How To Monetize Your iPhone App For Maximum Revenue
In this special report, you will learn the most efficient way to monetize your mobile application according to trends in mobile app pricing and purchase patterns.
Specifically, we cover the data that publishers are currently using to determine pricing strategy for their apps to maximize the number of paying users at the optimal price point. To maintain data homogeneity we use data for the iPhone only.
To summarize:
- For the same exact application offered free or as a paid version ($.99), the free application will be downloaded at least ten times as many times as a pay application (i.e. charging $.99 or more for your initial application will result in 1/10th, or less, as many users versus a free version).
- A free (Lite) version of your application will result in a 4-5% conversion to the paid app
- Releasing a free version prior to a pay version results in user backlash and decreases purchases
- A price decrease should take place before the user adoption rate begins to decrease
- Logically, the number of purchases decreases as app price increases. Moreover, when app price is plotted against number of downloads, the maximum amount of total revenue through sales results for apps costing $1.99
- New users generally discover apps through ranking lists at app vendor (i.e. Apple App Store), keyword searches at app vendor and through word of mouth recommendations
The baseline requirements are 1) the free version must be feature-rich, useful and engaging 2) the pay version must offer additional value, features and updates 3) User review ratings for either must be at 3.5 or above
In conclusion, here is the foundation upon which to begin to build your app strategy in regards to pricing. No formula can be applied across all apps. Therefore, you will want to modify these variables to match your product, market and desired objectives.
First, build a free version and a pay version of an app and release them at the same time. Your first objective should be to get a high adoption rate and get on any of the app vendor’s “Top Downloads” list. You will need 5,000 downloads in a 24-hour period to make the App Store’s Top 100 list or 20,000 in the same period to place on the Top 25. Monitor your user reviews, fix issues in updates, and strive to achieve a user review rating of 3.5 or above. For the paid version, charge a higher price initially, and then drop the price to $1.99 before the purchase rate (velocity) begins to decrease. Offer continued updates to both versions and maintain user satisfaction.
Best of luck becoming an App-illionaire!
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