As a mobile app development agency, Fueled has worked with a variety of clients to not only create apps, but also to market and sell them. We know that one of the hardest things to do after creating an app is deciding how to sell them. Our very own Lead Strategist, Ryan Matzner, provides a guide to pricing mobile apps, available on Mashable.
The average selling price for applications — across all platforms — continues to decline. Some of that decrease has to do with increased competition. But another big part of the decrease in app retail prices is the availability of alternative revenue streams for developers,” says Matzner. He breaks down 3 alternative routes a company can take to generate revenue besides up-front sales charges: freemium or lite version, in-app purchases, and in-app advertising. With a freemium, you can offer a free app with the expectation that the user will love it enough to buy the full, more advanced version. This works best for games, because, according to Matzner, “the use case for gamers that is more linear, and the paid version is just another step in the game’s path.” In-app purchases and advertising are also growing as methods of revenue, but Matzner warns that there must be a balance of how frequent and intrusive these are as part of the user experience.
Things to Consider with Paid Apps
Releasing a free app doesn’t mean you won’t generate revenue, especially if you utilize any of the above methods. However, if you decide to charge for your app, know that the price isn’t fixed. You can always set a higher price, slowly lower it, or tweak it based on customer reviews. Also, consider your target audience: Matzner notes that users in Asia “are significantly less inclined to download paid apps than their Western counterparts.” Lastly, take into account commissions refunds, such as the hefty 30% the Apple takes from each app sale via the Apple store.
Matzner concludes by saying, “Think of the app’s price as part of a wider revenue mix of in-app purchases and advertising” as opposed to relying solely on the initial sale price. Like any other product, there must be a balance between what users want and what they want to pay. You can always gauge this by reading user reviews and comments, and engaging your customer base.