Developing a great mobile app with a unique proposition is an excellent idea for any business. However prior to the planning and development stage one should consider the ways how to monetize an app. Yes, every entrepreneur needs to know exactly how to generate revenue from their app from the very beginning. All follow-up planning comes next.
Of course, you can think about the monetization strategy even if you already have an app but it’s yet to be monetized. Adding a few tweaks into the code is not that hard for a development team. However upfront planning is always more preferable.
If you are afraid that once your app gets monetized nobody will download, don’t be. There are a lot of monetization strategies that suit different types of apps.
Regardless of your situation you can choose one of the most popular monetization models:
- Paid apps
- In-app purchases
- In-app subscriptions
- In-app advertising
The main distinguishing feature of the paid mobile apps is that the user has to pay for the app in order to download it. The advantage of this model is that you receive the payment at once and can be sure that the users will stay loyal as they have already made an investment. The bad side of this strategy is that many users don’t want to spend money on apps thus they won’t be interested in your app. Also you can’t charge users afterwards as they already paid for your app. So this is a one time revenue. Needless to say that app stores take away a sizable amount from your income as a fee.
If you want to take a safer path than you should consider building a free app that offers advanced features or items for additional payment. The first type of play-now-pay-later apps comprises in-app purchases. They come in different forms – a personal meal plan from a fitness trainer, a rare item in an RPG or upgrade to another level. By implementing such strategy you will give your users an opportunity to download your app for free and pay only in case they want more features than free version offers.
In-app subscriptions are very similar to in-app purchases though there is a key difference between them. In the first case users buy additional items and this a one time thing. In the second case, subscriptions allow users to try on more features on a regular basis in exchange for their money. You can offer your users several tiers of subscriptions at a different price. Let users choose which plan suits them better.
In-app advertising is by far the most popular way to monetize a mobile app. As people spend half of their time on the phones, ad publishers accumulate all their resources for their ads to be shown within the mobile apps. It can be a banner, a pop up or a short video – the form doesn’t matter. What matters is that ads can severely spoil the user experience. This can lead to the decrease in download and high abundance rate. Usually app owners try to compromise in order to satisfy users while still profiting from the app.