Welcome to the second article in our 10-part article series on App Marketing. Last week we covered the importance of understanding and being able to clearly articulate your product. This week we will talk about how to price your app and using pricing as a marketing tool.
Determining the price of your app can be as complex as coding it, especially with the growing options available.
Free, paid or freemium? In-app purchase or subscription?
Pricing is not just a mandatory step in the submission process but is also an important part of marketing your app. Users will factor in price when making the decision to download and use your app, so choose wisely.
Determine Your Revenue Expectations
Start with understanding your revenue expectations.
Are you trying to recoup the cost of developing the app? Or are you looking to turn a profit? Do you see this app as your primary business? Or will this app drive sales for a business already established?
Once your expectations are clear, it’s time to ask yourself how your app will meet these needs and what monetary goals will you set to gauge it’s success.
Do Your Research
To help with your pricing decisions, look to your competition to understand what pricing models and figures they are using.
Position yourself against these apps and make sure that your app is able to hold its own if not stand out from the crowd.
If you are expecting to make your app premium when other apps with the same offering exist as free, for example, you will need to either rethink your pricing model or modify your offering to ensure the value is there to increase your chance of success.
Price to Sell
Don’t forget the user when you make your pricing decision. Will your user pay for your app? Would they be annoyed with ads?
This is a good time to leverage your networks, existing database, social networks and forums if you have them. Getting some feedback directly from your potential users will help guide you in the right direction.
Test, Test, Test
Once you make a choice, give your pricing decision some time before making any changes.
Price changes should be planned and should be rooted either in marketing or as a reaction to your market.
If you do decide to modify your price, keep in mind that changes in price will have an immediate impact on volume (increase or decrease) so let things cool down before you make the call as to whether your decision was a successful one.
It’s Easier to Take Away than to Add
When setting your price, it’s better to err on the side of more then less. Users are more apt to accept a price reduction than they are an increase so if you are teetering between two numbers it’s better to select the higher amount.
Starting high will also give more room for promotions.
Use Pricing as a Marketing Tool
Planning changes to your price in the form of sales, discounts, coupons and giveaways are great promotional opportunities for your app.
Sales & discounts work well to stimulate known lulls in purchase behavior as well as to spike growth related to calendar events and holidays that fit well with your product.
Coupons and giveaways act as great prizes for contests and rewards to your community and social networks.