Business plan model always matters in mobile app development!


Why do you build a mobile app? Of course you would say, you want to build a strong brand image, gain loyalty, procure new customers, and more. However, at the same time, you would also expect your app to be a strong source of revenue. Isn’t it?

Many people have ventured into the arena of mobile app development because they have been fascinated with the billion-dollar success of apps like Instagram, WhatsApp, and more. Today’s mobile apps are a big deal; however, that does not mean it will be successful for you too. You need to have a sustainable mobile business plan model, which is no one-hit magic.

Here’s one statistic for you: Only 2% of mobile app developers have claim on about 54% of total app revenues. Isn’t that staggering when compared to millions of apps that are built today? So many applications fail because developers do not focus on having an evolving and targeted business plan model that can rake significant revenues.

When you build an app, do you ever question yourself – are your customers willing to pay for it? Building a mobile app is not difficult, but to make it something that solves the problems of your customers so that they are willing to pay is complex. Therefore, having a viable business plan model for mobile app development is crucial.

Choose the Right Business Plan Model

Understanding how the mobile application fits into a business plan model is what makes you an entrepreneur from an app developer, believes Van der Pijl from Business Models Inc, a business planning and training company in Amsterdam. The key to successful app development lies in its ideas, features & functionalities and its business plan model. It is, in fact, difficult to achieve success if you do not choose the right business plan model. It is also crucial to understand that models evolve with time. So, you may begin with a free model, but be prepared to have a premium one and even move to advertising.

As we discuss the business plan models later in this blog, determine which is most suitable for your app. Answer the following questions –

  1. What is the ‘problem’ that you want your app to solve? How?
  2. Why would people pay for your mobile application? What is unique about it?
  3. What business plan models do your competitors use and how successful they are?

It is also important to determine what is most important to you – gain users or to earn revenue. There are business plan models that can fetch you instant money at the cost of getting you hundreds of users; on the other hand, there are some that boosts app downloads first and revenues later.

Top Business Plan Models for Mobile App Development

Discussed here are the top mobile app business plan models that you can bank upon:

1. Free App but with Ads

This is also known as in-app advertising, and is very common in many apps today. In this business plan model, you provide the option of free downloads, but at the same time, you continue earning revenues via in-app advertisements. Your objective is to increase app downloads and then collect user information, which is then sorted and sold to app publishers who pay for placing targeted ads in the app. However, a disadvantage is that users can easily get irritated with the ads and stop using your app.

2. Premium

This widely used business plan model involves charging $0.99 or more to download an app or game. It was one of the most common models prevalent early in the app store, and is used by some of the top names such as Cut the Rope, Angry Birds, and Doodle Jump.

3. Freemium

This is another popular business plan model that mobile apps are using today. It is a good way of increasing user base as well as earning revenues. As the name suggests, Freemium is a mix of Free and Premium, where the app is offered for free, but some features are gated and one has to pay a certain amount of money to unlock the features. To put it simple, users will have access to the app’s basic functionalities, but the premium features are chargeable.

The objective of this model is to attract users to download your app and give them a preview of its features and functionalities, without giving them the option to do everything. This way you can engage your users and encourage them to pay for additional in-app features. This app monetization model serves as a ‘teaser’ where you offer only a free version of your application unless they are inspired enough to buy additional features happily. So, you get the best of both worlds – user base and revenues.

4. In-App Purchases

This monetization model involves selling virtual or physical goods within the app, and then keeping the profits. This can include a wide range of consumer goods like clothes and accessories or virtual goods like in-game currency, extra lives, etc. This goes well will games and social apps. However, make sure that in-app purchase feels like a natural part of the application.

5. Subscriptions

Subscription-based app models are ideal for big-screen mobile phones and tablets. There are certain apps that offer books, movies, music, magazines, newspapers, and more to its subscribed members. By paying a certain amount of money per month or year, subscribed users can consume the services they like.

In other scenarios, the model gates content instead of features as in Freemium. It allows users to view a certain amount of content for free, and then prompts them to sign up paid subscriptions to view more of the content. This is the best option for apps that are serviced based, and allows businesses to generate revenues on a continuous basis. Since subscriptions auto-renew, the business plan model tends to drive revenues on a weekly, monthly or yearly basis.

6. Sponsorships

It is a new entrant in the world of app business plan models, and involves partnering with certain advertisers who offer your users with lucrative rewards or incentives to complete certain in-app actions. You earn revenues by taking a share of the money earned from redeemed rewards.

So, every app is an opportunity that needs to be tapped on for better revenue. And, the business strategy needs to be decided beforehand, as it matters a lot in the design you adopt for developing your app. Also, the app developing company should have a good experience of developing applications based on similar models and well versed with the art of mobile app development.

Author Bio: Ashish Parmar is the CEO of Prismetric Technologies, a premier mobile app development company and a web solutions provider embedding the latest trends and technology. Ensuring that every requirement from the client’s end is handled to utmost precision and managing successful campaigns with a unique strategy based on the needs, Prismetric has risen to be one of the leaders in app development and marketing.

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