Choosing the right app pricing strategy is highly important to ensure your mobile app generates good revenue. There are many types of pricing models for an app. Each model has a specific strategy to help mobile apps earn money effectively.
But not all strategies fit your app. It depends on the type of app and your business goals to decide which app pricing strategy suits best.
Many high-grossing mobile apps have been able to produce huge profits due to their effective app monetization model. So if you are developing a mobile app for your business you must know how to choose the best pricing strategy for your mobile app.
Being a mobile app consultant, I know where most app founders make mistakes while choosing it. So here I will share some very important things to help you in this aspect.
But first of all,
What is meant by pricing strategy?
App pricing strategy is to create a method to enable a mobile app to earn money. It is an app monetization method that determines how the mobile application would earn money and generate revenues. There are many app monetization models or pricing strategies for mobile apps. Each method is unique and provides different capabilities to assist the app to produce profits.
The method of app monetization or pricing has evolved drastically over the years. Especially after the launch of App Stores, new app pricing models have come into the market. Below are the popular app pricing strategies which are currently prevalent in the market.
Types of app pricing strategies
Freemium: Best for a highly competitive market
Freemium is a popular app pricing strategy in the market. This app monetization model has been used in millions of mobile apps. Freemium model allows users to download the app for free. But it only offers limited features and services for free.
To use the additional or premium features of mobile apps, users will require to pay. Freemium app pricing strategy is used to offer a trial or basic features to users and inspire them to use the paid services. Best mobile app development company mostly adopts this model in their mobile apps.
Free: Best for creating a large user base
It is one of the most widely used pricing strategies in the market. The free mobile app pricing strategy allows the app to download for free in the app store. It offers many features and services for free.
This app monetization model is mostly used by businesses to offer the extension of their product to their customers. Free mobile applications work as an effective method to create a large user base quickly and retain customers for a long time.
Paid: Best for taking competitive advantage
This app monetization method asks users to pay once in order to download and use the app. Paid model was used earlier. But due to the emergence of free and freemium models, the popularity of paid apps has decreased.
However, there are many mobile apps that have generated huge revenue through paid app pricing strategy. But it is mostly suitable for users who are more likely to pay for using premium features.
Paymium: Best for less competitive niche
Paymium is the combination of paid and freemium models. It asks users to pay to download the app and offers some limited features for free. But users again have to pay for using the additional or premium features of the app.
This model is, however, not very much famous. But it is still being used by many app creators that provide high-quality services, rich content, or advanced features.
So you have understood what are the pricing strategies which are used in mobile apps. Let’s discuss
How to choose the best app pricing strategy?
To determine which pricing strategy suits best to your mobile app you need to consider the following things
1. Test your mobile app at different prices
One of the best ways to determine what piercing suits your app is to test it on different price ranges. You can launch your app as a beta version on different charging rates for either downloading or using any services or features. And chose how customers respond based on the variations of app pricing.
This testing could help you find potential pitfalls in your app monetization model or revenue stream. It allows you to get a clear idea of what amount exactly suits best that attracts users and helps in generating sustainable revenue.
2. Ensure the value of your product is greater than the app pricing
Customers always seek a good reason why they should pay for using your product or service. If your app asks for a considerable amount of money then customers would think twice as to why they should ultimately pay such an amount to use your mobile app. Therefore, you should ensure your mobile app must provide value through its in-app products or services.
Your mobile app should offer quality features or services which make customers feel their payment is worth your product value. And if they find your app truly gives them good value they will be ready to pay no matter what amount your app asks for.
3. Give what users want
Mobile app is after all a business-oriented software product. People will consider using your app when they find it useful. They really don’t care about what pricing strategy your mobile app has. Customers only expect the app must solve their ongoing problems or offer them good features.
Therefore, you should focus on the quality and capability of your app and how effectively it solves consumers’ problems. If the app offers them what they really want, your app pricing strategy will successfully produce good ROI.
4. Pay attention to the market demand
You can easily determine the pricing of your mobile app by understanding the market demand. You should see what pricing range is generally sought and has high demand in the market. For this, you can take a look at your competitor’s mobile apps and what price they are charging from their customers.
Setting the price based on market demand will allow your mobile app to make a user base easily. Thus, by understanding the market behavior you can decide the right pricing for your app.
5. Users expect high from paid mobile apps
If you choose to adopt a free or freemium model in your app then you can start easily. But if your mobile app is paid for, the user’s expectation will be high. Paid mobile apps are generally designed for a specific class of users that are ready to pay for using premium services in the app.
It is because paid apps provide high-quality services, unique features, and functionalities that are usually not available in free apps. Hence, your paid app must offer them high-quality products or services, and unique features.
6. Fix a reasonable pricing
Mobile app development costs a lot. Most app creators try to compensate for the cost by setting high pricing to quickly recover their investment. This approach hampers mobile apps to gain a sufficient user base. As a result, the app even sometimes fails to produce profits. Hence, when you set a price for your app make sure it is reasonable for your customers.
Don’t try to be in a hurry. Unreasonable high pricing won’t bring good results unless your app really provides high-class and rich features. Reasonable pricing helps your app establish trust and generate sustainable ROI.
Choosing the right pricing for mobile requires many factors to consider. You need to see what value your app gives to users that compel them to use your app. You should set the price considering the standard of your app features and other aspects. So when it comes to deciding the best app pricing strategy you should first release a freemium app. And later then, you can increase the price tag based on customer response.
However, you can also go with free and paid methods depending on your app features and business goals. But it takes a good understanding of the market and capability of the app. To make the right selection. Therefore, you should try to consult the top android app development company that can help you create the most effective pricing strategy for your app.
About the Author
The author is a mobile app consultant at MobileCoderz-a top-notch digital transformation company that provides world-class web and mobile app development services to global businesses. She provides expert consultation on mobile app development to startups and app founders. Her experience and immense knowledge in mobile app technologies have made her a leading person in the industry for building business strategies for mobile apps. Aside from this, She is a tech explorer and a leading guest author on popular sites