How to choose the best pricing strategy for your mobile app

Mobile app pricing is one of the difficult and crucial elements of mobile app development. It is must to apply correct pricing strategy, if you want your app to get noticed on app store. There are many factors to consider when selecting the right pricing strategy for your mobile app. In a survey, it was found that more than 30% of the traffic comes from mobile devices, and hence it is essential to choose a right pricing strategy.

Before we go into detail about product pricing strategies for mobile app, let’s see what pricing strategy is.

What is pricing strategy?

· Free - The free apps are completely free to download in the app store, where their main source of income comes from advertisements. However, free apps are created by companies that are creating a product or service extension of what they offer. Free apps are meant to serve as a tool for customer retention, communication, customer service and other related things.

· Freemium - These apps are free to download, but will have limited functionality and features. Companies started creating apps with in-app purchases, allowing developers to charge for extra features. Customers can pay more money within the app to open the features or speedup the game play, which eventually increases the value of the app.

· Paid - As the name says — the users are asked to pay once for the app to download and use it. However, these apps have decreased popularity over years, due to the increasing number of free and freemium apps. Purchasing the app for one time is one of the common pricing strategies. However, according to the experts of reputed mobile app development companies — — it is the least effective approach. Paid is still a powerful pricing strategy for certain apps.

· Paidmium - These apps are mixture of paid and fermium models, where users are asked to pay for the app, but have option to unlock additional features by paying more. Paidmium is not yet a powerful pricing strategy, but it has the potential to unlock new revenue streams. Paidmium may work well for music apps, social networking and navigation apps. Though this pricing strategy forces you to provide reasons for the users to make purchase, it can help you generate ongoing revenue.

How to choose your pricing model

· It is must to analyze and understand the purpose of your app. Check whether you want to target large user base or provide value to smaller niche market.

· Know the cost of creating the mobile app and what you have to do to make profit or fulfill your goals.

· Check what your competitors are doing. If there is any substitute for low price point, you can proceed with them — — as the main goal of any business is to beat your competitors and earn profits.

Free or freemium models work best, when it comes to acquire large user base. If you want to offer freemium apps, you should focus more on providing your customers with valuable features and functionality. Users look for more storage, backup or line items in freemium apps. They don’t mind paying one time subscription fees for value added features and functionalities.

On the contrary, paid and Paidmium apps works well when the value of the app comes from the point of content of the app. Consumers love to get clear benefits of using the app by paying one-time fee, rather than having different tiers of service.

Best product pricing strategies for your mobile app

· Test the product at a variety of prices

The best way to price the product is to test it on different prices and see how the potential clients respond to it. An app is something that is not just what it is worth for, but something which the customers are prepared to pay for.

The best thing about mobile apps is that they are recurring revenue streams. Hence, you need not to just see what the revenue is per price, but should consider what the recurring revenue model looks like. Test the product on a variety of prices and see how the clients respond to each price. Sometimes, app developers offer the product for free to gain huge volume of subscribers and generate revenue from advertisers.

· Value of product should always be greater than the price

Pricing is not just numbers, but is more about human behavior. When people buy things — — they put forward comparable products or things that they come across. There are be different prices, depending on how they are framed and the story is conveyed to the customer. However, the value of the product must be greater than the price to gain customer attention.

Consumers will be eventually ready to pay whatever is the amount, if the perceived value is greater than the price.

· Design what the user wants

Before you think of pricing the product, you should consider many factors that enhance the value of your mobile app. You might have great ideas, but they will be of no use — — if the developers fail to use your ideas effectively. The design of the mobile app should be extra-ordinary with stunning features and functionality.

You need to figure out the cost of your business. If you are going to create an app and depend on the subscribers, you should consider releasing new updates once in 3 months. This way, you can put a price on the updates and quote the subscription cost accordingly.

Steps to choose the best pricing strategy for your mobile app

· Users expect more from paid apps

You should decide the cost of app based on the required amount of users. If you want to more number of users for the app to work, you should release it in ‘Free’ version. The initial pricing becomes flexible, if the app is not focused on the number of users. Adding initial cost of app may decrease the number of times an app is downloaded.

Users expect more features and functionalities from the apps that are ‘Paid’. Users don’t feel like paying each and every time a new update is added.

· Understand the market demand

If the app is popular in market, you can set price based on the existing price expectations. If the idea of your app is new or unique in the market, you need to understand the demand of potential user and how much they are willing to pay for your app.

Setting a price based on the market demand will help you know how valuable the app is to potential customers. Apps that can save time and money for the customer are demonstrating their value and you need to think from the view of customer to set the right price.

· Price should be reasonable for the customers

Before diving in to the mobile app development lifecycle, it is must to go through a series of important considerations that streamline the decision making process. The pricing strategy should create a meaningful revenue stream and loyalty among customers. You are likely to provide in-app upgrades down the road along with enterprise plans.

The price should be fair and reasonable for the customers, as nobody likes the idea of using a highly- priced app or an app that may not be there for at least six months. The pricing should also be sustainable for your business, as no one wants to create an app for short term revenue.


Take the product pricing strategy seriously, as it is one of the important stages of mobile app development.

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