Software developers and entrepreneurs are sometimes plagued by the belief that creating an amazing app is all it takes to be successful. In a perfect world, that might be the case; in an “if you build it, they will come” scenario, a great enough app would sell itself, generating its own marketing buzz and attracting people. Furthermore, users would be so happy with the app that they would shower you with money, and even more revenue would come to you through ambiguous and undefined circumstances.
But in reality, these dreams do not come true. There are probably hundreds if not thousands of apps that perform well and serve an important function that are virtually incapable of generating a steady stream of income.
If you want to be successful, building a great app is just the beginning. You also have to find a way to monetize it.
App Monetization Strategies they come in many flavors. Some forms of monetization are more direct, asking users for money directly to keep the app running properly. Others are more indirect, leveraging in-app behaviors to passively generate revenue.
Here are some of the most common options:
- Paid apps. Some developers make their app available for an upfront cost. It is cash to get guaranteed income for every download. However, this strategy can be limiting; 50 percent of smartphone users I have never paid for an app.
- Subscriptions. If you provide ongoing services, you can also charge a flat fee per month for an ongoing subscription. This generates constant income, but don’t expect to turn all users into paying subscribers.
- In-app purchases. Additional features, in-app currency, transaction fees, and cosmetic items are just a few examples here.
- Advertising. Traditional ads and affiliate links may slightly affect the user experience, but they are a tried and true method of app monetization.
- Data monetization. You can also collect detailed data about your user base and then sell that information to third parties as a way to make money. Just be sure to be clear and direct with your users, clarifying how you plan to use their information.
How to monetize an app effectively
If you want to monetize your mobile app effectively, here are some of your most important strategies:
- Know your target audience. Different target audiences they are going to have different preferences when it comes to monetization. If you’re targeting children or teens, who may not have much purchasing power, it’s best to monetize these audiences through advertising or other passive sources. On the other hand, older audiences may be less tolerant of advertising and more than willing to pay a few bucks for an ad-free experience.
- Consider a hybrid approach. There is nothing wrong with pursuing multiple monetization strategies simultaneously. In fact, it is often advantageous to do so. Pursuing monetization in many different ways is one way to diversify your income portfolio, so to speak. If there is a threat to one of your income streams, you will have to turn to the others. You’ll also be able to compare these different monetization approaches against each other, to see which ones are more valuable to your brand.
- Prioritize the user experience (UX). In the pursuit of increased revenue generation, many developers lose sight of the user experience. They are willing to compromise the average user experience for more money; for example, they may spam annoying pop-up ads to generate a few thousand dollars of extra revenue, disrupting users’ app experience in the process. This is always a mistake. User experience must come first, otherwise the user churn rate will be so high that the revenue stream will dwindle to nothing.
- Improve user engagement. The most attractive apps tend to be the easiest to monetize. Active and attentive users are much more likely to make in-app purchases, click on ads, and continue their subscriptions. Be sure to measure engagement metrics regularly and make positive changes to your app to further encourage it.
- Measure and analyze your monetization strategies. Always take the time to measure and analyze the performance of your different monetization strategies, especially if you are using more than one approach simultaneously. Only through objective analysis will you be able to determine if you are making a profit and if your income streams are working optimally.
Monetization is vital If you want to be a successful mobile app developer or entrepreneur in the mobile app space. But don’t push yourself too hard; It’s not something that has to be perfect from the start. In fact, most mobile app developers spend a lot of time experimenting with different monetization strategies, changing their approaches and tinkering with the formula for better results. It may take months, or even years, before you find the perfect balance for your application. The important thing is that you make it a priority and take it seriously, instead of just getting carried away with a good initial idea.