A recent survey from Statista indicates that mobile devices currently drive almost 50% of the global web traffic. This explains why mobile app development companies are keen on investing in mobile applications.
When it comes to mobile apps, one vital element that concerns the majority of companies is their pricing strategy. Usually, it takes a lot of effort to prepare the blueprint for it. You might need to make several considerations to accomplish it in the right way. Both these factors are important for the success of the pricing strategy of your mobile app.
Have you been looking for ways to effectively plan the pricing strategy for your mobile app off late? If yes, this post will guide you through the steps to have the best pricing strategy for your mobile application in place.
The Main Types of pricing strategy
App pricing strategy refers to the plan by which you can monetize your mobile application. In other words, it is the blueprint by which you can make money using your mobile app.
Four types of mobile app pricing strategies include the following:
- Free: As the name suggests, a free mobile app provides features and functionalities to its users without charging a penny. App owners earn money from it through advertisements.
- Freemium: A freemium app is an application that offers both free and premium services. While the fundamental features of these apps are free, users need to pay a fee for using the advanced app features. Freemium apps have a dual monetisation approach; they generate through ads as well as premium features.
- Paid: Known for rich features, a paid app is a feature-rich app that comes at a price. A user needs to make a payment before downloading a paid app. Usually, paid apps have top features.
- Paidmium: A paidmium app involves the features of a paid as well as a freemium app. Though users are charged for downloading these apps, they get both free and paid features.
Now that you know what pricing strategy for a mobile app is all about, you might want to draw up the best strategy for it. Before you proceed further, you need to know that both the formulation as well as the implementation of an effective pricing strategy are essential for achieving success.
Steps to choose the right pricing strategy for your mobile app
Analytical thinking is necessary to make the right choice from the aforementioned options. By thinking analytically, you can strategise a model based on the suitability and aptness of pricing.
Sometimes your gut feeling might prompt you to make a decision. But remember that it may not lead you to a decision that will deliver you your desired result. Instead, you need to focus on the purpose of your app as well as your competitor’s efforts. A good understanding of both will always keep you and your efforts on track.
Also, include the following points in your scheme of things to choose the best pricing strategy:
Check the response of potential clients by testing your product at a wide range of prices
You might feel that your mobile app is worthy of a certain price tag. Also, you might have a revenue generation target in mind depending on it. But you will not be able to achieve it unless or until your customers are willing to pay the price that you want them to pay.
While you may not read the minds of your entire target audience, you can determine what the majority of them feel. The best way to do this is to check your mobile app at various price levels.
Find out which one works the best with your target audience. If you intend to widen your subscriber base, you could also consider offering your mobile app for free.
Attach a price tag to your product in a way that its value remains higher than its price
The price tag you attach to your mobile app will eventually boil down to numbers. Even if its pricing is high, you have no reason to get disheartened. Your customers might pay the price as long as the value of your mobile app is higher than the price tag that you attach to it.
By conveying the story of your mobile pricing well, you can convince your customers. For best results, present the product in a way that your target audience feels the pricing of your mobile app is fair and justified.
Ensure the design of your mobile application is in accordance with the needs of target audience
Take a moment and think about it. You have a great product idea that you believe will work like a charm. But the developer who works on your app fails to materialise it in terms of its design and functionalities. No matter how inventive your concept is, even the best product idea would go to waste in such a situation.
You can avoid this situation by focussing on the design of your app.
Here are some points that you should remember while designing the mobile application:
- Make certain that it is visually pleasing.
- Ensure its compatibility with the demand of your target audience. You need to do the same with the functionalities of your mobile app as well.
- Quote the price of your mobile app after ensuring these elements.
If you launch a premium mobile application, add a wide range of functionalities to it.
Users perceive free and premium apps differently. As a premium mobile application comes at a price, users expect it to be perfect and as per their demands. Given the intense competition in the top mobile app development company at present, mobile app owners do not hesitate to release a free version of their app.
It is a proven strategy to maximise the user base for a mobile app. Your best bet is to formulate a pricing strategy for your mobile app based on its functionalities. Try to keep the pricing flexible. If you wish to release a premium version of your mobile app, add as many functionalities to it as you can.
Do your research to gain an insight into the market demand
Popular apps have higher pricing for a reason. The functionalities of such apps are proven and time-tested, so users do not hesitate to pay a higher price for them. On the other hand, a new app idea is not well known to users. Knowing the demands of potential customers is necessary for such an app idea.
Want to set the price of your mobile app according to the market demand? Put yourself in the shoes of your target audience for a moment. Plus, do detailed research and analyse the data that you get.
These steps will help you understand the pricing expectations of your customers based on the market demand.
Keep the price reasonable for your business prospects
The ultimate aim of mobile app users is to get the best application for their purpose at the best price. By working out the right model for app revenue and customer loyalty, you can create a winning pricing strategy for your mobile app.
If you have a long-term plan in mind, it should reflect in your pricing plan. Keep the pricing fair and reasonable so that it doesn’t seem too high to your customers.
Also, do not forget to set up the right price expectations concerning enterprise plans and in-app upgrades.
Important considerations to determine the right pricing model
Before attempting to formulate a strategy, you need to know about the imperatives. Only then you can decide which model, out of the existing ones, will help you achieve your objectives.
Sometimes a specific idea might look tempting to you. However, it doesn’t mean it is the best strategy you can think about.
Before you make the final call, do not forget to make the following considerations:
- Take some time to think about the user base as well as the primary objective of your mobile application. Analyse both these aspects well before taking the next step.
- Your profit will depend on how much you earn minus the actual cost of creating your app. Alongside the knowledge of the cost for app creation, you also need to know about the approach that you must adopt to earn profit through your mobile app.
- Just like other mobile app owners, your principal aim should be to survive as well as beat your competitors in the mobile app market. Plan your strategy accordingly.
Also Read: Android App Development Trends
To sum up, you cannot rely on a fixed-mobile app pricing model for a long time. You need to keep making changes to it from time to time to keep it relevant as per the market dynamics. Want to keep your mobile app unaffected by the pricing fluctuations in the market? Attach a high price tag while going live with your mobile app.
You can reduce the high price tag whenever necessary. Even as you attach a high price tag, remember the golden rule: be reasonable while doing it.