Choosing a model of how you will offer app to your potential users can be very ambiguous. Do you want to charge for each download? Maybe you want to develop free app which can be upgraded (freemium)? Or maybe you are considering monetising it differently, e.g. by in-app advertising?
As easy as it may sound, choise is crucial and can affect entire future of even the most brilliant product. On one hand – paid apps are considered guaranteed revenue from the moment they launch, but on the other hand price tag can scare off potential users browsing the store – no one likes to buy cat in the bag.
Let’s have a look at some things that might clear this up a little bit for you.
What is the purpose of your app?
If you are lucky enough – this is the only question you should answer. There is great chance that business app user will find in-app advertising irritating and would consider paying for it in the store. However, gamers would most probably prefer to download it for free, prepared to just ignore the ads, click them to discover other games or simply upgrading after they see the app is worth it.
The whole point of an app should be to allure users and provide oustanding user experience and because of that, you should consider if they are willing to pay for it. Keep in mind things that affect it directly such as demographics or loyalty.
What is your revenue model?
It is quite obvious that your app will be more popular if you make it avaible for free. It will help achieve major victory in development world, which is breaking the psychological barrier – price. There are thousands of great free apps with awesome UI and various functionalities and if you decide to make your app a free one, you will join this competition and could leave paid apps far behind. Less paid apps are developed now than ever before.
But in order to do that you will have to earn money by creating revenue model where there are advertisers, in-app purchases or content providers. Number of users is directly connected to revenue then and of course you can get more users by offering your app for free.
App will not be always sustainable revenue
This is really important thing to remember – no matter how much you will charge ($0.99 or 100$), a price sticker on your app will be only one-time payment. Even widest user base won’t change the fact that the revenue you can get will be hard cap. No one will pay for the same app twice.
However, if your app is free you will not generate revenue up-front at all.
Deciding to offer a free or paid app is difficult and has been causing headaches for quite a while now. In app development keeping your user happy is most important, so you should find a balance between that and your business needs.