There are a lot of crucial decisions involved in the process of mobile apps development. However, the most crucial decision is taken once the app is all set to be launched. That decision is to choose between a free app or a paid app. One of the biggest misconception people have is that only paid apps can generate money as people pay a fee to download the app. But, it is completely false. Almost all the popular apps are free to download and they still generate a healthy revenue.

Majority of the mobile apps that get downloaded are free for download. This clearly points out the trend that people are more keen to download free apps rather than paid apps. So, it’s best that you keep your download free, get as many downloads as you can, and then look to generate revenue by other means. What means you ask? Let’s go through a few monetization strategies which will help you to earn real money through free mobile apps.

Preliminary Ground Work:

• Figure Out Your Customers
  Before you jump on anything else, take this very basic step. Try to analyze who are your users? Understanding your users is very critical and forms a solid base for further steps. If you have an existing business, the demographics of the users will be a replica of your current users. However, if you are completely a new business, you will need to focus on your potential customers.Even the smallest of the things like availability of your app on different operating systems can help you in understanding user behavior. According to a study conducted by Plots Projects, the notification opened rate on Android is 13.6% as compared to 4.1 % on iOS. Apple and Android users are poles apart in terms of behavior. Analyze the Who, What, and How in terms of app usage to understand your users better. Once you get the answers, compare it with your app and find out if it meets these considerations. If Yes, then you are good to go ahead.

• Perform A Thorough Competitor analysis
  Sometimes we focus so much on our own app that we forget to check and compare other competitor apps. This is again a very crucial step in order to place your app appropriately in the market. Perform some of the key analysis like:
  – Traffic Analysis
  – Site Analysis
  – Content Analysis
  – Keyword Analysis
  – Link Analysis
  – PPC Analysis
  – Feature AnalysisYou can gather huge insights by performing these analyses. Learn from the best practices of your key competitors, follow them and on the other hand try to find out their shortcomings and mistakes. Avoid doing the same mistakes and fill the gap of shortcomings in your app. Differentiate your product by doing something which no one else is doing. This would become the focal point of your marketing strategy and will boost your brand image.

Monetizing Methods In Free Apps

We have covered the preliminary components of the monetization strategy in previous points which will provide a good launchpad for implementing the real monetizing methods in your app. Let’s now get to the real action. There are 2 basic ways through which free apps generate money:

1. In-app purchases
2. Advertisements

Either one of the methods can be applied to generate money, or even both of them could be applied together. Let’s understand each one of them individually.

• In-App Purchases:
  In-app purchases are basically upgrades which allow users to get access to additional features and enhances user experience. Studies have proved that only a few people purchase upgrades and iOS users are more willing to pay for upgrades in comparison to Android users. It’s not possible that all your users will opt for a paid upgrade and hence you need to focus on that small group who are more likely to purchase these upgrades. You’ve got to discover a way to get the user glued to your app and push them to come back looking for more.Gaming apps are a brilliant example of in-app purchases. The download is free but access to certain levels and features are restricted. It can only be achieved through a paid upgrade. Coin system and token system are great methods to push a user to spend more per purchase. Rather than saying something costs $1 you can offer it for 100 tokens and offer coin purchase options like 500 coins for $5.

  Apple Support has bifurcated in-app purchases into 4 different categories:

  Consumable – You can buy these items every time you want them, and you can’t download them again for free. Like purchasing coins or tokens.

  Non-consumable – You buy these items one time and might be able to download it again for free. Like an upgrade to a premium version with no ads.

  Non-renewing subscriptions – You can use this content for a fixed period of time, depending on the app, and you can buy these items again after your subscription ends. Like Sports apps offering access to specific leagues (EPL, NFL, NBA season etc.)

  Auto-renewing subscriptions – You can buy these services or this content for a specific subscription period, and the subscription will automatically renew at the end of that period. Like newspaper & magazine subscriptions, Netflix, Hulu Plus etc.

  Analyze what kind of an in-app purchase will compliment your app. Some of these methods might work better than the other but that’s totally subjective from app to app.

• Advertisements:
  These are pretty straightforward. You would have come across ads on various websites and mobile apps. If you already have a website, then you don’t need to learn anything about how ads work on apps. It’s the same as they work on a website. You get money for impressions & clicks on the ads. The pay rate is different for different types of ads. You can charge more for video ads in comparison to static banner ads.Advertisements are a great source of revenue for an app. Having said that, overdoing it can seriously hamper a user’s experience which can in turn cause damage to your app. So you must know  where to draw the line.

  In-app purchases and advertisements can be applied individually based on which one suits best for your app. However, in some cases, both of them can go hand in hand. For example – You can offer a premium upgrade to users who don’t want to see ads on your app.

Final Words

If you have a question in your mind that whether you should launch your app as free or paid, the answer is FREE. It gives you more opportunity in terms of expanding your reach. Once you achieve a handsome number of downloads, you can implement the above mentioned monetizing strategies to churn money from your app. Don’t forget to perform the preliminary steps to zero down on the best method to get money from your free app. All the best!

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