The big challenge, however, is deciding the price of the app. Different ideas such as if the cost of the app is high, it is possible that users will not use the app, but if the price is low, will not the money invested will not be returned.
Thus, in this scenario, pricing strategy plays a significant role in deciding the initial interaction and visibility in the app store. The success of mobile app development depends on the app price. And similarly, we can use the number of downloads to plan long-term user maintenance.
One of the most challenging and necessary parts of mobile app development is "mobile app pricing." It is essential to use the right pricing strategy to get your app listed in the app store.
Statistical analysis shows that 30% of traffic comes from smartphones and mobile devices, so choosing the right pricing plan for a mobile app is essential. According to market estimates, global app revenue will reach $101.1 billion in 2020. This is a massive market with good business opportunities.
The app market is now booming and is adding value to customers. Therefore, it is essential to understand customer psychology and develop a business plan that focuses more on premium pricing strategy to survive in such a competitive environment.
What is the pricing strategy for applications?
A pricing strategy is a set of guidelines that will help monetize an app. There are different types of mobile app pricing models in the market today.
This blog will present you with information about the most popular pricing models commonly used and the right way to choose a mobile app pricing model.
Popular pricing models for mobile apps:
To choose the suitable pricing model for your business, follow these guidelines:
First, you need to analyze the app development goals well.
Determine the target audience. Do you want to serve a broad user base or a narrowly defined market?
The cost of creating a mobile app should be well understood.
Marketing campaigns and business continuity need to be appropriately understood to achieve profit and goals.
Proper market analysis plays a vital role in standing out from the crowd. By analyzing the market strategy of competitors, one can conclude that the prices should be low or high.
| Freemium model:
In this pricing model, the app is free to download and install. If the customer wants to use additional features, subscriptions, or additional content available in the app, he can pay for it. In-app purchases can bring in extra money in paid subscriptions, removal of paid ads, and virtual currency, such as in the games Subway Surfer and Candy Crush.
More organic traffic comes with a free app.
Users can easily upgrade to updated versions.
Includes a variety of monetization strategies.
Users are highly engaged in the app.
High user engagement with the app is required to generate sufficient revenue.
Proper management of updates is required.
The high burden on developers is related to in-app features.
It can sometimes annoy users.
| Free model:
The name itself defines that one can easily download an application under the free model without paying any amount. To attract more users, this is one of the effective models which is widely used. Therefore, this model is an ideal choice to increase brand awareness and user base.
Generally, free apps are chosen by those companies that focus on redesigning products or services to improve their offer. Moreover, they can use these apps to engage customers and provide them with relevant information.
The number of downloads is higher.
Users' expectations of free apps are lower.
Most entrepreneurs choose this model.
There is no guarantee of revenue.
Users may be distracted by ads.
High user engagement in the app is required to generate good revenue.
User loyalty is low.
| Paid model:
This model was chosen by companies targeting customers who want a complete app experience without in-app purchases. In this model, users only have to pay once when they install the app on their phones. The app includes all functions and features together. This model considers being the least popular due to the high popularity of the free and freemium app models.
If you choose the paid model, you must have a strong background in marketing. To get users to buy your app similar to an app available for free in the app store, you need to develop an effective marketing strategy. In addition, there should be a detailed description of the app in the app store to make the potential customer aware of the value you offer with the app.
Users have high expectations of paid apps. Even if you succeed in acquiring users, they will quickly become loyal customers if they offer the expected value. Brands that choose this model use a free trial. It is the best way to reach long-term users by showing what the app is about and giving them choices.
A revenue stream was created.
Creates a base of loyal customers.
Increase user ratings.
Increases the number of users who want to purchase services:
Potential users are unlikely to be attracted by the price factor.
High user expectations.
| Applies to all users:
Applications under this model are a divine mix of the freemium and paid models. In this model, users must initially pay to install the app, but they also can access additional features and content by paying a different amount. Although this strategy is not widely used, it has the potential to generate significant revenue streams. The Premium model is perhaps best suited to the music, navigation, and social networking apps.
Payments are ongoing.
New thinking is needed to attract new users.
The number of downloads is lower.
Extremely high-quality content and regular updates are required.
A legitimate pricing model can undoubtedly bring amazing things to your app and your business. Moreover, choosing a pricing model for applications and evaluating them is extremely difficult and requires effort, analysis, and experience. In any case, you can be sure that your business will thrive if you do it right! If you are looking for app developers, many app development companies can help in building mobile apps for your business to give new heights.