Of all the decisions you need to make as developer or product manager of mobile apps, pricing is one of the most complex.
This slideshare includes:
- a simple method for determining if free is a good fit for your app,
- how to price an app that is part of a SaaS offering,
- 10 tips to make in-app purchases your users will actually love and
- benchmarking data on how some of the world's most commercially successful apps approach pricing.
If you enjoy this slideshare you can find loads more awesome data about building apps users love at blog.appbot.co
8. What
are
the
opLons?
Completely
free
Freemium
Paid
upfront
Paymium
FREE
9. Rules
of
thumb
Paid
and
Paymium
dominate
for:
• Business
• Produc-vity
• U-lity
Free
or
Freemium
dominate
for:
• Entertainment
• Lifestyle
• Games
• Content
10. Business
models
for
free
apps
Freemium
model
• In-‐App
Purchases
• One-‐off
or
• Recurring
(subscrip-ons)
Completely
Free,
needs
revenue
• Ads
• Directly
generate
revenue
and
• Act
as
conversion
lever
to
upgrade/move
to
paid
(freemium)
• Possibly
endangered
species!
Completely
free,
no
revenue
requirements
• Revenue
derived
elsewhere
• Maybe
app
is
not
core
product
• Goals
are
around
convenience
&
engagement
• Examples:
Banking
apps,
remote
control
apps
11. Pros
&
Cons
of
free
Pros
• Lowers
barrier
to
download
Cons
• Need
high
download
volume
to
make
significant
revenue
• Lose
free
as
a
promo-onal
lever
• Easy
to
give
too
much
away
• Greater
compe--on
• Expect
lower
ra-ngs
• Can
take
longer
to
recoup
development
costs
12. “92%
of
revenue
on
the
App
Store
is
from
freemium
apps,
yet
they
account
for
only
11%
of
the
apps
on
the
app
store.”
-‐
Dan
Counsell,
Realmac
-‐
13. For
apps
that
need
to
generate
$
The
free
Litmus
test
18. Because
the
app
has
no
value
if
you
use
it
alone.
These
apps
are
made
for
freemium,
but
are
relaLvely
rare.
19. Is
your
app
highly
shareable
and
in
high
demand?
20. Think
music
apps,
collaboraLve
apps…
Sharing
isn’t
necessary,
but
it
adds
value.
If
users
don’t
have
to
share
to
get
value,
high
demand
is
even
more
important
to
ensure
enough
scale
for
freemium.
22. Think
call
credits,
virtual
gambling
chips
Only
2-‐5%
of
your
users
will
ever
make
a
purchase.
You
need
both
volume
and
frequency
to
make
significant
revenue.
33. #4
Leverage
most
loved
feature…
cont’d
The
fine
print:
• Make
sure
you
grandfather
old
users
• Be
careful
not
to
remove
the
value
of
the
free
version
34. #5
Prompt
IAPs
aher
a
“wow”
moment
Happy
users
are
much
more
likely
to
convert!
41. Two
key
decisions
Free
or
paid
download?
Offer
subscripLons
as
IAP?
$0.99
+
42. Consider
Free
download
if:
Access
on
mobile
adds
value
The
App
Store
could
be
useful
for
product
discovery
43. Should
I
offer
my
subscripLons
as
an
IAP?
Yes
if…
• App
is
core
product
• Increase
in
conversions
&
revenue
>
revenue
share
taken
by
app
store
• You
have
the
tech
to
support
it
60. IAP
summary
• Freemium
works
at
this
scale
• $4.99,
$9.99,
$0.99
or
$19.99
are
the
most
common
price
points
for
game
IAPs
• SaaS
models
very
common
in
Non-‐games
• Keep
it
<$20
if
you’re
building
a
music
app