The single most important decision in evaluating a business is pricing power.
- Warren Buffet
Pricing of a product (in this case, mobile app) is a key element in attracting people towards it, lower the price, better the customer penetration. As much as you love the number-game, customers also view it with a crucial eye. Meaning, just like their self-attested offline shopping theory, customers think twice/thrice before investing in a product. You guessed it right; therefore, you should give the pricing strategy of a digital product prime importance while planning the PRD and development strategy.
The right mobile app pricing strategy will help you get the initial applause from the audience (A dream come true, isn’t it?). However, it is difficult to decide between the different mobile app pricing models. The reason being, services that are offered for free have higher chances of getting attention.
Well, having said that, you even have to think of your profit-making strategy, isn’t it? A lot of effort goes behind choosing the best pricing strategy for your mobile app; understanding the customer’s psychology is fundamental.
In this blog, we would be discussing “what is pricing strategy?”, “how to select the right pricing strategy for your mobile application?” and “how pricing strategy influences customer’s attitude towards the mobile app.”
To begin with,
What is the pricing strategy?
Pricing strategy is the combination of elements and ways in which you will make money at regular intervals. It is the strategy that will help you monetize from your mobile application.
Pricing is all about customer value. Price is what you pay, and value is what you get. ----- Warren Buffett.
To your surprise, people spend years behind understanding customer psychology, probably graduating with it, just kidding 😃. I am sure you too would need help in order to have a clear picture. Well, we are happy to help! Contact us on our email id, and we would be up on toes within 24 hours.
What are the various types of Mobile app pricing strategies?
I am sure you are curious to know more about the various pricing models for mobile apps, don’t you? So, here we go…
Free apps are free to download, and users can download them anytime, any day, without paying any fees. A major chunk of remuneration is earned through the in-app advertisements for free apps. These are particularly meant to retain customers and offer them an extravaganza.
Unlike free apps, freemium apps have limited free offerings. Freemium apps allow users to access the app’s features in a limited way. For accessing other features, customers can pay a little fee. These apps also support in-app purchases, which is another way of earning through apps.
Paid apps are less favored over the above two. However, there are paid apps that offer some of the exclusive services and features that none of the apps can, and that’s why the pricing.
If you are planning to release a paid application into the store, you need to plan a strong marketing strategy that can capture user’s attention.
It is a combination of both Paid and freemium models. In this pricing model where people access an application's features for free and some others for paid. Paymium is definitely a good and powerful pricing strategy to make money using the application.
What are the various things that you should consider while defining the best product pricing strategies for your mobile application?
The influence of human psychology is predominant while deciding the pricing strategy for a product or service. Customers’ are always inclined towards products and apps that are available for free, but that doesn’t mean you should always give them for free.
However, another argument to make here is that if it is not you for them, there are several others that can provide the same service (aka, your competitors). Hence, while deciding on the pricing strategy for your mobile application, you should check out what other strategies have your competitors implemented. Check out for complimentary services that you can provide and how your pricing numbers can divert user’s attention towards the product. Accordingly, you should offer a little more than the said offerings.
Understand what market is ready to pay:
The whole motive of releasing a mobile app into the market is that the user should use it at its best value. For having this dream come true, you should first check whether the customers are willing to pay for the mobile application.
And as described by Chris Cayer, the founder of Reyactive, the best way to decide the price is to test the product/mobile app offerings and audience response at various prices.
The entire mobile app genre relies solely on the value that is worth investment. Appreneurs do not build something just like that unless they know what value it holds in the given market.
Therefore, you can try pre-decided pricing for a few months and change it to test for other responses. Until you reach the right level of your product price, keep changing the product price and track the audiences’ response.
Develop an app that customers want:
As you all know, there are millions of applications in the app store. Unless you provide something extraordinary, out-of-the-box, no user is really gonna swipe right (meaning, download 😃) your mobile application.
Hence while deciding the best product pricing strategies for your mobile app, you need to consider the user's expectations from the application. During this consideration, you will need to know various factors that affect the variation in cost. You should discuss the same with your prospective mobile app development company’s team, who would further guide you in selecting the best mobile application pricing model.
Understand what market demands from the app and research the landscape:
You should know what real-life problem your mobile app plan to solve. Along with this, you should ask yourself, how many developers will you need for developing an app, and how much initial investment will you have to make before the mobile app is launched into the market. You need to run a competitive analysis of the mobile app market and find out deep insights into the landscape. An important aspect of this is to understand the customer's perspective of looking at things and their willingness to pay.
Making it affordable for users:
Before anything else, you need to know your users, period! Defining a pricing strategy for your mobile app revolves around your customer’s interest, willingness to pay, and affordability.
Pricing is critical to businesses,
The moment you make a mistake in pricing, you’re eating into your reputation or your profits. ------- Katharine Paine
If your target audience can not afford to pay a price you decide on, it is of no use to you. Additionally, various mobile application types adopt pricing strategies differently. Therefore you need to study the audience’s affordability for ensuring a sustainable future in the market.
Develop an app that offers value:
Another factor to consider while developing an app that customers want is to provide value for the money. Customers will happily pay for a product that allows them to access all the functionalities and give value in return.
You should know the answers to the questions like,
- How is your application any different from the competition?
- How does it stand out when it comes to app offerings?
- At what price does your competition offer the services
Once you have these answers, you know your competition’s weaknesses and offer the best service possible.
Therefore, develop an application with most of the functionalities. The pricing should justify the value the application provides to the users. However, find out your own way of earning money from the same.
Pricing should be sustainable for your business:
We know that we have talked and focused solely on customers, and therefore we are now coming to your profit. Yes, you are developing an application to make profits. And therefore, you should check if the product pricing is affordable to you and your business. Will you be able to survive the market competition if you keep the pricing low? Can you take the risk of releasing free apps? If you have answers to these questions, you can launch the application at the predicted price range.
Application pricing strategy is definitely a task that you need to put on top priority while you develop an application. You may have a sound mobile app development process in place, but for selecting the right mobile app pricing strategy, you need an expert’s help. Our doors are always open for you to get in touch with us.
We are a well-known on-demand app development company helping entrepreneurs and businesses to scale up their applications. We also offer flexible models to hire our mobile app developers. If you wish to know more details, kindly contact us.