Most app developers build an app hoping to cultivate user loyalty, gain new mobile users, and create more brand awareness, in addition to providing a value-based benefit. However, more than anything, most app developers want their app to provide a sustainable source of revenue. This wish list is not one that’s easily achieved if you don’t have the right planning or tools in place. This is why it takes a successful revenue building business model to take an app to the next level.
Determine the Best Business Model for Your App
Believe it or not, a mere 2% of all app developers claim a lion’s share of 54% of all app revenues. This is why it takes a well-designed plan to gain revenue from your app. There are questions that you must answer in order to glean insight into what type of business model would work best for your app;
- What problem or problems is your app trying to address?
- What makes your app unique and distinguishable and is it something people would pay for?
- What users be willing to pay for additional upgrades?
- Which business models do competing apps use and which ones have been successful?
You also need to consider what you value the most when it comes to your app. Are you more interested in gaining a ton of users initially, or is it more of a priority to gain revenue as quickly as possible? Some business models are structured to build revenue right away without a real focus on user retention, while others aim to create a large number of downloads initially that will produce profit later. With this being said, there are six bankable business models that produce the most revenue for mobile apps. Fortunately, these models can be mixed to suit your app or combined to include more than one approach in order to create more revenue.
Freemium & In-App Purchases and Advertising
These three business models make up three of the most bankable business models for apps. Freemium apps allow users to download the app for free but require a purchase for upgrades and advanced features. This strategy works by dangling the basic version of your app in front of your users until they are actively engaged enough to buy the upgraded version of your app. in addition, the in-app purchase seeks to utilize your app as a channel for making purchases that can only be made via your app, while in-app advertising works by selling data-driven advertising space in your app through the use of a mobile ad partner. All three of these techniques provide a proven vehicle for increasing your app’s revenue.
Paid Apps, Subscriptions & Sponsorship
The paid app business model is straightforward in that it requires users to pay before they can play. This model uses persuasive advertising to convince users that the app is worth purchasing, while the subscription business model is similar to the freemium app, however, it requires a user to pay for content instead of features. Users are required to pay for more content by buying a subscription after they’ve viewed a pre-determined amount of free content. Lastly, the sponsorship business model utilizes advertising in your app to reward users for engaging with your app.
These six business models have been responsible for the success and longevity of many apps. Many app developers have used all, some, are just one of these models to drive revenue. Any app developer that’s looking to create increased sustainable revenue with their app chooses a business model well suited for their app and puts it into action.