No one build apps for fun, building apps is a business and you need to have a business model for revenue. Today, there a number of options available for monetizing your app, which method should you adopt for monetizing your app ?
Here are top 5 ways to make money from your Mobile App
By far ad monetization is the most obvious method of making money from your app. You can set revenues based on the click-through rate (CTR) or number of impressions (CPM). Some Ad companies claim that you can earn as much as $5000 per day through ad monetization. To achieve this phenomenal figure, you must make sure that the ads don’t affect the user experience. Admob (from google) is most commonly used for in app adverts. Keep in mind you need 1000’s of users to generate meaningful revenues.
This is another important way of monetizing your app. Through In-app purchases, users can unlock new features in the app or purchase add-ons like extra life in a game like Candy Crush. Today, almost 8 out of 10 top grossing apps were free. These free apps make millions of dollars in sales by effectively using the in-app purchases. Keep in mind paid users are a tiny fraction of the entire user base.
Paid Version of Apps
Usually paid apps don’t perform well in number of downloads as compared to free apps. If you have an app that is compelling enough for users to pay for downloading the app without first sampling it, then this is a right choice. Users pay just once to download your app and feature updates are expected to be free for the lifetime.
In this approach, there is no repeat revenue from your existing app users. For a continuous revenue stream, you must look for new customers everyday. Choose this method only if you are confident that your app has incredible value to the customers.
Build User Base
This method takes more time and effort but certainly pays off in the end. Several app companies nurture a growing user base of loyal app users with free apps. These companies monetize that user base with other paid apps, content etc., later on. Choose this method only if you have a renowned brand name and happy users. Good examples are Dropbox, Evernote with their Freemium models.
Free apps perform well in terms of download and most companies choose this way. Some companies will offer two versions of the same app, free (lite) and premium version (full version of app). The lite version of the app will hook the user but will leave out some key features which drive the users to purchase the premium version of the app.
Though there are several options to monetize your app, the most effective way to make money is through repeated transactions from existing users as much as through new users. Always keep in mind that a satisfied customer is the best business strategy of all.