Is a mobile app more successful if it maximizes its user base or aims for a smaller, more dedicated fan base? As a developer, will you see a greater ROI charging upfront for your app, knowing that this will limit the number of potential app users? Or should you make your app free and offer in-app purchases, knowing that many users will never purchase any items in your app? Or is it best to offer an app for free and then begin charging later to gain greater exposure, or will this deter potential customers who may be reluctant to pay for an app that was once free?
In short, what makes an app a success?
The answer to that question, unfortunately, is not easy. There are a range of factors to take into consideration on building and selling a mobile app. Here's where to start:
Step 1: Branded apps vs. original content
Peter Farago, vice president of marketing at mobile analytics firm Flurry, recommended that developers first ascertain what type of app they are creating. Is this an independent project for a new app--a game, tool or other service--or part of a larger brand? An app representing Toyota or Kraft Foods realistically will have a different goal from a navigation app or puzzle game. Users are less likely to pay for a branded app, the goal of which is advertising and building the brand's image. Also of note: consulting firm Deloitte found that eighty percent of branded apps failed to reach even 1,000 total downloads.
Step 2: Chose the right mobile operating system
Apple's (NASDAQ:AAPL) App Store has the greatest number of Apps. Google's (NASDAQ:GOOG) Android has the largest market share of the smartphone market. BlackBerry World and the Windows Marketplace for Mobile have a smaller selection of apps, meaning a greater chance for visibility.
"Today I would say [to] go to Android first--it has the highest unified growth--then look into the QNX operating system, not BlackBerry 7, ... then I would look to Windows. That's where the horse race is going to be in the next four months," said MGI managing partner and mobile analyst Bob Egan.
Farago disagrees on Android. "They need to be able to make money from that market, and right now Google Checkout isn't as penetrative as it needs to be." Google Checkout is the payment mechanism for the Android Market.
He added: "I have heard anecdotally that people on Android make one-fifth the revenue of what they make on [Apple's] iOS. There are a lot of differences. The curation isn't there [on Android]--there's a lot more spamming and copying."
Step 3: Paid app with updates vs. free app with in-app purchases
A developer should follow one of two routes: offer a paid app that provides periodic updates with new content like Pocket God, or a freemium app with in-app items for purchase like Original Gangstaz. A paid app is likely to keep users active longer as users are investing upfront, though this limits the number of app users. Happy customers are likely to purchase subsequent apps from the same team of developers. The free option increases the number of overall users, as people are more likely to download a free app on a whim than a paid one. The drawback is that the shelf life of a free app is often much shorter.
A free app still needs to be updated with new levels, characters or other content to keep the user interested and to maintain a high ranking in the top apps portion of any app store. Of course, in order to maintain a high ranking, one must first get there.
Venture capitalist Fred Wilson explains the opportunity with the 30/10/10 split:
- "30 percent of the registered users or number of downloads (if its a mobile app) will use the service each month.
- 10 percent of the registered users or number of downloads (if its a mobile app) will use the service each day.
- the max number of concurrent users of a real-time service will be 10 percent of the number of daily users."
Step 4: Maximize your user base by choosing the right model
Egan has some advice for enticing new users to purchase apps. He suggested a model popularized in the desktop world: the free trial. By limiting the amount of time a new user can use the full version of the app, the user can experience all aspects of the app, realize its usefulness and must, at the end of the trial, pay to continue using it.
"Some [developers] will offer a 100 percent free model with one-third of the features. Conversion is a lot higher for a full version for a limited period of time. It's an all-or-nothing proposition," said Egan.
Farago agrees that many users are reluctant to pay for an app before having an opportunity to test it out.
"Only a few companies like Electronic Arts and some other companies that are really known brands can charge for it. They can ask the consumer, 'Hey, you know what this is, why don't you pay for it before I give it to you?'" said Farago.
In this sense, Electronic Arts, like brand-oriented apps, has an advantage. Users who may be familiar with its offerings outside of mobile know what to expect when purchasing a mobile version of Risk or Scrabble.
A developer who has been selling apps successfully should continue selling apps and incorporate some of these ideas into future apps. But if that developer is getting good feedback but is not selling as many apps as projected, it may be time to move to a free model to build a user base before charging for apps outright.
Step 5: Stick to the essentials
Building an app may not be an easy task, but the user shouldn't know that. Users want simple apps that are easily accessible on-the-go. The mobile app user market is different from the market for desktop apps and console games.
Rachel Youens, from app development firm Mutual Mobile, wrote a whitepaper called the "7 Habits of Highly Effective Apps" and emphasized, in an interview with Fierce, the important of identifying issues before they arise.
"It is important that by the time you are ready to roll out, you have been integrating things like Q&A from day one," she advised. "Find out where problems might be and where issues might arise," she added.
"There is a lot of engineering that goes on in the background of Angry Birds that is hidden and makes everything appear very simple," said Egan. "One of the things that you need to do to make it work well is to hide the engineering complexity. Consumers--especially if you go from a very large screen on a desktop to a small screen on a smartphone--have a very low tolerance for complexities."
A frustrated user is less likely to reuse an app and it is becoming more and more important to measure the number of users who reuse an app.
Step 6: Use Social Media wisely
Youens also emphasized the importance of not having an app load too many features at once. While social integration is an important part of spreading the word about an app, it is not necessary to have every type of social media integration available the first day an app is available.
Successive updates with new social media capabilities can bolster the number of downloads for an app. Facebook and Twitter integration make sharing app information easy and fun for the user.