Here’s what you should know when pricing your mobile app

Businesses are striving to reach far and wide, and mobile apps are becoming their best friends. As internet penetration reaches impressive heights almost everywhere in the world, so has the availability of cheap smartphones. Smartphones and tablets these days have capabilities comparable to personal computers on various fonts.

The rate at which different industries are implementing mobile apps is indicative of the boom that the mobile app industry is currently experiencing. For big enterprises, the cost of building an app is not an issue. However, for budding companies and startups, it is a huge factor for consideration, and oftentimes makes or breaks a deal.

The cost businesses incur in building a mobile app will ultimately decide whether you plan to offer your app to users for free or charge a fixed price for it. According to Distimo, an app marketing consultant, the average price of mobile apps and games has gone down by 28%. The revenue generated by the freemium apps, however, has increased approximately 10 times.

There are several facets of app development that can decide the price for your app. Amount of man-hours, purchase of any third-party license, testing costs and marketing costs are some aspects that determine the overall cost of development. After these costs are calculated, you can set the price of your app.

However, at times, things are not that simple. Charging upfront for an app may deter the users from downloading it as they are not aware of its capabilities and unique features. Another way, for example, would be to offer a free lite version and a paid full version. Depending on the type of app and who the end users are, you can zero-in on a way to fix the app’s price.

How much should I charge for an app?

There are multiple ways to determine what one should charge for an app.

A comparative analysis can give better insights and help you settle on the price in a logical manner. You can look for at the rates of similar apps in the same category and look at what else you bring to the table. The category of your app plays an important role in app pricing. For an instance, utility apps are often in an accepted range of $3 to $5.

Users would definitely like to have their apps for free. But don’t be afraid to offer your app at a price if it is really complex and advanced. In this case however, your app should look polished and have some groundbreaking features. Failing to meet user expectations will lead to negative user reviews and would be detrimental to the app’s future prospects.

Factors that determine the price of your app

In-app purchases

According to surveys, in-app purchases account for 80% of the revenue that apps earn. If you plan to offer in-app purchases to your users, you might like to offer your app for free. If your app’s content is good, users will be hooked. You can then offer premium content or virtual merchandise through in-app purchases.

Freemium models