As a business owner, developing and deploying a mobile app is basically half a job. The next challenge is to set the price of the app to get the desired return. If you price the app at the higher side, the user will not buy it and if you price the app at the lower side, your investment will not be recovered. Thus planning a proper pricing strategy is very important. In this blog, we will highlight the pricing models for mobile applications. But before that, let’s see what pricing strategy is.
What is Pricing Strategy?
Pricing strategy is the method through which you make money from the app. As an App development company wants to make money with their investment, let’s check out the best methods to do it. Many people think pricing a mobile app is an easy task. There are experts who spend their life in knowing the psychology of the pricing.
What are the types of Mobile App Pricing Strategy?
With the introduction of the App Store, the pricing model has changed completely and currently, there are majorly four types of pricing strategies as mentioned below:
The free mobile apps are free to download from the app store. The main source of their income is from the advertisements. But free apps are created to make an impact on the user’s mind about the company as well as for creating a product extension of what they offer. Free apps are basically developed to serve as a technique for customer retention, communication, and customer service.
These mobile apps are free to download from the app store but have restricted functionality and features to offer. Companies create apps having in-app purchase features, this helps them to recover the cost required to hire Android app developer. Customers easily pay more money within the app to get additional features or open the levels of the app, which eventually increases the app value.
Paid apps require some fee that needs to be paid once for downloading the app. But these apps have seen a huge decrease in popularity over the years, due to the big boost in a number of free and freemium apps. Purchasing the app for one time is a common pricing approach. But as per the experts, it is the least effective strategy. Paid is still a fruitful pricing strategy for certain apps.
These apps combine paid and freemium strategy, where users are asked to pay for the app and have the option to unlock the additional features with more payment. Paidmium is not a powerful pricing strategy but has the potential to drive more revenues for Mobile app design services. Paidmium may work well for music apps, social networking, and navigation apps. This pricing approach is successful only if you provide reasons to the users to make a purchase, it helps to generate revenue.
How to choose your pricing model?
When selecting a pricing model, it is important to know the model that suits your business, developers, and customers. Don’t stick to any specific strategy, just because you heard from others that it is the best pricing method and can grow your revenue. Consider the below important factors while selecting the appropriate pricing structure for your mobile app.
• It is important to know and understand the purpose behind the app development. Look whether you want to reach a large user base or target a smaller niche market.
• Analyze the cost of building the mobile app and what needs to be done to make a profit.
• Look for the competitor’s work. If there is an alternative for the low price point, you can opt for them — as the main objective of the business is to stay ahead of the competitors and earn profits.
What are the best mobile app product pricing strategies?
As discussed earlier, there are several factors to consider while selecting the pricing strategy for the mobile app. Here we have discussed some of the best strategies to adopt within the mobile app. After going through, you will get to know the impact of different prices on clients.
1. Test the Mobile App at multiple prices
The best method is to test it on multiple prices and check how the clients respond to it. An app is something not just what it is valued for, but basically what the customers are willing to pay for. Test the product on multiple prices and see the clients’ reactions to each price. Sometimes, the app developers provide the product for free to gain a large volume of subscribers and boost revenue from advertisers.
2. Mobile App Value should be greater than the price
Pricing is not about the numbers, but it is more about human behavior. When people purchase things — they compare products or things that they explore. There are multiple prices, depending on how they are framed and the story is conveyed to the customer. But the value of the mobile app must be higher than the price to gain customer eyeballs. Consumers will be eventually ready to pay whatever is the amount if they feel they are getting more in return.
3. Design as per user needs
Before pricing the app, several factors need to be considered to enhance the value of the mobile app. You might have numerous ideas, but they are useless if the developers fail to convert them into reality. The mobile app design should be extra-ordinary with incredible features and functionality. If you are going to build an app and depend on the subscribers, think about releasing updates once in 3 months. This way, it is easy to put a price on the updates and set subscription costs.
The app prices cannot be set and developers need to be flexible to work with multiple pricing points. The best pricing strategy is to launch a mobile app having a higher price tag and reduce it after a few months. Focus on the launch time to attract maximum customers, and you should not charge at the higher side. Try to price it reasonably and at the same time take benefit of the current market price. Wearable app development company is in demand nowadays as more and more enterprises are investing the wearable gadgets, smart devices, and AI-based gadgets.