A Profitable Mobile App: 5 Necessary Considerations
How to make a profitable mobile app for your business.
Think it is easy to make a profitable mobile app? Think again.
Take out your phone and count how many mobile apps you have on it. Now consider: How many of those apps did you pay for? I have about 50 apps on my phone but only paid for maybe two of them. And even then, the price range was between $.99 and $3.
Fact: It costs $10-20,000 to build a mobile app. That doesn’t even take into consideration upkeep and maintenance after the app has been built. Mobile apps are expensive and customers expect to pay little or nothing for this investment. Mobile apps are a great resource for any company with a use for them. But making a profitable mobile app is hard. As many companies have discovered, a good idea can be tough to translate into a profitable mobile app.
If you’re still strongly leaning toward a mobile app, keep reading.
There is a reason that the most downloaded mobile apps are free. Consumers are not willing to pay. Why would a customer pay even $.99 for an app when there are five identical apps available for free? The market is full of free apps for most things. If you’re going to stick with a price tag on your company app, most consumers will be able to find a similar app for free. You need to differentiate your app enough to justify people paying for it.
There are two popular solutions to create a profitable mobile app. You can either take the Freemium approach or follow the Premium model.
- Freemium Approach – Customers download a simple (with ads) version of the app for free. Special features are paid for, while the simple app is free. For some apps, the consumer is required to make in-app purchases to upgrade. This is usually associated with games but can also be used in other apps. There is also the option to pay for a no-ads app.
- Premium Model – Consumers pay upfront. They will do this because they have a high level of trust in a well-known company. A company that creates a study guide app to help medical students study for their board exams can easily price it at $25. That is because those students who buy it, view the price as an investment in an educational resource. Without being well-known, it takes good marketing and (very rarely) a viral app to convince customers to pay.
Five Things to Consider
- Business Model: What is your business model? Are you a conduit, connecting the consumer with other companies that have the products they want? (Examples: Pinterest or Uber) Or do you have the product the customer will buy? Are you wanting the app to connect your clients with other businesses or for it to connect your client with your business?
- Uniqueness: Is the app unique? Does it use the phone’s features in some unique way?
- User Base: How will you get your user base? The great thing about mobile apps is that once a person installs your app they are more likely to reuse it than a website. However, it takes more effort to get that initial download. Will you need to spend money on a marketing campaign?
- Profit: How will you continue to make money after the initial download? You’re going to hit a plateau where everyone who wants your app has it. What’s your plan to keep your customers?
- Upgrades: How will you continue to keep your mobile app current when phone technology changes? How will users pay for it? Where are you going to get revenue to pay for those upgrades? When you upgrade, will it be free or will you charge consumers to update their phone? There’s the option to charge a small transaction fee or renewal fee. But will your client pay the money to upgrade?
Always consider the cost of building an app. The price is high and the ROI can be minimal. If you have a clear use for an app then it can be a valuable addition to your business. If you just want to follow the trend you will possibly lose money that would have been better spent on improving or building a responsive website.
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MobileApp Hands is a division of IT Hands. IT Hands offers custom web and mobile development services to web companies and ad agencies. We provide quality, affordable software development services to more than 350 clients.