A large diversity of pricing strategies is great, however, it might also cause certain difficulties to choose the approach, which would turn the most optimal for your specific product. Thus, our task today is to help you make the right choice.
Firstly, we shall distinguish the most pervasive pricing strategies, so the below are presented your available solutions:
- ads monetization model;
- freemium pricing model;
- in-app purchasing;
- paid services;
Choosing the right monetizing model
We shall identify the key points to consider to ensure you get what is required. Just heed our advice.
#1. Remember who your final audience is
Do your utmost to make sure your online platform responds to your clients’ needs. And, to monetize your application wisely, you better carry out the research to learn your demographics.
Bear in mind that it’s easier to get smaller groups monetized. Compared to the larger unsegmented auditory, little groups will better understand your site values, thus, they’ll be easier convinced to spend money on it. While building the core of your potential users, remember about essential aspects to take into account, say, age, location, gender, behavior details, and the like.
When thinking through how to monetize the app, determine, if your online program is actually valuable for the customers. Providing multiple precious benefits will guarantee to obtain more paid clients.
#2. Analyze the market niche and the rivals
To develop a strong value-based monetization strategy, the further step would be to explore the market conditions to identify similar online resources you’ll confront, fighting for a paid audience.
For monetizing lots of customers, take into consideration the following:
- Don’t get too greedy to put your prices higher than your competitors. Of course, you’re free to do so, in case you figure out how to persuade your people to pay extra.
- It’s crucial to offer your users at least one unique function, thus, you’ll manage to engage a wider audience that would pay.
- Do the research on what pricing strategies your rivals apply, and then design your own model based on the results you get.
#3. Consider solvency
Everything you’ve learned while performing the first two stages will turn useful and priceless to deal with solvency. At this point we shall take a look at sales geography as well.
Interesting fact is that the Apple audience is presumed to be more solvent, consequently, they are more willing to pay for accessing exclusive service functionalities. At the same time, Android clients are less eager to purchase in Google Play or App Store.
Geographically, most solvent users live in Japan, Great Britain, and the USA. And, on the contrary, the populations of Brazil and the Eastern European countries will hardly agree to pay for one-of-a-kind features.
Hence, a smart approach would be to start with launching an iOS solution, focusing on English speaking countries. Eventually, depending on the circumstances you’ll design other platforms. That would be the best-case scenario, however, sometimes the situation is beyond our control, so we deal with what we have.
You mustn’t get discouraged, if, let’s say, your Brazilian people prefer Android applications. In such a case you cannot go for paid models, however, you can take advantage of sponsorship, in-application purchasing, and ads.
#4. Choose advertising formats carefully
In-app advertising is pretty universal, thus, it gets greatly along with any other pricing strategy. Still, there’s one single exception – the fully paid apps, since they must be totally ads free.
Ads shall be implemented properly. Actually, there’s a wide diversity of ad networks that help with monetizing traffic, and startup owners aren’t always open to trying different solutions. It happens that businesses pick one model and don’t put any efforts to assess its efficacy or to undertake the competitive analysis.
One more thing that might go wrong is the selection of the ads grid. Did you know that Effective Cost per Mille, shortly, eCPM, wouldn’t help with drawing proper conclusions? Additionally, it’s critical to monitor average revenue per user, the impressions’ number, and the Fill Rates. The last benchmark reflects the support service capacity – the higher that indicator gets, the more efficient a chosen ad slot is.
#5. Get a scalable monetization model
For sure, you keep wondering what would be the greatest pricing strategy for your product. The answer is simple – the model to comply with lasting development strategies. Your site future growth would give numerous monetizing opportunities.
The objective is to steadily increase your people’s involvement, as it’s less complicated to monetize frequent users. Thereby, pay extra attention to users’ journey, and keep an eye on session durations, DAU/MAU, retention rates. Furthermore, make a fitting scalable model that would change and evolve together with your resource.
And, keep it logical. It doesn’t make any sense to block free-of-charge access to features which once were free. Just add new impressive functions to your program, making those premiums.
#6. Ask for assistance while selecting your service monetization strategy
Being a pro in your business area doesn’t imply you don’t need any help from pricing strategy experts. There’s much at stake, so taking any risks would be unreasonable. Competent specialists can help with saving up to 60% of the ad budget. Moreover, they know how to bring more customers to lower CPI.
#7. Try diverse models
It’s pretty possible that a pricing strategy of your choice might prove to be unsuccessful and inefficient. However, it’s not the reason to get upset, just test other monetization approaches. At some point, you’ll figure out which model is the most optimal for your particular case. By the by, the mixture of a few monetizing options could be a great strategy as well.
Making your own pricing blend
Such a solution is called a dynamic pricing strategy. In fact, it represents a combination of different monetization means, being able to get customized to fit a particular person. Actually, it’s up to you to experiment, mixing up multiple types of monetizing models.
A few successful examples
- eBay & Amazon have decided to put together in-app purchasing, ads, and smart notifications;
- Megogo has their free audience who enjoys watching movies together with ads, and the paying audience who subscribes to get rid of advertising.
- Angry Birds owners have combined banner ads, rewarded video clips, paying for next levels, etc.
Well, now you know everything to figure out what pricing strategy would be the best option for your product. So, take it seriously, review of the aspects mentioned above, and it’ll work perfectly.