The Best Income Model For Your App

Azmi Rutkay Biyik
Mobile Growth Istanbul
6 min readApr 10, 2020

You finished your app, published it, announced on some social mediums and started to watch your metrics đź‘Ź đź‘Ź

The Secret Potential of Your App

What kind of income model do you apply?

(www.mythemeshop.com)

Free Model

The app is totally free and there are no purchasable goods in your app. The only income model is showing ads to users.

Even showing ads has different ways to do properly. Basically putting a banner and random full-screen ads may not work as expected. You should not disturb your users with overwhelmed ads and also you should not break your app’s user experience and UI flow cut by ads.

Virtual currencies are lifesavers here. Earning extra life in a quick game or shortening some progress by using virtual currencies -App Coins, Game Points,..- and earning them by watching rewarded ads may be a good choice.

iSee — Palmistry App

You can improve these earnings by giving randomized items instead of concrete gifts such as 100 coins. You can put a lottery and tell winning chances of different awards. This “surprize” factor puts your users into the flow while doing a boring job such as watching an ad. Also, you can calculate the chances and direct your user to watch more ads.

Premium

You can basically sell your app’s fully functional version. There is a huge downfall of this model: Your users will be a burden for your servers and static costs. When you give your users limitless possibilities such as uploading images, talking with your servers to put and retrieve information etc, long term premium users may be a huge burden.

To overcome this problem, you can sell your app as fully functional besides consumable actions that can still be bought or earnt by watching ads or directly. They may be customization items such as avatars, dresses, tags or basically visibility to other users on a social platform of your app. You can mix income models to maximize your income.

Freemium
There are different types of freemium models. Let’s say that you created an Instagram profile tracker app which is basically used for tracking the chosen profile’s activities.

  • Limited access: You cannot choose any profiles to track. There are accessible profiles to track to understand how does app works.
  • Limited usage time: You can track anyone but for only 1st day.
  • Limited functionality: You can track anyone forever but you cannot get notifications about critical activities.
  • Limited numbers: You can track only 1 person forever with full functionality.
    …..

There are more freemium models than those. The trick is choosing one or some of them wisely.

Then, how to decide which model generates better outcomes?

Event Funnels

You can collect custom events or user actions. Facebook Analytics and also Firebase has this kind of functionality given.

There are predefined events:

Google Analytics Console that Connected with Firebase

Also, you can create your custom events with custom inner parameters/variables collected from user:

Firebase Analytics Console

Then, what can we do with all of those events and parameters: Creating activity funnels

One of the most known sales/growth funnel model is Pirate Funnel

This funnel shows us when we increase any step from the top, below steps of it, affected in positive correlation. For example, if we have 10K new users in a week and 100 of them buy something, then when we acquired 20K new users there are more than 100 users who buy something with basic math. Of course, there is more math than this but the very basics of any funnel look like that.

Then, you can create your own event funnels with your custom events. For example, you can measure the number of users who stuck on a limitation and then go to the shop to buy something such as my funnel below:

Available free item count = 1

The translation of this funnel:

  • User launches the app
  • User faces the limitation
  • User goes to the shop or dismisses the dialog
  • User purchases the item he/she stuck on

I used the “limited numbers” model for that item here. And, I gave only 1 free item and if the user needs more he/she has to buy limitless access purchase for that item.

Say that, you gave people limited access to all the features. But, what if that limited access is more than enough for most of your users?

In my case, when I gave more freebies, I got more 5-stars in the application market. Vice versa provides me more income but more 1-star reviews. I don’t know if it is a short term profit or not, I may go down on the store because of bad reviews. Just testing after collecting enough reviews to not get affected by bad ones in the short term.

When I don’t give that item to users and directly prompt a dialog which says stuck on the limit, I got a different event funnel with the same events:

Available free item count = 0

The summary

  • User launches the app — No change
  • User faces the limitation — Up: 1.81% to %7.18 for overall
  • User goes to the shop — Up: 0.92% to 6.32% for overall
  • User purchases the item he/she stuck on — Up: 0.04% to 0.45% for overall

I continue to this experiment if the numbers are permanent and good for the long term or not because of the angry users who give 1-star reviews (there are already some of them)

Conclusion

There is always more potential than the current state of your app. You should always watch your metrics and test your income models and prices for each purchased item.

You can also use some engagement techniques such as gamification to create loyalty and trust to increase your app metrics such as time spent, retention, etc.

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Azmi Rutkay Biyik
Mobile Growth Istanbul

Blogger, Software Engineer, Growth & Gamification Enthusiast