How to create a successful app - Show me the money (Part 3 of 4)

This is part 3 of our "How to create a successful app" article - see Part 1 and Part 2

  • The scope of mobile (Part 1)
  • How you can acquire customer (Part 2)
  • Show me the money (This part)
  • Finding app ideas (Part 4)

Show me the money

You want to make money from your apps. It may be pin money, it may be to fill your pension pot, or it may be just for a good pub boast. Or it could be your full-time income, if you're very dedicated. But how do you go about making money?

Apps can be charged for in many different ways but here are the key ones:

  • Free - the game is free, no charging. Not sustainable. Who's going to pay for the test phones and development kit?

  • Free - Lite - the game is free, but limited in some way to try and get people pay for the full game. In our case we limited our Android games to a subset of puzzles, because when we launched in-app purchasing wasn't available. The downside of this approach is that your downloads/reviews are split across two app store entries. Also it is more development effort to maintain two releases. The customer can also get confused by having two versions on their device.

  • Paid - you pay for the app and that is it. Definitely sustainable!

  • Free + In App Purchase (IAP) - this allows the customer to get the app for "free" and then make purchases within the app. These purchases could be for one of items that never expire (a pack of puzzles in our Crossword) - or for n in game currency). The classic 'Freemium' model relies on certain percentage people wanting to convert to paying to skip/gain advantage/improve various aspects of the game. Personally I don't really play any coin based IAP games, as I often assume the game will be crippled in some way to force the free players to play (see Candy Crush et al, and waiting x days for things to complete).

  • Free + Adverts - this normally involves including a third party advertising solution such as AdMob , and you get paid a very small amount per click-through. Adverts tend to work with apps that are open on the screen for a long time, that can afford to lose the screen space, that have wide appeal, and are difficult to monetise with the other channels

  • Paid for by someone else - corporate development for other people where the app is free but includes brand based advertising is another model that works well. However it probably won't provide you with the passive income stream and is a bit of a one-off deal.

Obviously the charging route you take affects both the user acquisitions but also the nature of the ideas that you can pursue. For example if you are trying to build a new social network it is going to be a struggle to charge for the app, unless there is some clear angle (maybe a premium paid social network of rich people or similar). Equally some ideas make full use of a given device’s technology which in turn limits the platforms it can be made available on – in this case how you acquire customers might be more limited/focused.

As with everything in life there is no single correct answer, but instead you need to weigh up where you want to go and try and determine the most likely route to success. Once launched you can iterate based on your analysis of the app out in the wild.