It is a common myth that after developing a mobile application one can become enormously rich. It is not untrue that you wouldn’t be able to make money through a mobile app but getting rich will definitely require a lot of effort.
A very few people are aware of this fact that half of the mobile app developers were below the so-called poverty line and only 5-6% of the venturers achieved the success of earning $500k+ per app per month. Truth is bitter but we can’t whitewash our readers. Instead, we will tell you how you among the developer of this small percentage and can earn a good amount of money through your app. However, you have to ask a few questions yourself before continuing to read this article. The questions are:
- Why your app is unique from its competitors? Do you have any innovative ideas or you had made a better version of an existing solution?
- What is your target audience?
- For what features the users of your app would be ready to pay?
- Is there any scalability in your app? How will it grow in the future?
- Have you taken account of your competitor’s money-making strategy?
- How much you can spend on mobile application development? Are you ready to pay for its ongoing maintenance?
Having answers to all these questions is a prerequisite before knowing the way of making money through your app. In this article, we would be considering the best mobile app monetization strategies. So after reading this article, you would have a clear idea of how to make a good profit on your first app.
Introduction
The monetization strategy of your app begins during the development cycle of your app. You have to decide how the features should be implemented in your app by which you would be able to make money. Don’t think just after implementing a paid feature you will ask the customer to pay for it and they would be ready to pay. No customer will pay without finding any benefit for that feature. The best strategy is to make a combination of different monetization strategies and implement them during the development of your app. Let’s discuss each monetization strategy in detail…
Paid Apps
The idea of developing an app to make money is often the first step in mobile application development. A developer believes to implement attracting User Interface, interactive user experience, outstanding features and functionalities, and unicity in the app. Hence, if you feel that you have developed an application that is worth paying for, you can set a price to it and make it a paid app. The best thing about this is that you will earn money whenever a user downloads it. However, you have to give some percentage to the corresponding app store. But you should give careful thinking over it because a user doesn’t easily get ready to pay for an app.
But there are tactics that you can follow so that the users will get ready to pay for an app. For e.g. you can set the price of your app to the lowest i.e. $0.99. A user may get ready to pay almost 1 dollar for an app to get better in comparison to its free alternatives. The con of this strategy is that you will require a huge number of downloads to compensate for your development cost and earning profit.
If you want to know which applications come under the category of ‘$2.99’, then check out this page on Google Play Store. You will get a good idea of apps falling in this category. You will find out that most of the apps are games, co-branded apps, web services, and reality shows.
Freemium Model
As the name indicates, a Freemium model is the combination of two different models, these are “free” and “Premium”. In the freemium model, the app is free of cost. The users can download the app without paying any money but can access its premium features by paying an amount. In simple words, the users can use the free version of your app or on a trial basis but if they like the app they like the app then they can pay for the premium features as well. For e.g. in most music streaming apps the users can listen to their favorite music but they can’t download the songs. Also, there are advertisements on the apps. If they wish to access music offline and have no advertisements they can subscribe to the app by paying a certain amount.
This mode is most popular among mobile game developers. The best example is the popular game Angry Birds. A user can download the game app for free and play up to certain levels but to continue playing user has to subscribe to the app.
You can also opt for an MVP model and an advanced model. In the MVP model of your app, you will include just basic features essential for the overall functioning of your app however in the advanced model, there would be best features and functionalities for better user experience. You can go through these pages to know how Google helps Android mobile application developers and Apple iOS app developers.
Some of the popular examples of apps built on this strategy are Spotify, LinkedIn, Trello, Angry Birds, etc.
Things you should know while developing the Minimum Viable Product (MVP) of your app
In-app Purchases
It is obvious that you will have a complete idea of your app before its development even begins. You know what are you going to develop, a game, or a video streaming app. If you are developing an app that involves selling goods, then you can leverage the in-app purchase facility of an app. There are two types of goods in the app, virtual goods, and physical goods. Let’s know the difference…
Virtual Goods
If you have ever played games on mobile then you must have observed some stuff on the game is paid for which you have to give real money. The common examples are virtual coins of games, buying cars in racing games, etc. The others are:
Upgrades: If the protagonist character of the game needs to upgrade you have to pay for it.
Consumables: Gamers can spend money to buy new guns, garments, ammunition, to improve their avatar in the game.
Currency: As mentioned above, there can be virtual coins or other types of currency that, you can get in exchange for real money.
Apart from the mobile games the other examples of the app using this method are magazines, subscriptions, newspapers, etc. Don’t overuse this feature as it may lead to an increase in the bounce rate of your app. The tactics should be rational.
You can incorporate virtual selling on your app without involving any third-party and with the help of SDKs of the platforms. Go through this link for the Android app and this for iOS app.
Physical Goods
It is obvious that physical good implies selling real items that the users can touch and feel. It is most mCommerce apps where the admin can sell clothes, shoes, gifts etc. The user buys a product, make a payment, and the order gets delivered. Admin makes a profit by selling the product.
Some of the common examples are Amazon, Flipkart, Myntra, etc.
Read How to integrate payment gateway on your app?
Selling APIs and Codes
Well, this model is quite uncommon and is an alternative one.
Selling APIs: As you have developed an out-of-the-box app to solve different problems and incorporating unique ideas. You can provide your APIs for free but making them paid would be great for earning extra money.
Selling app: Sometimes, when the app is not scalable and the idea has become obsolete then instead of closing your app you can sell its IP and code on Apptopia. So, in the end, you will have some money in your account and your efforts didn’t go in vain.
For developers (mostly): If you have developed something astonishing, and you don’t have time or resources to go through all monetization strategies, then you can opt for a platform like Chupamobile. You can easily get a reward through it. You wouldn’t have to sell the IP of your app but publish just the source code of it so developers can make corrections if required and do what you’ve receded from.
Well, it is not the end, there are many other app monetization strategies that we would be telling you in our next article, “Part 2” of this article.
