mobile app development

How to choose your pricing model for an App

Mobile app pricing is a significant part of mobile app development that has a huge impact on the ranking of an app on the app store. If you wish for your app to get noticed on the app store, it is imperative that you embark upon the right pricing strategy.

In a recent survey, it was found out than almost 30% of the traffic comes through mobile devices and therefore, all means should be adopted to select the appropriate monetization strategy.

There are several types of pricing strategies that you can choose for your app, but before going into the detail of that, let’s understand clearly what actually pricing strategy is.

What is Pricing Strategy?

The Pricing strategy is a method of making money from your mobile app. This may seem simple, but as a matter of fact; a lot of professionals have spent their entire careers in apprehending this deep psychology of pricing. The launch of different app stores has brought tremendous change in app pricing models, and today there are 4 types of pricing strategies, namely Free, Freemium, Paid and Paidmium.


Free apps available on the app store are absolutely free to download. In such a case, the main source of income generation is through advertisements. Free apps are built by companies for the purpose of building a product or service extension of what they are offering. Such apps act as a competent tool for customer retention, establishing communication and other related things.


Freemium apps are free to download; however, they offer only limited features and functionality. A lot of you must have come across such apps, for instance, Picsart. It allows you to access different picture editing features and at the same time, some of its exclusive features such as stickers are chargeable. These apps come with in-app purchases, allowing the app developers to charge for some exclusive features. The customers can pay money within the app to open its features which eventually augments the value of the app.


Paid apps require the user to pay once in order to download and use it. The popularity of these apps has tremendously reduced owing to the increasing count of free and fermium apps that are available on the app store. Paid apps are one of the common pricing strategies, however; most of the reputed companies believe that this is an ineffective approach. Whatever said and done, purchasing the app still remains to be a powerful pricing strategy for a lot of apps.


Paidmium apps are a mixture of fermium and paid apps, as they require the user to pay for an app, but they have an option to unlock some extra features by paying more. Though this is not a very powerful pricing strategy, it can sometimes help to generate ongoing revenue. It may be suitable for navigation, music and social networking apps. But still, in every scenario, you might have to lay out  some robust reasons to the customers for purchasing your app.

How to Select the Pricing Model for your App?

While selecting the right pricing model for your app, just be well aware with the basic requirements of your company, customers and developers. Don’t try to force-fit any particular strategy, only because you think it is highly approached and popular. Here are some listed factors that should be born in mind while choosing any pricing strategy for your app.

    • It is important to decide whether you want your app to cater to a larger audience base or simply offer value to a smaller and more specific niche of customers. When you are able to analyze the purpose of your app, it is easy to embark upon a suitable marketing strategy.
    • Know the exact cost of building your mobile app in order to target required cost you desire to achieve for  making

  • Have an eye on the progress of your competitors and be updated about their doings. If there is any substitute for reducing the cost, proceed with it. The grail of every mobile app is to stay ahead of the competitors and earn profit.

Now, for a fact, free and fermium strategies work best when it comes to securing a large customer base. If you opt for a freemium model, concentrate on offering better features and functionality to all your customers. If the users feel that there is added storage, better backup or line items in freemium apps, they do not mind paying a little extra.

On the other hand, paid and paidmium apps works best when you have a smaller and specific niche of customers to cater to. Not a large number of customers prefer podium apps as they prefer paying a one time fee, rather than going for different tiers of service.

Best Product Pricing Strategies for your Mobile App

As discussed above, there are several factors that are to be kept in mind while selecting a feasible product pricing strategy for your app. Now, we have listed some points that will help you to understand the impact of having different prices on target customers:

  • Test the app at a variety of prices: An app is not just something that it is worth for, but also what potential customers are willing to pay for. The best thing to do is testing the app at varied prices and checking how customers actually respond to it.
  • Value Offered by the app should always be greater than its price: In this highly competitive scenario, the only way of attracting a larger customer base is by offering more value than the price of the product and thus, beat the competition. If the app offers superb functionality, the customers will be lured for paying extra.
  • Design what the customer wants: Pay attention to factors that seek to augment the value of your mobile app. The design of the app should be exceptional with striking functionality.
  • Users expect more from paid apps: Adding an initial cost may considerably reduce the number of customers downloading the app. Alssso, users expect a lot more exclusive features from paid apps. They do not feel like paying each time a new update is released.
  • Understand the market demand curve: If the app is unique and features an outstanding design, you should try to project its demand so as to incline maximal user inclination.Setting the price of an app on the basis of market demand will help you in understanding its value to the target customers.
  • Price should be reasonable for the customers: Your app should not only set a decent revenue stream, but shall also create loyalty among the customers. Therefore, the app price should be fair and affordable for the customers, since nobody appreciates the idea of downloading a highly priced app. At the same time, the price of an app should be sustainable for you company.


The price of the app cannot be rigid, with developers constantly experimenting with various prices to develop the best strategy. Try to launch your iPhone or android app with a reasonable price, as that is the time when you can entice a lot of customers into buying it.

So, take different measures to embark upon a successful pricing strategy as it is one of the most important steps of mobile app development.

Sumit Garg

Project Manager @ Octal Info Solution