Choosing the Pricing Model Suitable for our Mobile App

The app developers are trying hard in this age of mobility to develop an app that will ultimately be able to help them in making money from mobile apps. Without monetization, the hard toil goes down the drain. The moment the app developer conceptualizes on an app idea, which will be providing value to the customers, the likelihood of paying for the app increases considerably.

One must have clarity on the monetization model that needs to be adopted. The revenue generated by the mobile app is dependent on your choice of the relevant tactics out of various pricing models. A major part of the revenue comes from the free apps which is 71 % of the paid revenues. The paid revenue have a share of 24 % and the revenue from the paid apps is the least with a market share of 5 %.

If the app developer adopts any of these above price models, there is an assured amount of revenue generated from these apps. But, before we proceed to discuss further about the pricing models, we need to have a clear idea about the differences between the free and the paid apps. A free app is that mobile app that is developed with no intention to making money from mobile apps. These are mostly the apps which serves the purpose of providing useful information. Examples are the local Government apps that will provide useful information related to emergency numbers.

Here are some more information about the three pricing models:

Freemium

A freemium app is a free version of the mobile app which offers free content or limited number of features or in other words the user is experiencing the app, before taking the decision to purchase it. In-app purchases will enable the user to access the premium version with advanced features. This is the most popular among the three models for monetization of app. The in-app purchases in Apple App Store fetches a revenue of 76 %. The Freemium apps works in three possible ways:

Restricting the access to the users and the users pay for additional features

Fully functional apps are available for a limited duration and once the user gets the idea about the utility, the user is asked to pay for further using it. Built In advertisements comes along with free features of the apps. Just a small amount is charged for upgrading the app to an advertisement-free version.

It is convenient to offer a free version of the app, when the customer will go for it willingly and the premium version also have an access to monthly updates through subscription. Another option is to offer the basic features all at free charges and a paid model for the additional features, based on monthly subscription or fixed charges.

Paid Apps with Added Paid Features

This is a kind of hybrid monetization model. The payment is taken while downloading the app and then another repeat payment for additional features of the mobile app. However, there are many critics of this model terming it as an unfair practice that the users are meaninglessly paying twice. The numbers prove it otherwise.

One-time Paid Apps

Most of the utility apps actually belong to this model type. When a paid app is launched, it needs an assurance that there is a compulsion on the user’s part to download it for the very first time. There is always a need to add new customers, with no additional monetization from the same existing customers. The advantage for the users is that they download the apps, only once. The downloaded apps will have the core values followed by the design and usability enhancements.

We have purposefully avoided to mention the free apps with advertisements in the above discussion. In this case there is free download and then it is followed by a harmless advertisement which does not intrude and stays till the app is in use. This is appropriate for prolonged usage that too frequently by large group of users.

The pricing model must be considered along with strategic planning. It is the strategy that converts your app into a success. Sometimes, you may work on permutation and combination of multiple models, to achieve the end result of monetization of the apps.

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