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While the number of apps just surpassed 3M (combined iOS and Android), 93% of mobile apps are downloaded for free. But sadly, only a handful of free apps actually make enough money to sustain a business. Well, most paid apps do not find enough users to sustain a business either. Offering a mix of both worlds (partly paid and partly free), however, can give you a better chance to succeed.  This also cannot guarantee success. Besides subscription numbers, there are too many other things that can contribute to make your app a hit or flop.

While there are pros and cons on both sides, you should only monetize your app with a strategy devised with your users in mind. Remember, all apps are different; their target audience and competition levels are not the same, so their monetization strategy should  also be different. What works for you may not work for another app. This is the first principle to keep in mind when devising a monetization strategy.

Also remember that however well-thought out and meticulous you have been in finding the right monetization strategy, it is very unlikely that you will get result just in few days. Considering the huge number of apps across every niche, you cannot make an impression so quickly. But if your strategy is good, sooner or later it will get results, and then you need to work on a solid retention strategy. Here are seven monetization strategies that have already passed the test of time.

1. Free to premium upgrade

This has been the most popular approach with the vast majority of apps. The free app drives user acquisition. For a more feature-rich version of the same app, users can upgrade to the premium app by paying a subscription fee. This approach, called “Freemium,” is good as long as your free version offers some useful features and content. An uninteresting free app will not gain any traffic or acquisition, and without getting users for the free version, you cannot lure them to upgrade to the premium version. Here are a few options:

  •    In a game app, you can offer gamers the first few levels for free, and then require a subscription to unlock more levels.
  •     A download-based app can let users download a certain number of times, and thereafter can require a  subscription for unlimited downloads.
  •     A cloud app can be offered for free with a small amount of storage space that is best for individual use while a premium version can be offered with a larger amount of storage space suitable for business use.
Freemium:free to premium app upgrade is good if your free version offers some useful features Click To Tweet

2. Gated features

Gated features or payable and locked feature can push free users to purchase certain app features, making the app more interesting or funny. Gated features save the developers from developing two separate versions of the app. Instead, they can block certain features in the same app and only offer to unlock based on a purchase or subscription.

Gated feature save from developing 2 app's versions: block or unlock it based on a purchase or subscription Click To Tweet

3. Getting incentives from advertising and promotions

You can let brands advertise in your app and let them make certain promotional offers based on the activities of your users. Whenever your users earn something from the advertiser, you as the app owner also get something. This is particularly applicable in gaming apps where users redeem their gifts and earn revenue.


4. In-app purchase

In-app purchases are a good monetization strategy for free apps. With this strategy, users can choose to pay for more ease or added value to their app user experience. A small purchase while playing a game can unlock more gaming features or in-game attributes. Apps that are addictively fun (like gaming apps) can benefit particularly from this strategy. Here are a few examples:

  • When playing a mobile game, the user can purchase a new car or gain an extra life to continue the fight.
  • Productivity apps can also utilize this by making some features available only through in-app purchase.
  • In content specific apps, the same can be done by offering certain content through in-app purchase.
In-app purchases are a good monetization strategy for free apps, especially for addictively fun ones Click To Tweet

5. Putting analytics at work for retention and engagement

User acquisition may be the starting point, but it amounts to nothing unless you can retain a good portion of the newly landed users and ensure regular engagement. ROI (return on investment) from your app depends more on the retention of the users than new users coming on board. Various studies indicate that churned users have a bigger buying potential than others. This means that, logically, any user leaving your app has more potential than the users remaining on board. When creating your strategy, it is also important to focus on new users because more than 20% of users get churned following just a single use, as revealed by a Localytics report.

ROI from your app depends more on the retention of the users than new users coming on board! Click To Tweet

Studies indicate that churned users have a bigger buying potential than others, let focus your strategy on them! Click To Tweet

6. Partnering with other app

Partnership with another app can provide mutual benefits by promoting each other to respective users of each app. This is a good way to enhance the scope of acquisition and monetization. Simply offering two apps together for a reduced fee is a good way to promote apps together. For example, you can offer a paid or premium app for free with the purchase of your app. Similarly, the partner app can devise a plan to promote your app.

Offering two apps together for a reduced fee is a good way to enhance the scope of acquisition and monetization Click To Tweet

7. Relevant content

Content is king in mobile apps as well. Today, many content-rich websites are available on mobile platforms as apps, and people flock there in search of relevant content. Ensure optimum navigational ease and loading speed, design app pages for optimum mobile view and readability, and create intuitive buttons to save users from searching for content. Over time, these three aspects will make people decide it’s worth it to pay to subscribe to the app.

#Useracquisition: ensure navigational ease, design for optimum mobile view & create intuitive buttons Click To Tweet


Although these seven tactics may not cover all the ways to promote your app, they should always be considered – combined with other tactics – in your app’s marketing strategies to ensure good performance on the app stores.

Author Bio

Keval Padia is a Founder & CEO of Nimblechapps. He is an Android Game Developer, with acute knowledge of Mobile App Design and User Experience Design. His vision is to become the best mobile development company, which can transform people’s idea into fully functional applications at a very affordable price.

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