January 16, 2017
If you have ever spent time and effort into building a mobile app, chances are you have spent an equal amount of time trying to figure out how you can make money off of it.
Several thousands of dollars go into mobile app development in terms of strategy, development, UI/UX, and various other aspects. There are, of course, several goals attached to taking up such an endeavor:
Whether you are going to mobile to simplify an existing task or to add gamification as a feature to keep customers engaged or for any other reason you deem will generate value for your business, tying it with revenue is the only way such an investment would even make sense.
Before embarking on devising an effective mobile revenue generation strategy, it is important to understand what works best for your customers, company, business objectives, and brand message.
In this blog post, we will discuss popular mobile app monetization techniques that you can pick and choose to build your own revenue generation strategy. Before we dive in, it should be noted that these strategies will have to be built into your app before it is launched into app stores. You can always evaluate and update your approach as you gather and analyze data. The goal is to build a robust business model for your mobile app without disrupting customer experience in any way.
In the freemium model, the app is offered for free in its most basic model. The user will have to pay money to unlock any additional features. The idea is to attract users with your app’s basic functionalities and get them using your app.It offers a great preview into your app and convinces them about the potential in paying for the premium features. Once your users are happy with what they are using, they will be happy to upgrade and buy the gated features.
This is, of course, self-explanatory. Basically, you are offering your app for a price in the app store. If users want to download your app, they will have to first purchase it from the app store. Brands make money from every download they get. The cost of apps ranges from anywhere between $0.99 up to $999.99. The slightly tricky part of this model is that you have to really be able to sell your app features. You have to absolutely convince potential users of the value proposition your app brings – whether it is entertainment, information, functionality or design. In order to establish the USP, brands must share screenshots of the app, user reviews they have collected so far, and write an extremely compelling copy in app listings to help it stand out amongst the crowd.
The subscription business model is quite similar to the freemium model. The only difference is that it focuses on gating content, rather than features. With those model, users can view a fixed amount of content for free. After this, they will have to sign up for a paid subscription in order to get access to more content. This model best suits service centered apps and enables brands to earn recurring revenues.
Ads are yet another great revenue generating strategy. However, it is extremely crucial to ensure that the ads do not disrupt the user experience in any way. Ruining customer experiences with irrelevant ads is the quickest path to app failure. Personalization and relevancy are key when it comes to ad success. Also, running ads allows you to gather a lot of important data insights that will further help you show your user’s hyper-targeted ads.
Sponsorships are quickly becoming a great revenue source for brands. The premise of sponsorships is to find and partner with advertisers to “sponsor” your app. The idea behind this model is to deliver customized rewards to users when they complete specific actions within your app. The subsequent revenue generated from these activities is then split between the sponsor and the brand. Sponsorships have proven quite successful in delivering a very high level of ad personalization, thereby maximizing customer engagement and revenue.
This is a great way to generate revenue from an app that you worked hard to build. You simply have to “white-label” your app when building it. Since apps consume so much time and effort to develop, a lot of brands are looking for “ready” structures that they can buy and build upon. Once they buy the app code, they can then easily incorporate relevant branding and start selling it to their customers. This is a great way to reap monetary benefits from your app!
Selling data may seem like the worst thing to do. But, in reality, there are legal and profitable methods to sell the customer data you will be collecting through the usage of your app. Even if you aren’t selling your data directly, it can still serve up some extremely relevant and beneficial insights that can be very useful in creating highly targeted marketing campaigns for existing customers.
Every mobile app is unique and therefore, your revenue generation model also should be unique to the needs you seek to address through your mobile app. The most important factor to keep in mind is to ensure that you are still delivering a seamless, enjoyable user experience to customers. You will not be able to generate any revenue at all if you’re bombarding people with annoying ads and forcing them to uninstall your app. Carefully consider the above-mentioned revenue models, as well as any others you may want to explore and find a mix that best fits your business objectives and brand message.
Questions? Comments? Please take a minute to share your thoughts in the comment section below!