Free Apps – How to Make Money Giving Apps Away

Free appsYou have a great app and you want to “monetize” it.   You’ve identified your target customer and can communicate your “value proposition.”  If you’ve read our Marketing Services page, you know we believe these are the first and most important steps to a successful marketing campaign.

Now you have to “price” your app. App store metrics from 148apps.biz indicate the average price of an app in the Apple Store is $2.55.  We recommend that you price your app based on a comprehensive PR and marketing campaign.  If our marketing research (or your marketing sense in the absence of research) tells you that your app will probably not sell for as much as you think it’s worth, all is not necessarily lost.  Those same app store metrics from 148apps.biz tell us that almost 100,000 apps in the Apple Store are “free.” You might be wondering how you can make money giving away your app.  Read on.

Promotion, Brand Recognition, and Customer Loyalty. USA Today charges for its paper, but its app (with which you can read many articles) is free.  This marketing strategy allows them to build the brand as a credible, accessible source for national and international news.  I can think of thousands of other apps whose sole purpose is to build brand loyalty.  If you could pay few thousand dollars and elevate your brand in the eyes of hundreds or even thousands of consumers, would you?  Most business people would.

Provide Service and Build the Customer Relationship. Restaurant and nightclub apps, apps for theater groups, apps for hotels and service businesses of all kinds are free.   If I can provide better customer service than my competition, I will.  It makes my customers “sticky” and the stickier the better.

Generate Paying Business. To use another example from the media world, The Wall Street Journal has a free app that offers some content.  But, to get to the stuff most WSJ readers want to see, you have to subscribe.   The app is simply another vehicle to sell content.  Do you have content or services to sell (music, books, articles, photos, advice, etc.)?  Give away the app and some content.  Get the customer hooked with the value of your content and then sell them the really good stuff.

Promote a Paid Service. Using a free app to promote a paid service is one of the most common ways app owners try to monetize free apps.   The concept is simple – the “devil” is in the execution.  The business model goes like this: hook the user with compelling or fun content and offer them periodic offers to upgrade to a smarter, more fun, more difficult (in the case of games), more content-rich versions of the app.  A very similar model offers the user the opportunity to “buy” weapons or other items needed to advance to the next level of a game.  Here’s a link to a recent article by Brad Hilderbrand discussing this “freemium” model.

Provide an Advertising Platform. This is really tricky and will be the subject of future blogs.  To be in a position to make much money selling advertising, you must first have compelling or fun content and you must be able to generate ad views.  In the near future, we will discuss the ins and outs of the two big guys in the market Apple’s iAd and Google’s AdMob and how you can use them to make money.

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Mark M. Stetler is CEO of AppMuse and its related businesses: iPhoneAppQuotes.com, iPadApplicationQuotes.com, AndroidAppDevelopmentQuotes.com, and BlackberryAppDevelopmentQuotes.com. AppMuse is the Internet's leading provider of free app development quotes from experienced, pre-screened app developers for iPhone, iPad, Android, and Blackberry smart phones.

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