Appszoom for Developers

The paid, the free and the freemium – Part 1

Posted by Ben Dickson on Feb 23, 2016 12:00:00 PM
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As a developer, I have to say that one of the most rewarding feelings is putting the last lines of code into an app and having it published on app stores, where eager users start to download it. Developing apps in itself is a passion for all dedicated developers. But if you can’t make money off your app, you’ll end up having to find some other (boring) job that puts food on the table, and file away app development as a pastime better left for holidays and weekends.

As every experienced developer will tell you, monetizing apps is a daunting task. There are several models you can choose from, and each has its own challenges. Will you charge a one-time download fee for your app, or will you lure users in with free downloads and offer them paid features or premium account options? Orwill you remain toll-free and rely on content providers and ad delivery networks to gain earnings?

In this series, I’ll discuss each mobile business model and help you to decide which one fits your app best.

This post, the first of two parts, will focus on paid apps, including the market, key characteristics, and potential pitfalls.


 Let's get down to business: 5 Tips To Monetize Your Mobile App


Paid apps

Paid apps require the user to make a payment upfront before being able to install the app. However, know that there are many, many free apps out there flashing before your potential users’ eyes. It is oftentimes more likely they’ll be attracted to an app that offers similar functionality without charging for the download.

Nonetheless, there are several scenarios where paid apps are more likely to succeed:

  • Unique utility apps: If you’re offering an app with a specific useful functionality, such as a specialized health app, a very cool photo editing feature, an app that leverages your iPhone’s GPS and compass capabilities, or an app that is more likely to be used in an office setting as a tool for carrying out daily tasks, you’ll have better luck convincing users to spare a dollar or five to install your app on their device.
  • Apps that take after great hits in other domains: Exploding Kittens enjoyed immediate success after being launched on App Store, because it was building on the huge success of the card game that preceded it. If you’re building an app on a concept that already has a considerable fan base to begin with (maybe a mobile adaptation of a famous desktop software or the next Star Wars: The Force Awakens or Game of Thrones app), you can be more confident about users willing to pay for it before having tried it.
  • Niche apps: When you’re intending to target a specific audience and aren’t necessarily looking to top the app store charts, going for the paid model can make sure that only users who appreciate the value that your app offers will download it. A health app that is intended to be used solely by doctors and medical staff is a good example. This way, you’ll make sure that you won’t get fake downloads that don’t result in retention (or worse, result in abandoned installs, negative reviews, and imprecise feedback).

Knowing the characteristics of paid apps will help you better plan your marketing and engagement campaigns. The following points sum up the key properties of the paid app model:

  • Download rates are lower: With plenty of free apps filling app stores, users are less likely to go for the paid app right off the bat. So if you have previous experience publishing free apps, don’t feel crestfallen if your new paid app doesn’t get as many downloads after its release. It’s only natural.
  • Users will expect quality: Since users are digging into their pockets to pay for your app, they’ll expect quality in return. This means that your app has to offer much more than free counterparts, unless you want to turn down your users and make them regret having paid for your app in the first place.
  • User engagement is higher: Since users have paid for the app, they are more inclined to use it, and you can expect higher engagement rates in paid apps in comparison to free apps. This in itself is a plus from an app store optimization (ASO) point of view, and you can get more precise insights and data from analytics tools, if you’ve got one installed on your app.

If you’re considering going with the paid model, here are a few points that can help you avoid the pitfalls of the paid apps:

  • Don’t ask for more: Mobile users tend to view paid apps as an “All you can eat” bargain. You pay once at the entrance, and you can use it without limit, save for the very exotic and special features. If users have to pay both for the download and in-app features, there’s a great chance they’ll get frustrated and abandon your app. There are very few apps, such as Afterlight, that actually manage to pull this stunt. But those are the exception to the rule, so I wouldn’t advise you to follow such a model unless you’re very sure of what you’re doing.
  • Don’t even think about in-app ads: Putting ads in paid apps is one of the worst mistakes you can make. After all, users have purchased your app to have a seamless and uninterrupted experience. If their experience is broken by noisome ads, they’ll get angry and feel offended, especially if they get the impression that you’re trying to make more money off their usage of your app. The result – the same as before: disenchanted users, abandoned apps, uninstalls, spiteful reviews…
  • Boost your download cycle: Getting top rankings in app stores is perhaps the most effective factor to improve acquisition rates, but it’s a difficult feat to pull with paid apps, since free apps are usually topping the charts. In order to make up for the lack, you should consider paid advertisement to improve your app’s visibility and increase download rates. An alternative would be to do what these 8 apps did, which is to offer the app for free for a limited time.

Bottom line

This wraps it up for paid apps. All in all, they’re a little bit harder to manage, but it’s not impossible altogether. There are many successful apps that are following this model, and if your app really fits the market, with careful planning and marketing, you can make it happen.

In the next post, I’ll talk over the freemium and free models.

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