The mobile traffic is quickly starting to overtake the desktop one. As we’re moving to a more mobile world, building an app represents a great opportunity for business owners. However, before you think of your development, you need to figure out your mobile app monetization strategy as it will play a key role down the line.
Your potential revenue will vary considerably based on the monetization strategy you pick. While some models, operating systems and industries generate more revenue per user than others, you should always choose with your user base in mind. We will highlight three of these key strategies in this article.
The Subscription Model
It’s most likely that you’re already familiar with this strategy as it’s present in every streaming app on the market. This business model is quite simple to understand: a user downloads the free app and often starts a free trial. Once the trial is over and the user is hooked he starts paying monthly, or even yearly subscriptions to access all of the features and content of the app.
The subscription model is considered to be the most reliable monetization strategy in the long run. Your users can access the app only if they pay a recurring fee, resulting in a steady stream of revenue each month. This is very different from the other models where the money is being made irregularly.
Subscriptions will also increase the engagement of your users as they feel obliged to use the app to justify their purchases. However, this model is only ideal for businesses that are centered around providing content, apps as a service or apps that are meant for daily use.
In-app purchases represent a model best suited for businesses that want to sell different goods and services, or one-time upgrades to the app’s functionalities. They are very different from subscription models that give users full access to all of the features.
This strategy is usually found in mobile games. The users can buy access to a single feature, skill or gaming item that they would have to work hard to obtain otherwise. The game can be played without in-app purchases but it will take longer. This model is so successful because it gives users instant gratification and it saves them lots of time.
The Freemium Model
The freemium model gives users access to a limited but free app with an extra premium version available for purchase. The free version of the app is limited but it still has to pack value to draw people in. You’ll need to find the ideal balance between giving too many or too few features for free.
The free version has to be helpful but at the same time painful to use when compared to the premium one. You’ll have to justify the upgrade from a free to a premium version by clearly stating the extra value received for the user’s extra fee.
Finding a reliable monetization strategy is as important as figuring out your app’s features and the main development framework you’ll use. We’ve covered three fundamental strategies in the above article. You don’t have to limit yourself to only one of them but make sure to always pick with your business goals and future users in mind.