Your app, irrespective of how famous or what customer base it has managed to attract, is ineffective.
So, you are planning to or have already launched a mobile app and the idea and the whole development process was enough to attract a hundreds of customer base. The app is making news because of the viability it offers, but what next?
Your app, no matter how famous or useful, will remain unprofitable for you till it makes some profit for you. But wait, the app belongs to the free category, right? So how would people pay for it and why?
They would and here’s how –
Monetization Strategy 1: In-App Purchase
One of the most common app monetization strategies, which are used to utilized by a number of apps, across categories is in-app purchases. The most evident example of this form of monetization is seen in the gaming apps, where they ask you to pay an amount for acquiring a special power or for getting coins to buy something in the game.
In-App Purchases can be divided into three categories –
- Consumable – These purchases are made for short term benefit. For example, you can ask users to pay for lives to move to the next stage in the game.
- Subscriptions – When you ask users to pay for a month or year’s content, it falls under subscription. It can either be event based – for short term, or it can be recurring like Netflix service.
- Non-Consumable – These purchases are made for one time, long term benefit. Example, when you take money from your users to block advertisement from the app till forever, it counts under non consumable category.
Monetization Strategy 2: In-App Advertising
Another way of making money from your app is through in app advertising. By allowing other apps to show their advertisement video or visual ad image in your app, you would be able to make money out of it.
The application of in app advertising can be seen in both game and content based apps. You can ask users to see a video to reach the next level or can ask them to watch the ad to read two more article/ report for free.
Monetization Strategy 3: Sponsorship
Sponsorship form of monetization is not your common money making way. For another brand to agree to being your sponsor would first require you to be a popular name with high customer base.
This is how it works – you first have to find a brand that is offering an app similar to yours to a similar set of audience and then you approach them with the proposal of redesigning your app according to their app style, so that both your and their customer base increases.
There are two ways of making money out of this strategy. Either you can divide the revenue generated from the app between you and the sponsor or you can ask for a monthly sponsorship fees from the sponsor for using your app.
Monetization Strategy 4: Freemium
For the freemium mode of monetization to work, you will have to develop a paid version of your application too. The idea is to launch the free version of your app with some features locked and then ask the users to pay to gain access to the paid features of the application.
The paid version can be something that carries a set of all new/different features or it can simply be a version that has no advertisement in between.
What you need to ensure when opting for the freemium version of app monetization is that the features that you are offering in return of money are actually worthwhile.
So here were the four ways you can generate money from your otherwise free app. But how do you know which monetization method is right for your app?
The answer lies entirely on your business goal. Suppose you have a live streaming app, would it make sense to have in-app purchase? No, right? While, it would if you add the in app advertising or subscription mode.
Another parting tip would be to not go overboard with app monetization strategies. Include just one or at max 2 modes of making money from your app.
If you need to know the right monetization implementation methodology, contact the team of experts.