing options: whether to release their app as paid or free. Both free and paid apps come tagged with certain advantages. After analysing these two options, you should be able to choose the option that works best for your app.
Difference between Paid Apps Vs. Free Apps
Paid apps involve a straightforward monetization process, wherein mobile users are required to pay money per to download the app. This is the ‘charge upfront’ model where you are getting paid by users, however with 30% of the price being taken by the app store.
Free apps are freely available from app stores, and users can download them without paying anything. In order to generate revenue from the app (or monetise the app), appreneurs (app entrepreneurs) have to resort to different app monetization strategies for instance, freemium, in-app advertising, in-app purchasing, subscription, etc. In simple terms, in the case of free apps, app developers are getting paid by advertisers or in-direct/less-explicit methods.
About 90% of iTunes App Store Apps are free, while 6% are available for just US$0.99. Source. According to a report by Statista in 2012, approximately 57.33 billion free apps were downloaded on mobile devices worldwide. By 2017, download figures for free mobile apps are projected to reach 253.91 billion. The report also states that many mobile gaming apps are relying on the freemium monetization model, whereby players can experience enhanced gaming elements by purchasing additional digital content.
How to Decide Between the Two?
Charging upfront for each download seems like a good and straightforward idea; but remember that users are growing less inclined to pay for an app – even as little as $0.99!
By offering your app for free, you are exhibiting confidence in your app. It is even more useful as it will users glued to your app, and thus this userbase can be used if you decide to pick up monetisation schemes in the future.
Releasing Your App For Free? Consider These Points
Free apps generally get more downloads than paid apps. But the going might get tougher after the initial excitement.
1. People just love free apps
There is no need to bang your head on people’s logic. It is simple. The term “free” gives users an emotional charge. It motivates them to perceive a free product as something with immense value. When people find that there is no barrier to entry (price), they will not deeply contemplate on the actual value of the product or service. But make certain that your app is useful and exciting enough for users to download. If they do not feel engaged with your app, they may delete it after the first use. Remember that it did not cost them anything. Great apps will keep their users hooked on and may even convince users to shell out money for purchase upgrades.
2. Take the purpose and audience of your app into consideration
As you know, advertising is one of the money-making sources of free apps. But you need to take the nature and purpose of app into consideration while allowing ads. If your app is business-related and your target audience is professional in nature, they may find in-app advertisements an intrusion to their app engagement process. But users of a gaming apps are less inclined to have any irritation towards in-app advertisements. Whatever be the case, do not scare away users with excessive ads at irrelevant places.
3. Don’t give away too much value
If your free app manages to garner more audience and downloads than a paid app, revenue generation with advertising is a great possibility. Ensure that you are not giving away all the features freely in the beginning. Users should enjoy the functionality of your app in a limited context. Integrating in-app purchase capability will work in your favour, once your app picks up.
4. Integrate a well-planned revenue model
We all know that free apps do not actually mean they are free. Though clients are not charged for using the app, advertisers are shelling out money to pay the app developers. Integrating a well-thought-out revenue model into your app is vital to get money out from it. In-app purchases, in-app ads, gated features, subscriptions are some revenue models that can be integrated in to your app. Remember that revenue depends on the number of users. More users mean more downloads and more revenue; and hence make your app free to get more users. Remember that more downloads will not turn into revenue if there are no revenue models in place.
5. Consider your competitors
Check whether if similar apps are free or priced. If similar apps with similar quality and functionality are available for free, there is no logic in offering your app as a paid one. You also need to consider the business models that your competing apps are leveraging on.
6. Reviews and feedbacks
You should not belittle the importance of reviews and feedbacks for your app. They can actually do wonders in enhancing the rank and downloads of your app. By making it free, more people will download and use your app. If they are impressed by the real worth of it, they will wholeheartedly post positive reviews in app stores. Try to enhance your app’s functionalities and value by adding the requested features. Watch for the favourable moment to change your monetisation tactics by adding in-apps and freemium features. It is a good decision to release your app free if you are aiming to get more users and more positive feedbacks. Good reviews will help you in optimising your app for the app store (ASO).
7. Do not expect user loyalty
App stores are flooded with thousands of free apps, and do not expect your users to stick on to your app for a long time. If they come across a better option, they will readily shift their loyalty. The reason is that users download a free app with fewer expectations, and hence easily delete it when they feel less involved. But remember that your app is still free and there are thousands of other prospective customers who will use it.
Releasing Your App as Paid? – Consider These Points
Paid apps can cost anywhere between $0.99 to $999.99. It is becoming less popular due to the swarming presence of freeemium apps.
1. Your app should stand out from the crowd
You can release your app as a paid download if it excels from the rest of the apps. People will be ready to pay for an app if they are convinced about its unique features. Apps that add significant value with matchless features and functionalities can easily go as a paid app. Apps targeting premium customers are also good candidates for the paid type.
2. Give a spellbinding app listing
Remember that your app is being listed in the overcrowded app store. Therefore it is mandatory to make the presence of your app catchy with killer screenshots, description, five star reviews, etc. Describe the professed value of your app and its exceptional selling features in a conclusive manner to persuade people to download it.
3. Compare the price and functionality of competing apps
Analysing the competitive scenario is important if you want to identify the real value of your app. Observe the functionality and pricing of other apps in the niche and price your app accordingly. If your app is superior to that of your competitors, paying subscription for a complete version of the product will not trouble your users much.
4. Paid apps have an air of genuineness
People perceive paid apps as something that has an air of genuineness. They expect something wonderful from the app; and hence will be ready to download. If the app is successful in giving the expected functionalities, you can have a loyal client base. People in superior niche who do not want to get distracted by intruding ads will prefer paid apps.
5. Offering trial period is a good option
If you know that your app is worth paying a price, but want to ensure substantial followers, it is worthwhile to offer a trial period for your app. Apps that serve specific business purposes can be charged after a trial period. People would want to try the app first before paying for it out rightly. If the objective of your app is just brand building and promotion, paid scheme will not work beneficially. For example, an app that is complementary to your business.
6. Sustainable revenue is not assured
We know that people will pay for a paid app only once, when they download it for the first-time. This might not necessarily bring in the substantial profits and sustainable revenue. Therefore it is advisable to find some effective monetisation options to maintain the income flow.
It is worthwhile to consult experienced app development companies to help you out with tailoring the best revenue and monetisation model for your dream app.
Making money from your app is not a cakewalk in both cases. It is inevitable to identify what works best for your app. Adopting a flexible stand in terms of app monetisation is a prudent step. After all, rolling out a brilliant app is most crucial.
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