How to Competitively Price Your App

Research is key in determining the sweet spot for your app’s pricing. You want a price that will not deter people from checking it out but one that is high enough to reflect the product’s value and maximize revenue.

Consider these questions when setting a price:

  • Are you developing a small-scale app where volume is going to be your key to success?
  • Alternatively, are you creating a large-scale app that focuses on a particular business sector or industry? If this is the case, your app may command a premium price based on the business efficiencies gained.
  • Is your app meant to be a revenue generator, or is it intended to build visibility and brand awareness with your customers?
  • What is the size of your potential market?
  • Is there a lot of competition in this space?
  • What are your competitors charging?
  • How do the distribution channels for your app influence the price you will set?

A thorough competitive analysis should be done to determine realistic sales volumes at certain price points. The more you understand about market demand and how much your audience will be willing to pay, the better off you will be. Keep in mind it is much easier to offer promotions or drop prices than it is to raise them post-launch.

Instead of focusing on the price of the app as the sole revenue generator, you may decide to supplement revenue with in-app purchases or advertisements. In some cases, the revenue gained from sales of the app itself may be secondary to the revenue generated by in-app or after-purchase sales. It is important to understand these options and how they will impact your marketing strategy.

The Internet news blog, Mashable, provides a helpful run down of these pricing strategies in their article “How To: Determine The Right Price For Your Mobile App”.



This post is an excerpt from our book, Inspiring Apps: A Business Perspective on Building Mobile Apps. Want to learn more? Download your free copy from the iBookstore and gain a valuable business perspective on building mobile apps.

Don’t have an iPad? You can download the PDF for an equally informative yet slightly less interactive experience.



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