A lot of questions arise while transforming your bright idea into a full-fledged mobile application. The first, and most important, is: “Should I charge for my app or release it for free?” In this blog post, we will discuss the pros and cons of free and paid application strategies.
Currently, users can download over 90% of mobile applications for free. That’s not a surprise, actually. With so many applications around, nobody wants to pay for apps unless the user knows exactly what they will get. At the same time, the paid applications are doing quite well and remain profitable. What’s the secret behind that? And which strategy should you actually choose for your mobile app?
For paid application developers, you often have to contend with the fact that you won’t have millions of downloads. Fewer people are purchasing your app because, unlike the free apps, you have installed the psychological barrier of payment. However, even with a moderate user base, you can easily provision your resources and be 100% sure that you’ve got enough money to pay the bill from your various cloud services.
This is not the case for the developers of free applications. With a greater number of downloads, they may not get any revenue at all. If the user base is very big but not active enough, they may not even have enough money to pay for the cloud services. Simply because you have a large application user base, you will consume quite a lot of cloud resources and your bill will be far higher.
A critical factor in building your popularity is your application rating in the market. Obviously, the users carefully examine the rating and the reviews of any application before downloading it.
Free applications usually have lower user expectations. Even if a certain feature is not working properly on your device, users can still put a high 5-star rating and add a positive review for a free app. For free apps, because customers have a lower threshold of expectation, they’re often willing to make exceptions for an app that they see as ‘mostly good.’
This is why free applications have a higher overall ratings in App Store and Google Play, scoring on average 3.7 stars out of 5.
On the other hand, the paid apps always have higher user expectations. Basically, your app can get a dismal one star even for a minor issue, even if it was not intended to work on a legacy device. So, you need to invest more time and money in the development process, as well as quality assurance, to deliver a truly awesome application.
The paid applications have significantly lower ratings in the app stores with an average of 3.3 stars.
However, the users and ratings don’t bring you the money. And that’s what the owners actually want from a mobile application. So, let’s compare the business opportunities for the free and paid applications.
Well, you don’t expect to see ads and banners in a paid app. So, the revenue of the paid app developers comes from the downloads. But before that, Apple and Google take their part of the cake, which is around 30%.
However, the developers can try carefully using some of the monetization strategies, but not at the same scale as the owners of free applications.
The developers of free applications basically have a carte blanche. They can choose from a variety of monetization options. These include ads banners and videos, subscriptions, in-app purchases, and other options.
In addition to that, the development of a free application is usually less expensive than the development of a complex paid application.
I’m trying to deliver the message to every potential client that a free mobile application can gain a solid user base very quickly and these users are attracted by both the free program and a couple of premium features. But at the same time, it’s important not to abuse advertising in the first months – this is perhaps the main rule of the winning the audience.
Delivering a free application to the market is a good way to start. Free apps obviously attract more users, so, you can get more visibility quicker. We regularly advise our start-up clients to deploy a free app with just core features within a short period of time. This Minimal Viable Product (MVP) approach allows their developers to gather feedback from a growing user base who often then become personally invested in the application’s success. As your user base grows, with your loudest cheerleaders being those who have contributed ideas to the app, you will see your downloads rise.
You can later add some cool advanced features to your application and make a paid version of your app. We recommend leaving the free version on the app market too as it will attract new users. Remember that you can use the growing user base of your free app to promote the paid PRO version. However, you can also opt for a subscriptions model, allowing you to recoup revenue on a regular basis.
Summing things up, we admit that paid applications are good for existing businesses with a pre-existing audience. Very often you can see successful paid medical applications, which can never have a counterpart. These applications have a very high risk of failure, so you need to consider this. Finally, if want to market your application to a wide audience, we recommend starting with a free application.