Let’s be honest: developing an app is no easy business. First, you need to spend countless hours writing complex algorithms, release the app, promote the app any way you can to get your first users, fix initial bugs, provide regular updates, and so on.
It is almost an endless cycle of work that will consume every minute of your day.
In the meantime, you need to figure out how to generate revenue not only to put some food on your table but also to cover the ongoing operational costs that are essential to keep your app up and running.
However, earning money from your app is easier said than done. Asking for a small download fee before the app is downloaded is always a risky thing and can turn away many potential customers. The simple truth is that most people always opt for a free alternative, especially when it is a new app that they haven’t used yet.
So, the better question here is, what’s the right monetization method for a new app?
Meet in-app purchases!
This approach encapsulates the best thing from both worlds – premium and free. Users get to download your app for free. That way, you get maximum downloads and grow your user base. At the same time, for a small fee, they get to enjoy some premium features.
What are the in-app purchases?
An in-app purchase refers to selling or buying goods or services within a mobile app. That way, developers can generate income from their apps while keeping their core functions free for all customers.
According to statistics from several sources, in-app purchases generate up to 20 times more revenue than premium apps. Furthermore, they account for almost half of all mobile app earnings. According to experts, the overall revenue from in-app purchases is estimated to reach $70 billion by the end of 2020.
The four main categories of in-app purchasing are:
· Consumable purchases
· Non-consumable purchases
· Auto-renewable purchases
· Non-renewable purchases
Top Benefits of in-app purchases
Here is the short version of the many benefits that come with an in-app purchase option.
1. Excellent Exposure
On average, free apps get exponentially more downloads than paid apps. The more downloads you get, the more preferential treatment the app will receive from the store itself. As a result, it can even be featured in lists like the “best app of the week” or “top-grossing apps”.
2. Build a Brand
It is essential to keep your users engaged and using your app. Whether they will opt for in-app purchases at some point in time is another matter. Once they get “hooked” on your app is much easier for them to decide to make an in-app purchase.
3. Ease of Payment
Making an in-app payment is done with just a few taps, and there is no need to fill out lengthy forms. Once they make their first in-app purchase and they receive their first incentives, it all becomes like second nature to them.
4. Easy to Promote New Features and Goods
Through your in-app purchases, you can easily push new goods, services, and features, toward the users. You can do that for free, and you simply lay them out as options for the users.
In-app purchases are not something new or revolutionary, but they seem to be very effective in monetizing apps of pretty much every kind. It doesn’t matter if you have weather, fitness, learning, or some other app. If you have users, then most likely that you can sell them something through your in-app purchase feature.