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Guide

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The Five Stages of Reducing Mobile Customer Churn

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2020 Mobile App Engagement Benchmark Report

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6 Mobile App Monetization Strategies

Marissa Bosché  //  September 20, 2016  //  5 min read

If you have a mobile app, chances are you’ve spent a great deal of time trying to understand how to drive revenue. Your customers are flocking to mobile, but the money isn’t following— yet. The easiest way for teams’ to justify the budget required for mobile app development and maintenance is to tie it to revenue, but that’s easier said than done. What are you supposed to do when customers go mobile, but revenue does not? If mobile is where customers are interacting with your brand the most, it is unwise to actively choose to avoid investing in the mobile channel because the executive team doesn’t see the ROI in dollars.

To help our community understand what monetization strategies work best, we recently released a study about how mobile professionals tackle revenue. In this post, we share the results of our survey, and six mobile app monetization strategies to consider if you’re still tweaking your mobile app revenue strategy.

Let’s dive in!

Cracking the mobile monetization code

When you’re struggling to monetize your app, it can be frustrating to realize your app has power-users that would be easy to capitalize on if they visited other channels as frequently. So, what are you to do?

We asked respondents what channel drives the most revenue for their companies. This is what we found:

Which channel drives the most revenue for your company?

Mobile apps as a channel drive almost as much revenue for the companies surveyed as websites, and nearly as much revenue as in-store. This is surprising considering so many companies are still trying to understand how to drive more revenue through their mobile apps. On the other hand, the contrast between mobile apps and mobile web is stark; it demonstrates the opportunity mobile apps present to give customers a more personalized experience as compared to the web.

While there are many strategies to drive in-app revenue, we identified three main ways: in-app purchases, subscriptions, and ads. Of those, here are the most popular strategies survey respondents chose:

What's the biggest driver of in-app revenue?

Sometimes selling directly through a mobile app doesn’t make sense, but that doesn’t mean a mobile app doesn’t present opportunities to connect with and give customers more value. Respondents who chose “other” said licensing and driving retention for their other core products by keeping customers engaged via their mobile app were the main drivers of revenue for their apps.

In-app purchases, subscriptions, and ads aren’t the only way to generate revenue from an app. Depending on what works best for your customers, company, and brand, there’s several different strategies that may be worth exploring.

If you are still trying to figure out how to monetize your app in a way that doesn’t disrupt your customers’ experience, consider one, or a combination of, these six strategies:

1. In-app purchases:

This strategy essentially makes your app another sales channel. However, just because you’re offering consumers a different purchasing path doesn’t mean they’re going to take it. The existence of the path itself isn’t enough to push customers over the finish line; the entire experience needs to be seamless, more convenient, and more enjoyable than other channels in order to drive sales.

In-app purchasing options can range from selling goods and services, to installing paywalls that unlock new content or features within the app. Experiment with different offerings to see what your mobile customers respond to best.

mobile app revenue

2. Subscriptions:

Depending on the type of app, subscriptions are a great way to build up a consistent and reliable revenue stream. The key to success with a subscription model is to keep content fresh. Customers won’t see the value in paying to subscribe to your app if content isn’t updated frequently enough. Shortening your app’s update cycle can provide more value to customers, entice them to visit your app more frequently, and encourage them to spend more time in your app.

3. Ads:

If in-app purchases and/or subscriptions aren’t a viable monetization option, ads are a smart alternative. The most important thing to keep in mind when implementing ads is to make sure your customers’ experience isn’t disrupted. Ads can prove to be a successful option if you collect data about your customers because you have the opportunity to show them highly-targeted ads. Showing your customers irrelevant ads risks creating an impersonal experience, which will turn customers off.

For continued learning, check out these four tips on how to create high-converting mobile app ads.

4. Sponsorships:

If you haven’t found success with ads, or are looking for a new strategy to experiment with, consider partnering with advertisers to “sponsor” your app. With this model, advertisers give your customers relevant rewards when they complete designated actions within your app. Revenue earned through redeemed rewards is then shared between you and the advertiser. This model takes ad personalization to the next level, which can lead to an increase in customer engagement and revenue by providing your customers with real value.

increasing mobile app revenue

5. White-labeling:

If you didn’t already go the white-label route when creating your app, this revenue model is worth looking into. Building great apps is time consuming and expensive, so people have begun to white-label and package the structure of their app to sell to other businesses. Once a company buys the code to your app, they can insert the appropriate branding and ship it off to their customers. You did the hard work building the app; why not reap the (monetary) rewards?

6. Data monetization:

Keeping privacy laws in mind, there are legal—and lucrative—avenues for selling the customer data you collect. Even if you don’t sell your data directly, it can still be used to influence non-mobile business decisions, and create hyper-targeted marketing campaigns for existing customers.

Every mobile app is unique, with unique needs and customer journeys; which means mobile app revenue models are not one-size-fits-all. To figure out what works best for you, it’s important to consider what is least disruptive to your customers’ in-app experience first and foremost. Whether you have your mobile app monetization strategy all ironed out or are still in the process of solidifying a strategy, keep these six revenue models in mind as your app and business needs evolve.

Want to learn more about how to monetize your app? Download our Guidebook to Mobile Product Management Success for more data, actionable advice, and resources.

Questions? Comments? We’d love to hear your thoughts in the comment section below!

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About Marissa Bosché

Marissa Bosché is the Marketing Communications Manager at Apptentive. She studies consumer behavior in an increasingly mobile world, and loves helping businesses connect with their customers on a personal level. Follow Marissa on Twitter at @MarissaBosche.
View all posts by Marissa Bosché >

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