Monetization Guide for your Mobile App
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Monetization Guide for your Mobile App
Maximize your earning potential by implementing the right strategy
This week’s newsletter is about how to monetize your mobile app, what strategies you can use to maximize your earning potential, and what business model to avoid.
Hi 👋, Rommel here! Welcome to this week's newsletter. Each week I share some tips and share knowledge about mobile product management. Take a look at last week's post:
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This month is so crazy and there’s a lot going on from preparing for the holidays, errands, work, and writing this week’s issue it’s just a few days away. It’s been a busy week but still, I made sure I posted this week's issue I hope you liked it so here it is.
Initially, when creating a mobile app most of the time you put all your focus on just creating cool apps and adding amazing features, some of those features need servers or other services so they can be fully integrated into your app. Those servers are not free, as for the services some of the services are free but have limitations then you will be paying if you hit those limits.
To make your mobile app sustainable you need to find a way to monetize your app. There is a couple of ways how you can charge your customers but you need to be careful and think thoroughly about how are you gonna monetize your app. See the list below.
Monetization Strategies
When it comes to mobile app monetization, there are a couple of ways you can do this. But for this post, We’re going to look at the top 4 monetization strategies and discuss what is the good, the bad, and the potential impact when choosing the right model or wrong model for your mobile app.
Advertising
This is a common way to generate revenue on your app. Most of the free apps use this kind of model to generate revenue. This is the easiest but dangerous if not implemented correctly. Displaying ads on your app is part of the app experience. You should implement this strategically or else it might lead to reducing in engagement or retention.
One of the increasingly successful ad formats is Native ads. When implemented correctly, those ads create minimal disruption to the app experience. They are designed to look and feel like the content around them, often appearing in the same format and style and much much better compared to traditional banner ads.
Pros
Easy to implement
Can earn a lot if implemented correctly and if you have a large user base
Cons
Can be obtrusive
Can reduce engagement and retention if not placed smartly
When to use this model
This is perfect if you don’t want to charge money to your users but you need to make your app sustainable and earn some extra. If native ads are implemented wisely it can lead to more engagement and more income of course this depends on the size of your audience.
Apps that use this model
Paid App
Paid to-download is another way to monetize your app. Users must pay a one-time fee first before they can access your app. Your earnings will be based on the downloads. Using this model is perfect if you have customers who prefer to pay once to get the full experience. This can be really effective when your product provides a unique value to your users.
Pros
Your app can be perceived as a premium product
Can be great for growing a user base of quality customers
Cons
Users will expect more compared to the free/freemium apps
If you did not deliver your store's ratings will be brutal.
Often difficult to acquire first-time users
When to use this model
Use this model if you’re positioning your product as a premium one. If so, make sure you’re giving them a great experience outstanding design, and amazing features that add a lot of value to your users, or else your rating on the stores will be brutal. No one wants to pay for a product and not meet their expectation, so if you’re doing this as much as possible exceed their expectation, if possible go above and beyond in this way you can generate a loyal user base that can promote your product to others.
Apps that use this model
Freemium
This is the most popular model right now on the market. This model allows users to download your app without paying at first. It’s like giving them access to your app but not the full experience. One mostly used sample of this is making the app free but with ads and in order to remove those ads users need to subscribe or make a payment to remove those ads. There are 2 ways to do freemium, In-App purchases and Subscriptions.
* In-App Purchase
This just means you’re selling them additional content or digital goods or maybe you put features behind the paywall so that in order to access it they need to pay first.
* Subscriptions
Currently, this one is the most adopted in the market because it offers a greater chance to increase revenue as well as it can also provide recurring revenue. It’s almost the same as the In-App purchase but the main difference is this is not a one-time payment. Your users should commit to paying per month or annually.
Pros
Your users can try your app before purchasing
Helps you secure a larger user base
You can combine it with the ads strategy on the free version of your app. Additional revenue.
Cons
Affects user experience
Can be challenging to convert non-paying users.
Can be challenging for small teams without customer support teams.
When to use this model
Your app should be offering an ongoing value to your users or the service that you provide is being used on a regular basis. You also need to constantly iterate to make sure your app is still relevant or else your competitors will steal away your users.
Don’t forget to consider your target market as well. You should make sure that your target market is willing to pay for ongoing access to the app’s feature or service.
Apps that use this model
In-App Purchase (One-time Payment/Consumables and Non-Consumables):
Subscriptions:
Paymium
This model is a combination of paid apps and the option to buy additional content or features. This is a tough sell because after paying for the app you need to buy additional features, content, or services. In this method, you need to make sure your app is really valuable and unique to make it more pleasing and an effective approach to generating revenue. This is tough but with the right strategy, you can still pull this off and be rewarded.
Pros
You can lower your app’s download price
Your app can be perceived as a premium product
Cons
Store rating and feedback can be more brutal
Challenging to gain new users
Can cause a negative experience if you put some feature or service on another paywall
When to use this model
In my opinion, going to this route is brutal and not suitable for most cases but if your app really adds a lot of value to your users and is unique this might be the right option for you. In order to be this effective you have to keep in mind the cost to download and what feature or service are you gonna put behind another paywall. These features or services on another paywall should be completely optional but has enough value so that users can still purchase them for additional experience. If not implemented correctly it can cost you a lot of headaches and might damage your app/brand reputation.
Apps that use this model
Choosing the right strategy
Keep in mind that don’t be afraid to do experiments and talk to your customers. And you can combine different models depending on your goals. Knowing all of these models the right monetization strategy for your mobile app will depend on your target audience and business goals. It’s important to consider your options carefully and choose a strategy that aligns with your overall business plan.
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Until next week, Thank you for reading! Have a great week! oh and advance Merry Christmas!!
