New Ways to Make Money

When it comes to monetizing your business app, there are several proven strategies for providing revenue streams. The method in which you choose to monetize will significantly influence app growth and customer engagement, so we’ve put together this guide to break down several different approaches for getting the highest returns from your app.

'Lite" and Premium Apps

This model of monetization offers a free ‘lite’ version of your app alongside a paid premium version. Typically, the lite version will have in-app ads as well as several of its key features disabled. This encourages the free users to upgrade to the premium version to both unlock all of the app’s functionality and also disable ads.

The lite app model works well because it introduces new customers to your app at no cost or risk to them. Properly balancing the available free features with incentives to upgrade to the paid version allows your business to establish a growing base of free users which can then be converted to paid ones over time. This allows the developer to earn revenue in two ways from a single user; in-app advertisements from the lite version and then the full price from the premium version when they eventually upgrade.

Freemium Apps

Most commonly used by gaming apps, this model utilizes a single, free to download app with a number of available in-app purchases. These purchases can be anything from extra lives or level progression in a video game to upgraded messaging and matching features on a dating app. Some apps offer the user a one-time payment to disable all ads indefinitely.

It is critically important for developers to strike the right balance between offering free users enough features to keep them engaged, while also ensuring that paid users feel like they are getting their money’s worth. After all, if free users stop playing then the paying users will also inevitably decrease because there’s not enough people to play with.

Subscription Based Apps

This model of monetization has become increasingly popular in recent years, particularly so regarding service-oriented apps like Netflix, YouTube, and Headspace. Typically these types of apps allow a limited trial period in which the user has full access to the app and its services for a few days or weeks. Once the trial period expires, the user must pay a recurring subscription to continue accessing the app.

This model of monetization generally requires a larger initial investment; unless your app is feature-packed and runs flawlessly with a clean UI/UX, people won’t be willing to stomach the recurring subscription fee. But if your app is fully-fledged with regular content updates and can cultivate a steady user base, the subscription model offers developers a steady, reliable, and long-term income.

Paid Apps

Some developers only offer a single, paid version of their app with no free trials or lite versions. Generally speaking, apps using this model offer some kind of unique functionality or utility that can’t be found elsewhere. It is perhaps the most common pricing model for productivity apps such as Monday, Toggl, and Serene.

Apps with an up-front price tag have seen a decline in popularity recently as users have widely become used to some form of a free trial. Putting a barrier to entry before the user even has an opportunity to try the app tends to dissuade most people. If you decide to go the paid app route, you must be confident that your product offers something special that users won't be able to get for free elsewhere.

Partnerships and Sponsorships

If your app is performing well in niche markets, companies operating in that space may be willing to sponsor your app as a means of getting their brand in front of your users. When building your app it may be worth considering the kind of user base it will attract and the brands that could potentially be interested in that audience. With a substantial enough user base, it is possible to monetize through sponsorships, brand partnerships, or even outright acquisition.

Other Strategies for Monetization

While the monetization models described above give insight into some of the basic approaches for turning a profit, there are other methods you can utilize regardless of how you decide to monetize. It may not seem obvious at first, but creating email lists can be a game changer. Utilizing an email tie-in with your app drives engagement with your users, which in turn leads to higher profits. People rarely change their email addresses, which means email marketing campaigns are a great way to let your users see and engage with your content while also keeping your brand at the forefront of your customers’ minds.

Another key aspect of maintaining revenue streams from your app is creating and maintaining a strong content strategy. It’s one of the best ways to convert new or infrequent users into long-term paying customers. Most paying users make only one or two small purchases before moving on to a new app. Keeping your app up-to-date with fresh, curated content will increase user retention and profits in the long term.