Level the Playing Field with a Free

As long as there are developers creating iPhone/iPad apps, the debate about free apps versus paid apps will probably continue. This is because some people will have success with a paid app, and others will generate ad revenue through their free app. Both models can work, and often the success depends on the type of app written and the audience you are marketing to. Some buyers don't mind having ads appear in their free app and will download lots of free apps and use them for a short period of time, or they will upgrade to a paid app to get additional features that were not available in the free app.

One thing that developers should remember is that a free app can help them level the playing field and build their brand inexpensively.

When large app developers enter the App Store with a new app, they have the marketing clout and brand recognition that an independent developer does not. They can release a paid app and immediately start to see large downloads because their brand is recognized and trusted. They have already spent perhaps millions of dollars building their brand over many years. They have many followers already.

An independent developer does not have that luxury and must look for other ways to get the word out about his app. If you offer a free app along with a paid app, you are covering both your bases: building your brand and generating some revenue. You're allowing users to "try before they buy" which gives them a risk-free opportunity before they buy your paid version. Even if they don't buy your paid app, you are building your brand and gaining recognition in a very competitive field. If they like your app, they will be inclined to tell others about it and will also be inclined to look at what other apps you have for download and sale.

Do not make the mistake of thinking that people are not price sensitive at $0.99! With so many apps to choose from on the App Store, your buyer cannot possibly buy even a fraction of the available apps. So, buyers are selective in what they download for free and especially selective in what they purchase.

In this chapter we review the different approaches to monetizing apps. Take a close look at the type of app you are marketing. Game apps tend to do very well with free and paid versions. Games are generally easier to delineate between free and paid as well. For example, you can limit the levels of play in the free app or the number of weapons in the game. Other nongame apps are more difficult to limit on features, but it can be done with some thought. An educational app can offer the first set of test questions in their free app but require purchase of the paid app to obtain all the questions.

Table 14.1 illustrates the different app development strategies you can consider when building your app marketing plan. Ultimately you will have to decide which approach works best for you and also what your budget will permit you to accomplish. One other point that's worth mentioning is that you can always start out with a paid app and then offer a free app later on to help boost your sales. Many developers have had strong success in reigniting their app sales by going back and introducing a free app with ads later on.

Table 14.1 Multiple Development Strategies for Creating Your App Marketing Plan

App Development Approach

Pros

Cons

Paid App—Standalone

Lower costs/faster time to market

Many competing apps, limited brand recognition, slower sales until you build a following

Free App—Standalone

Likely to experience multiple downloads quickly, build your brand

Relying on ad revenue that may or may not result in significant revenue

Free App and Paid App

Build a following, in-app purchase inside free app,

More costly to build and support two slightly different versions of

achieve ad revenue and paid app revenue simultaneously

your app

Paid App—With Ads

Sell app and gain some ad revenue

Not widely used and unlikely to achieve significant revenue from either side

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