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Apps: To Charge Or Not To Charge

Apps.jpg

When apps are about to launch the one question everyone has is less so the “How much should we charge for this thing?” and more frequently, “Should this be free or not?” But it doesn’t stop there! There’s paid, free, trial or freemium! Yes, selling your app is harder and confusing than you thought it was months ago, but let’s compare the two and see which is the lesser evil.

Something you may not realize is that there’s a cultural difference between Android and iPhone users: overall, Android users are much more skeptical when it comes to paid apps, whereas iPhone users have been paying for apps for years, so a $2.99 charge may seem more like peanuts to them.

Before there was the range of what we have now, Apple was king. We see a current pattern of iPad users taking up 80% of apps being paid apps, which to even an iPhone user would be astonishing. It all comes back to what’s available on iTunes, which is now music, movies, podcasts, and everything else under the sun as far as content. Not to mention iTunes gift cards being “a thing” people actually gift to one another.

On the Android side of the market, there are far more younger users and the general consensuses is that more people are into free apps and are wary of paid apps, in fact, App Annie claims that 2014 marks a record for having 98% of Android app revenues coming from free apps.

 

Free or Unpaid Apps

Competition
Obviously there is way more competition for free apps, there just simply are way more.

Lead Quality
The value of a lead dwindles when an app is free, because of the effort and stock the user puts into paying for the app in the first place. I think we all remember getting our first smartphone and immediately downloading every free interesting app we could find.

Expectations and Likeliness to “Get”
As I mentioned earlier, many people will download apps for the sake of downloading them because they’re free – which unfortunately messes a little with app analytics. Also, the expectations of a free app are generally at their lowest now. We all know the bugs, and pop-up ads and restricted content that come with free apps already, and have collectively evolved to either ignore free app annoyances or shell out for the ad-free version.

Ignored and Forgotten
Just because a user downloaded your app doesn’t mean they actually use or remember it exists. Free apps can unfortunatley inflate numbers and the number of dormant and unused free apps grows every day.

 

Paid Apps

Competition
There are less paid apps out there so many publishers may worry about what their competition has up their sleeve.

Lead Quality
The kind of leads you get from having a paid app are far superior to those of a free app. Paid app clients are subscribed and therefore more likely to spend additional cash.

Expectations and Likeliness to “GET”
It’s sticky out there since there are hundreds of ways for people to find loop holes and get what they want for free. However, even with that existing in the ether, users are still willing to shell out a few bucks for features, paying closer attention to apps of high quality. The newer generations of people however are extremely tech savvy, and will likely be the next generation to contribute to paid apps.

Ignored and Forgotten
Some stores offer refunds for apps after a certain amount of time but there are some hesitant users out there. We’ve also noticed that users aren’t willing to wait around for your app to free up and are just as likely to download a competator’s app just because it costs less than yours.

Engagement
Engagement goes hand in hand with leads when it comes to paid apps. More engagement will come from paid apps, I mean, you wouldn’t pay for the gym and just NOT show up?

Oh wait, I do that all the time…

I hope some of these points have swayed you on whether you should keep your app at zero cents, or, to dare and charge a whopping $2.99. Ultimately, everything varies by app and industry. All the best apps out there are the free ones that have incredible paid services (do I even need to mention Uber?).

The main part is trying to figure out how you can monetize down the line, if you can’t monetize directly and immediately in the app store.

Topics: Mobile