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The Best Pricing Strategy For Your Mobile App Development: A See Through Guide
Mobile app pricing is the most difficult and critical aspect of mobile app development or when even opting for offshore software development. It is a must to choose the best pricing strategy if you want to get noticed in the app store.
However, there are many factors to consider when choosing the right pricing strategy for your app solutions.
According to a survey, it was found that around 30% or more of the traffic comes from mobile-based applications. Therefore, it is crucial to choose the right pricing strategy for your business or even if you are planning to opt to hire apps developers in India.
So, before we go into the depths of pricing strategies for mobile apps, let’s first dig into the basics.
What is Pricing Strategy?
Pricing strategy refers to an approach that you can use to monetize the mobile app. The pricing strategy helps you grab a better hold of your position on the app store and earn profit from your app. Here, the pricing strategy also helps you to decide the success of the application.
So, in case you are incapable to decide on a pricing strategy for your business, you may outsource app development or take the help of offshore software development services. It is because such service providers can provide you with a clear picture of all the features and will make you get acquainted with everything related to each strategy.
Types of Pricing Strategies for Apps
So, before you settle onto any of your mobile applications, you should know about the several types of application pricing strategies.
There are four types of pricing strategies, and they are:
Let’s mow learn about them in detail:
Free applications, as the name suggests, are completely free to download. Developers of such applications tend to earn profit from advertising. For example, Instagram, Facebook, and Twitter (these are a few examples of free pricing models in terms of mobile application). There is another group as well, that is free and is not dependent on just advertisements.
These apps are a little unique. The main aim of such mobile applications is to promote and get the users to join a larger platform to generate revenue.
Let us exemplify it a little for you- Such applications include features such as discount alerts, coupon codes, and more to encourage the users to take the desired actions inside or outside the app.
The idea behind developing such applications is to serve as a reference point and boost the marketing effort of your business. So, instead of making money from a mobile application through advertising, the developers offer an absolutely free app to highlight capabilities and get a hold of their potential users.
Pro Tip: To establish this approach you need to have a clear plan and then choose to hire someone to make an app.
The Freemium app is an advanced alternative to the free application model. This approach is quite popular and is most commonly used by several Android and iOS app developers of the industry. Since the freemium apps are free to download; it carries limited features and related functionalities.
In-app purchasing opportunities are developed to establish a revenue system from such applications. This pricing model has the three basic types, and they are mentioned as follow:
- In-app purchases: Here, the app is free to download. However, here the secret is that your users can only use the features by doing in-app purchases. This approach is widely used in the gaming industry, where the users have to purchase certain currencies, weapons, or upgrade themselves to additional levels.
- The second model offers premium functionality on a trial version for a specific period. The idea behind this approach is to give end-users the vision and utility of your mobile application so that they can avail the services further.
- The third approach involves applications with all the premium functionalities, apart from the built-in advertisements. Here, the users are charged a small sum for an ad-free experience while using the app.
Pro Tip: Freemium is best when you are in a very high competitive marketplace and your goal is to grab the attention of your users. Therefore, it is wise to outsource mobile app development.
Paid Pricing Model
Well, this approach requires a one-time payment to gain access to the app. The paid pricing model is one of the least common models available in the market. So, when there is a free app available with almost similar functionalities, the competition becomes more fierce and it is then a very risky battle to generate money for businesses.
Having that said, for certain applications, especially for B2B niche applications that are specifically devised for targeted use. It makes this model a viable approach to go for. The paid Pricing model is the best for health, on-demand service providers, legal professionals, and more, who really don’t mind paying up to use an app designed only for them.
Additionally, brands or industry leaders having a lot of loyal customers can also afford advertising for their paid mobile applications that provide a unique value proportion.
Now, there is one more model that many companies are opting for these days- the Paid Subscription Model. You can find several companies following this revenue model such as Netflix, Amazon, etc.
Pro Tip: The revenue is not directly associated with the user interactions. Such type of interactions is generally based on the reviews and ratings of your services along with digital trends you are following. Here, we recommend you to get in touch with the app development companies in India, USA, and Ukraine to get into the depth of this model.
The paymium pricing approach is a mixture of freemium and paid pricing strategies. The users pay for the application and an extra amount fee to use additional functionalities or features. This pricing approach has a great potential to generate huge profit, although it is not a generally used technique.
This pricing model works the best for music as well as social networking apps. If you have exciting content, updated functionalities, and user-friendly features, this pricing approach can help you gain momentum.
Pro Tip: The Paymium Pricing Strategy is considered the best when there is less competition in the market or the product offers a distinctive experience.
5 Tips To Choose the Best Product Pricing Strategies For Mobile App
Let’s now look at the various product pricing strategies and things that you need to know to make the right decision for your mobile app. The strategies are:
- Analyzing Human Behavior: Human behavior plays a crucial role in determining the price of your product. The customer is putting up with the speedy stride in technology. It is the rise in consumerism that drives the scope of advancements. Customers today are well informed and they are always striving to make a conscious decision.
For each product, there are various alternatives present in the market (that’s how this industry works!).- So, how do you make a customer choose your product?
Well, that’s simple, you must make sure that the observed value of your product is higher than the price. Customers should always feel that they are investing money in the right place. Therefore, tapping into this segment becomes much easier for you when your customer does have a reference point, to start with. Also, before taking any decision, we tend to compare everything services with its alternatives available around us and then access them for their advantages or services.
- Consider What Market is Willing To Pay: The right pricing strategy must revolve around what the market can pay. To find that out, you should set your product on a testing period and see how the market responds.
A mobile app comes with a recurring revenue stream. Therefore, to stay ahead of your competition, you need to add several new functionalities and update them regularly. It is crucial to holistically view the recurring revenue model and not worry about the revenue or price per point.
- Analyzing a Product that User Desires: A product should be developed to address the concerns of the user and it must provide them with the solution they have been looking for. When you build something that your users are really looking for, it is easy to decide the price and fees accordingly.
So, look for the factors that can improve the value of your mobile app and related solutions- with a stellar design and amazing user-journey.
To determine the mobile app pricing models you first need to understand what are the costs involved (Yes, even if you want to hire an app developer). This involves factors such as the value you offer, actual cost, and the greens you need to flourish it.
Having a sound knowledge of the market trends is also crucial and rolling out timely updates and adding the features to improve the functionality is the key when opting for the competitive model.
- Study the Industry to Identify the Competitive: Industry-driven pricing is a great strategy to reach up to an optimum price point for your mobile app. Studying the industry to know more about your competitors helps you to analyze your user-base. This can further help you to discover the opportunities where you need to put more effort.
So, understanding the market demand for an app or any other digital product and considering it from the customer’s perspective helps you to settle on the right price.
It is, therefore, crucial to know what makes your product special and the value it holds when compared to your competitors in the market.
- Paid Vs Free Apps: Decide, if you want your app to be free or paid, as it involves a couple of factors, such as the required amount of users. If you want to get a huge user base, it is a wise choice to go for.
With paid mobile apps, your users will expect more features, friendly navigation, and functionalities. However, they will surely not like paying every time there is a new update rolled out.
The app pricing strategies and the relative techniques are not as simple as it looks like. So, you just cannot think of an imperious number and hope that users like it. Instead, you have to pursue things holistically and understand how to determine the right price for a mobile app or any other digital product. Additionally, you should also think about the pricing and what you can implement to generate more revenue from the app right from the beginning.
It is essential to weigh in various factors before settling on a decision. Some of this involves the intent of the mobile application, your target audience, market demands, and the cost of hiring the mobile app developers in India, Ukraine, the UK, the US, or any other part of the world.
Also, it is equally crucial to study the market and perform a sound competitor analysis for a sound competitive landscape. Always test your app at various price points. Additionally. always ensure that the value you are offering to the end-user is greater than the price of the app. As pricing can be a little daunting, hopefully, this guide would have helped to understand things and put them right into action, as per your business needs and mobile app development model.