App users are great. App users that spend money are even better! But it's not always easy to find a marketing path that leads to easy user acquisition and revenue-generating user activity.
Apps that have a high barrier to access (ie. paid downloads) typically struggle with user acquisition. In fact, the amount that most people are willing to pay for an app is $0. Only around 6% of apps that get downloaded were actually paid for before the user downloaded it. This challenging trend has paved the way for the ever-popular freemium model, which is widely adopted by the vast majority of apps available in the App Store or Google Play Store.
However, the freemium model comes with its own challenges for driving revenue. It's easy to give something amazing away for free, but it's not quite so simple to convince acquired users to start paying for something after the fact. Undoubtedly, there is plenty of potential for generating revenue through mobile advertising, but this can sometimes ruin the user experience and it can be thwarted through the use of ad blockers by users.
In-app purchases are a great way to find a balance between easy user acquisition and encouraging purchasing activity, but what's the best way to drive the growth of in-app purchasing trends with your active users?
Guarantee A Path To Even More Value
The freemium model works because it provides developers with the opportunity to showcase the value of their app without building barriers to user access. In this case, first impressions are very important and hold the highest impact on determining retention or churn of a user. Further to this, the app must deliver on the fundamental promise made towards the value of the app. With this in place, you can hold onto users and begin to lay paths to encourage more in-app purchases from them.
This works best if the users trust you to deliver value on your promise and they can clearly understand the increased value that they would receive if they are willing to pay for access to other features.
Use In-App Subscriptions To Create Recurring Revenue
In non-gaming apps, in-app subscriptions drove growth in user spend by 120%. Positioning a set of enhanced features or exclusive access within an in-app subscription is a strong method for building out recurring revenue for an app, which is still appealing to users if they see the value on the other side of your offer.
This is also another opportunity for the freemium model to shine. If you stand by the enhanced features of your app, offering a free trial to premium access within your app is another way to move people towards becoming a paying user.
Ad-Free Access For Paying Users
Most users understand that apps take a lot of time and effort to develop. In many cases, users that have an incredible UX and find value in an app are willing to support the app in some way. In some cases, this may mean they are willing to tolerate exposure to ads in order to use the app for free. However, this can also be a cause for churn for some users if the ads become unbearable.
If you provide an option for users to gain ad-free access to the app through a subscription or payment, it provides an alternative that can be very appealing. It's also a key strategy for apps that don't have extra features or enhanced access to offer their users without detracting from the value they can offer under the freemium model.