Pricing Your App for Success

You have finished making the next groundbreaking iOS application, time to celebrate right?  Wrong.  Now comes an equally important next step: pricing your application for success.  The current iPhone app price is currently around $2.85 and many developers even undercut that price and sell their product at $.99.  Choosing how to best price your app is critical to its success, and one should not approach it as some sort of a guessing game.  Rather, if you take the time to answer the next few questions you will be on your way to maximizing your app’s success.

1. What are you competitors charging?

Unless your application is 100% unique, chances are there are competitors already in the app store.  Take a look and see what they are charging as this can be a great starting point when deciding how much to charge for you app.

2. What makes your app different from others?

Your app is likely at least somewhat unique and for this reason it is important to pinpoint what makes yours special.  Does it have better graphics? Integrated features? Better controls?  By figuring out what features of your application are unique you can better understand your app’s value.

3. Where does your app stand in the market?

You application is likely a best fit for a specific type of consumer.  Picture this consumer and then find out specific data on them.  Are you trying to sell to college in a particular region?  Look up how many students there are and how you can best reach them.

4. What are your development costs?

This question is very important to ask yourself when you are choosing to price your app because it exists in a direct relation to your current finances.  Remember, this is just the amount of money you have spent, but also how much time you have put into the application.

5. How much does it cost to have your app developed by another company?

Finally, realize that some large firms can create applications much more efficiently than smaller firms because they already have staff developers and graphic designers.  It may be worth it in some cases, for instance a video game, to have some of your own development costs outsourced to a larger firm.

After you have considered all of these questions, you are now ready to start deciding how much to charge for you application in order to make sure its successful.  Now is when you need to do some soul searching, and figure out how you gauge your own success – does it mean generating twenty thousand dollars on an app that costs five thousand to produce, or does it mean generating one hundred thousand dollars on an app that costs twenty thousand to produce.

Take for instance an app for which you charge a very common $.99, minus of course Apple’s 30% fee, you would need to generate nearly twenty-nine thousand downloads in order to earn twenty thousand dollars, or nearly one hundred fifty thousand to earn one hundred thousand dollars.  That is a lot of downloads to achieve, and we have not even taken into consideration development costs.  Consider for instance that you spent five thousand on development, and that you think you could sell one hundred $.99 apps a day, that would take you seventy days to break even on you investment.

To help you understand, take a look at the following chart:

The above chart shows that instead of aiming for the bottom of the barrel, it may be worthwhile to charge a little more for you app at the beginning and then monitor the results.  Try maybe $1.99 so you have room to move up or down considering what type of results you are seeing.  App developers take different approaches regarding promotions as well.  Some developers see that lowering their price has an upward effect on sales, others have seen no effect whatsoever.  For this reason, it would be to your benefit to experiment with different price points that make sense considering the research you have completed on your competition.

Remember, some apps sell for well more than $.99 and you should not be afraid to price your app higher.  Indeed, if your application is truly unique there is no reason not to charge a premium.  However, people are never willing to pay for poorly designed apps and making sure your application is a good value at any price is critical to its success.

Video Transcription

Pricing Your App for Success

The book How to Make Millions with Apps will share with you the secrets of how you can create apps with no programming, coding, or design experience. I’ll even share with you the little-known secret of how you can create apps for free. This and so much more.

I’ve even included over $128 worth of free bonuses and resources that include my app creation blueprint. This is what I use and it’s what I’ve built my entire app business on. And I’ll share with you a little secret – I’ve got over 150 apps in my app portfolio and it’s growing on multiple platforms every single month. And all this with no programming, coding or design experience.

And you might be thinking, “Hey, I’ve got a really limited budget.” I can share with you how to capitalize on your limited budget and publish an app that makes money. So if you really want to know these secrets, How to Make Millions with Apps is the book that’s going to expose all these secrets and make it so simple for you to succeed at creating an app.

What You Need to Know about Pricing Your App

“Yeah, I’ve just spent the last month, two months, six months developing my app and it’s done. I’m just going to put it in the app store and just sit back and make my millions.” Well, I’ve got some bad news for you – that’s not necessarily going to happen. You’re just starting the work, the marketing, the localization which is translation to other languages. The work’s just really beginning and you’ve reached a milestone but now let’s talk about pricing.

The biggest evolution from 2010 to 2012 was the impact of freemium and free content. So a lot of the top apps were going free and having a micro-payment system, in-app purchases and ads built into them. If you’re going the freemium model, free apps have a completely different revenue strategy and business model to paid apps, so don’t think if you go unpaid you’re limiting yourself. But I always recommend creating a free version and a paid version and running them together and using different promotions or different pricing strategy than the paid version.

There’s many ways that that helps you and you’ll be amazed at the revenue differences, the pricing differences there and how it really impacts your bottom line. But you’ve really got to choose carefully – free and paid – and if you’re going paid you can create multiple paid versions of the app and just because your competition are selling it for $1.99 or $2.99 doesn’t mean you’ve got to come in at $1.99. You’ll be amazed at how that $1.00 makes a big difference in price.

But also, if you’ve got paid apps make sure you have in-app purchases, and whatever you do start increasing the price of your in-app purchases. Just having them all for $0.99 is crazy. There’s some apps that have in-app purchases for over $400. So get your in-app purchases up, double the price of your in-app purchases, create bundles, create unique pieces, create things that are $4.00, $2.00, $10.00, $19.00, $29.00 coin packages – you’ll be amazed at how people want them. Give them a one-time offer to buy a few items at a premium price where they save a few dollars. All that other type of marketing that’s applied everywhere else in the world still applies to revenue and marketing strategies.

But here’s a few good questions when we’re talking about pricing strategies:
What are your competitors charging?
Be aware of it, don’t undercut them, and use it to your advantage. You might want to create a $2.99 version and then a $9.99 version because the reality is when you have a $9.99 version you are attracting a totally different customer than the $2.00 and the free one. So bear that in mind – there is always, always going to be people who are free and they’re never going to be paid, and some of the research that’s coming out now is it takes people to use your app 8-12 times before they’re actually going to spend any money with your in-app purchases. Then there’s that other demographic and that other audience that if you offer it to them straight away they’re going to buy it.

A buyer is a buyer is a buyer, and they’re actually what we call “whales.” We actually want to cater to the whales more than we necessarily cater to the free people. The free people help get more exposure and things, but the whales which are the people spending money, and the percentage of them spending big money are the ones that pay for further app development, pay the mortgage, pay the price on the fancy car, the fancy house, and everything else. So if you really want to make good money learn how to attract whales and what whales are spending money on.

What makes your app different from others?
And this is one of the things when you’re in the initial stages you want to factor into your pricing strategy and work that out. What are your features and benefits and how can you put that into all your marketing? But make sure your customers understand that from the get-go. And this might be something you want to factor into your logo design and your promotional graphics so you can really get your message across when other people are looking. If I’m just comparing your app to your competitor and all I’m seeing is the logo and the title, you might want to change the name of your app to include more, use a longer title. Little things like this help.

Where does your app stand in the Marketplace?
This is, once again, finding your best customer and getting the fit.
What are your development costs?
How many apps do you have to sell to cover your development costs? Have you even worked that out? Have you thought about that? What’s the difference between $1.99 or free or $0.99 and $4.99? It’s a dramatic difference in sales to cover your development costs for you to break even because remember you’ve got development costs, marketing costs, net profit, and profit. This is what you really want to work out and work out what this next six months, the next twelve months of your app lifecycle is really going to be like.

So on this post we’ve got a table that explains the profits that you’re getting because you might be selling your app for $0.99 but you don’t get the $0.99 – you’re only getting $0.70 out of that because Apple’s taking their $0.30. So work that out; you’ve got to factor that in to the effect. You’ve also got refunds, and how refund works with Apple and Android are all slightly different, but you’ve got to factor in there’s going to be a percent of people who you’re never going to make happy, and even for $0.99 they’re going to want a refund which is crazy.

So here are some great questions and topics that you can factor into your pricing strategies and you’ve got to start working out what the hell is your pricing and marketing strategy? And don’t just go cheaper. If you’re just competing on price you’re absolutely crazy because there’s some great promotions you can do.

For example here’s one of them, here’s a tip that I give to some of my top-paying consulting clients: Set your app out at $2.99 or $3.99, put it out there for a few weeks, get some downloads. It will get indexed and crawled on all the websites online. You can then drop the price to free or $0.99 for a weekend or something and you’ll get a spike in downloads because your app price changes be indexed by all the app review websites and saying, “This app’s now on sale! This app’s now on sale!” You can do press releases that reinforce your app being on sale. Sometimes you don’t want to compete with the free market – that’s why you create a free app that has a completely different strategy so you can cater for that.

And remember, having a free app with its own unique revenue strategy means you don’t have to decrease the price of your paid app to compete, and that’s what a lot of people do wrong. They take a great paying app which doesn’t have a great in-app purchase model or ad revenue model or anything in it and make it free to try and compete with their competitors. That’s a big, big mistake. You’ve got to have a paid app revenue strategy; you’ve got to have a free app revenue strategy. And bear in mind your free app will always have ten times the amount of downloads than your paid app.

So this is Ben Bressington, How to Make Millions with Apps, and I’m giving you a whole heap of tips and tricks about how you can make more money from your apps. There’s a whole heap of great content on this website. Leave your comments and feedback below. Make sure you check out a copy of my book and all the other resources we’ve got because we want to hear how you’re succeeding and why you’re succeeding. Here we’re creating a community of app publishers who want to make money, are making money, and really want to chase the big achievement of getting into the Top 25 charts of the app world, and really make great money from apps because it is possible. I almost dropped my iPad – that would’ve been nasty. Anyway, see you in the next video.

Discover the secrets of how you can make apps for free. It is possible. But I share more than that. I share the secrets of how you can create, market, and publish apps even on a low budget with no coding, programming, or design experience. It is possible. Trust me, I went from zero to 150 apps in under twelve months. I make my entire living from my app portfolios and I’ve shared the secrets of how you too can make apps in my book How to Make Millions with Apps. And when you order today, you’ll get over $128 of free bonuses along with access to a VIP members-only community which has amazing resources.
So if you’re looking to be successful in the apps business and create Top 25 games or utilities, create apps on a low budget, this book is for you. How to Make Millions with Apps is going to fast track your app success. This is Benjamin Bressington, the author of How to Make Millions with Apps, wishing you happy success in your  journey pricing your app for success.

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