Free vs. Paid Apps – Choosing the Right Price

If you had a lemonade stand, this would be easier. You would know you’re selling your lemonade – just set a price and open shop.

But with mobile apps, you have some choices to make. Decide if your app will be free, paid, or if you’ll have both a free “lite” version and a paid option. Letting people upgrade can be the best of both worlds, but it means you’ll need to carefully think about what features to give away free and which you’ll save for paying customers.

There is much to consider when choosing a price and strategy for your app. In this podcast, you’ll find out how to choose the right model and profit in the App Store. Check it out now to find out more.

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Podcast Transcript

First, the most important thing to know about pricing your app is that there are really only two prices: free and not free. The thinking that someone does before they download a free app is fundamentally different than what to do before they decide to buy your paid app.

Put another way, the difference between $1.99 and $.99 isn’t so big. But the difference between $.99 and free is huge – it really is like two different worlds.

Downloading a free app doesn’t take any thought on the part of the customer. They don’t have to wonder if the app is really worth it, if they have the money, if your app is better than the app that’s a little less. A free app is easy.

Buying a app that’s not free is a whole other story. Here’s why: people hate buyer’s remorse. Think of the last thing you bought – not an app – that turned out to be junk. How did you feel? Did it make you think twice about making your next purchase? Everyone has been sorely disappointed in something they’ve bought, and they’ll bring that worry to the App Store.

But just know that if you’re going to sell your app for cash – which is the quickest way to profit from apps – your app will need to have the right features and the right price to convince someone to get over their fear of buyer’s remorse.

 

Have Your Cake and Eat it Too

As we talked about before, there are really only two prices when it comes to apps (or any product, really): free and not free. But what if you could get the best of each strategy? What if you could get lots of people to download your app because it was free, and then you could get money from them later? You wouldn’t have to sell it as hard because they could try it before they bought it.

You can, and it’s something I recommend you think seriously about. It could be a great way to turn your free app into a money maker or to get more publicity and, in turn, bigger profits for your paid app.

There are two ways of using this “try it before you buy it” strategy. First, you could offer a lite version of your app and a full, paid version. Or, you could offer a free download and let people use in-app upgrade to get all the features.

The basic idea is the same: you get the best of both worlds. The free version draws people in. It’s a free sample. Then, once they’re hooked – once they love it, you offer

 

What Not to Do in Your Lite App

When making your lite app, you have a tightrope to walk. On one hand, you don’t want it to have all the features of the full app. (What would be the point of people upgrading?) On the other hand, you shouldn’t make your lite app feel incomplete.

There are two reasons why your lite app should be fully functional. First, Apple is not likely to allow restricted apps into their App Store. They frown upon apps that seem incomplete, have time limits to use, or have buttons that are grayed out. Also, don’t show the price of the full app in your lite version.

Another reason to make sure your lite app is complete is that you want to make a good impression on your customer. They went through the trouble of downloading your free app. You want to catch their interest and excite them to upgrade, not annoy them because the lite app is little more than an ad.

It’s not easy deciding what features will be in each version of your app. You want to think about what the casual user would want – someone who doesn’t know about your app or what it does – and put that in the free version as a hook. Then, you want to pick features that would compel someone to upgrade if they were a more serious, invested user.

 

Take Action

If you had a lemonade stand, this would be easier. You would know you’re selling your lemonade – just set a price and open shop.

But with apps, you have some choices to make. Decide if your app will be free, paid, or if you’ll have both a free “lite” version and a paid option. Letting people upgrade can be the best of both worlds, but it means you’ll need to carefully think about what features to give away free and which you’ll save for paying customers.

If you currently have a paid app you’re selling in the App Store and you’re looking to get more people to try it, consider making a lite version. It’s like free advertising in the App Store and you’re making it easier to people to try it before they buy it, which many of them are likely to do.

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