HOW TO MONETIZE YOUR APP: FREE, FREEMIUM, PAID OR LITE VERSION?

HOW TO MONETIZE YOUR APP: FREE, FREEMIUM, PAID OR LITE VERSION?

In creating your app, a crucial decision to take to monetize it the best way, is the type of pricing and revenue model to give it.

SUCCESS STORY

Who doesn’t know Clash of Clans?
Who woudn’t like to replicate its success?

Clash of Clans landed on App Store in the ending of 2013 and in a few weeks went beyond the threshold of 1 million downloads in the Store.
Its software house, Supercell, was unknown until then, and Clash of Clans was its first title.

 

clash of clans case study

With the further launch on Google Play Store, in a short time it reached 4.5 millions daily players; it generated up to 2.4 million dollars and the Supercell team grew with dozens employees from at least 12 different countries, working in offices located in Helsinki and San Francisco.
Today, in its tv ads it features big Hollywood stars.

Clash of Clans adops a specific revenue model, which is free-to-play with various in-app inside of the game.

how to monetize your APP

There are a variety of revenue models for the app published on the Store, regardless of their vertical.

  • Free: the app is freely downloadable;
  • Lite: it’s a second version of a paid app, and it can be free, lower priced, with ads, and it usually doesn’t include all the features of the complete version;
  • Freemium: the app is freely downloadable by users but it presents some in-app purchases or/and ads that can be removed paying. This is the case of Clash of Clans;
  • Premium: the app is full-feature. It has all the features developed until then, e.g. “Shazam Encore”, which, at €1.79, has a lot of additional features than the free brother “Shazam”;
  • Free with subscription: this kind of apps provide you with services which are enjoyable if you pay a fixed price according to the period of subscription. This is a popular model between tv and music apps, the like of Netflix and Spotify, just for naming two of the most famous. In that case, the real product you’re purchasing is external from the app, while the app itself is only a fruition channel;
  • Paymium: the app is paid but it also has in-app purchases for extra features.

Now you’ll wonder: what is the best revenue model?

THE BEST MODEL TO MONETIZE

As you may sense, as in every other field, there isn’t a universal recipe.

Almost the totality of the top apps featured on the stores (social ones excluded), are freemium games such Clash of Clans, Candy Crush Saga, Pokémon GO.
You have to scan over many positions to find the first paid popular game, Minecraft.

It seems clear that the traditional buying and selling system has become more and more secondary.
Why?
Well,  because users don’t want to pay for something they can’t try in advance.
Seems legit.
On the other side, if your app gives a trial period or it is freemium, users are more inclined to spend to exend or improve their experience: it’s the logic of the product as a service.

Moreover, in some free-to-play games, in-app purchases can grant paying users a huge advantage over not-paying ones: in those cases the purchases become the only means to get a chance to win.
Some games are so imprinted on that logic, that they are veritable “Pay-to-Win“, which usually are unpopular between users’ communities.

At this point, I know that you thinked that your app is a successful idea, and that you believed that it is normal for users to pay for it.
You don’t absolutely want users you can’t monetize, which use your app freely without giving you anything back.

Then, you’ll be surpriced to know that, accoringly to a study published in Harvard Business Review (2014), not-paying users are vital for freemium apps.
In fact, those are the users that make your app go viral, because they usually become “evangelists” triggering a strong word-of-mouth phenomenon.
As you can imagine, that would almost surely bring paying users.
Actually, exactly because of this effect, a not-paying users is worth 15% al 25% more than a paying one.

So, what is the winning strategy for a freemium app?
Precisely being truly free-to-play and not pay-to-win: furthermore, it should have some purchasable extra features for those inclined to spend money.

Ultimately, it’s not the revenue model the thing that will grant success to your app.
The ingredients are all indispensable: curiosity, desire, frustration e entertainment.

So, before choosing your revenue model, be sure your app possess each of those trump cards.
Rather, start from the idea of which revenue model you want to adopt and build your app on it: this is the same mental process that lead to every success cases you could think of.

Changing after publishing your app remains a possibility, but infinitely worse than geting off to a good start.

What are you waing for?

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