Convincing the public that your app is worth their money is a challenging task. While you think your app is brilliant and are willing to put a lot of money on the line for it, most others will be a bit more cautious in their spending on your idea.
Prior to hitting the store with your new app, you need to ask yourself: How much should I charge people to use my app? If you choose to make it free, your only way to make money is to incorporate in-app purchases or sell ads in your app. If those weren’t part of your plan, you’ll need your user-base to pay for your app in the store before they download it.
Before setting a price, ask yourself these three key questions.
How much do I need to make per user for this to be profitable and sustainable?
The more you charge for your app, the fewer you will sell. You need to set goals for yourself, and the best way to set goals is to look at your costs, both past and future. You also want to keep in mind that Apple and Google both take 30 percent of an app’s purchase price. Based on the store taking that 30 percent, you need to look at what you need to net to keep moving forward.
What is my competition doing?
While in both the Google Play Store and the Apple App Store you can change the price of your app easily and quickly, price is a major factor in whether or not a potential customer even considers purchasing your app. Look at your competition, or if you don’t have any direct competition, look at the price of related apps. Your app doesn’t have to be the cheapest to be successful, but what your competition is doing price-wise should affect your messaging. For example, if your app is more expensive than your competition then you need to be intentional about positioning your app as more valuable.
What is the absolute lowest price I could set for the initial release?
I always recommend starting by pricing your app as cheaply as possible. Those first purchases and user reviews are the hardest to get, and you want them as quickly as possible. iOS and Android users are used to seeing app prices change regularly, and if you tell them that the current price is introductory or temporary, they will assume that it is lower than it will be in the future and you will be more likely to get an immediate purchase. If you lower the price of your app, you should also always say it is a temporary/sale price.
App stores are just like any other market these days: forecasts, innovation, supply and demand are all continually affecting app prices. Like any other business, you should be continually evaluating your app’s price to be effective and competitive.
With the release of iOS 8 and Android 5.0, there are several new monetization options that could be huge game changers, too. In-app purchases are here to stay, and best practices for in-app ads continue to evolve. That’s great, because users have gotten more discerning and expect more from their apps, but there are more tools than ever to help you generate revenue.