With current number of free Android apps amounting to 2.760.421 vs 215.361 paid apps on GooglePlay as of June 7, 2017 – according to AppBrain statistics – the choice of your app’s monetization model becomes life-changing. How do free apps make money? Why going freemium can be more lucrative than selling it for a cent? Let that sink in for a moment.
Behavioral Economics
Let’s remember the well-known Power of Free research, where its participants were offered to purchase a Hershey’s Kisses for $0.01 and Lindt Lindor for $0.15. While the price differential in a store would be much larger than 14 cents, the majority of buyers chose Lindt Lindor candies. However, when the price of the both products was reduced by 1 cent making Kisses free, the choice preference completely reversed making free Kisses the most popular choice. While the sum of Lindt Lindor amounted to the same 14 cents, the power of getting something for free made the buyers respond irrationally. The word “free” itself provokes a burst of dopamine in our brains evoking unreasonably positive feelings [1].
While the Power of Free has been multiply proven, let’s figure out together, how a free product in the form of a mobile app can bring profit and let not simply pay off, but actually make a fortune, or at least something close to it.
What is a freemium model? The notion “freemium” (“free” + “premium”) dates back to 2006 when venture capitalist Fred Wilson together with his blog readers came up with the name for his “favorite business model” [2]. Today freemium is a monetization strategy by which a product or service is offered free of charge, while money/premium is charged for additional features or functionality. How do free apps make money?
o For how many days, months, years my freemium can draw attention of new users? o How often my freemium need to be updated and what additional expenses this process requires? o What ROI do I expect from my freemium? [3] then you’ve done well your home assignment and know how to allocate precious resources in the future.
Finding professional and efficient software developers who can turn into reality your ambitious idea is half the battle, though a crucial one. Making paid features of your freemium app and adds look and feel like a normal part of the app experience means being on the right track to making profit. “The easiest way to get one million people paying is to get one billion people using.” Phil Libin, Evernote
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
Archives
February 2018
Categories
|