Do mobile apps make money for business?
Let’s face it, you’re not just building apps for fun. Building apps is a business and you need to earn money to keep going. But, with a number of options available for monetization, what tactic should you adopt for your app?
Being clear about the monetization model from day one will help to prove that your customers are willing to pay to solve the problem you’ve identified — a crucial part of validating the app idea.
There are largely three pricing models that bring in all the revenue.
If you launch your app using one of these monetization models, you have a greater chance at making more revenue than any other model.
1. Freemium for apps and games.
A freemium app or game is offered free-of-charge to the user with limited features, content or virtual goods. Users can access a premium version or additional content and feature through in-app purchase. This route has also been used for subscribing for monthly content updates. The free app or game with an in-app purchase removes the price point as a barrier for people to download an app and gives the developer the opportunity to prove the value of their product.
2. One-time paid apps.
Users pay just once to download the app. Updates and feature additions are expected to be free.
So how do you determine whether your app should be a paid one? Most paid apps offer the core value in the first download, followed by minor additions or design and usability enhancements.
3. Paid apps with added paid features.
This is a hybrid monetization model that has gained traction fairly recently, but not with its fair share of criticism. Many feel it’s unfair to pay to download an app and then pay again to avail more features. It’s tricky for you to build on this, but done cleverly with a value proposition, it can certainly work, and has been, going by the numbers.
4. Free apps with advertising.
You only make money when a large number of users download and use your app on a very frequent basis. So choose this model for monetization only if your app calls for prolonged usage frequently, such as the one above.
While there are many options to monetize, the way to achieve any kind of revenue growth through the years is through repeated transactions from existing customers as much as through new ones. The lifetime value of your customer will determine whether the app is a hobby or a business.
Have an idea for a mobile app?
Want to know more about how to make money from an app? Contact Granata Digital on 0409 621 823 for a free consultation today or send email to firstname.lastname@example.org & let’s take your business to the next level.