Love them or hate them, In-App Purchases (IAPs) have the potential to transform your bottom line. Our CEO, Stuart Hall, saw a threefold increase in revenue as a result of offering IAPs for 7 Minute Workout and there’s been increasing adoption of this pricing model for apps in recent years.
Chart from “How I Got 2.3 million downloads (without spending a cent on marketing)” by Stuart Hall
Sounds like all upside, right? Not exactly. Introducing IAPs to your product has the potential to put users off your app completely, lead them to leave a cranky 1-star review, or simply stop telling their friends about it. There are lots of ways to offer upgrades without irritating your users though, so we decided to compile our top tips for maximizing your app revenue AND keeping your users happy:
Only a small portion of your users will ever upgrade. Typical conversion rates are 2.5-5% of your user base, so you need to ensure you’re constantly getting new downloads into your sales funnel. If the free version is awesome, just less awesome than the upgraded version, you’ll maximise the chance that free users will drive word-of-mouth downloads and social shares, keeping your funnel nice and full. You’ll also get better reviews and keep your star rating nice and healthy, like this:
Or this 🙂
Aggregate feature requests received via app reviews, on social media, or through your support channel (or use Appbot to automate it) and figure out if some might make cash-worthy IAPs. Not only will you likely increase your revenue, but users will be happy you listened and built what they asked for.
Ditto competitors. Maybe you have an opportunity to grab some market share AND make some money at the same time by solving a pain point for competitors’ customers.
If you’re using an analytics package this next part is easy. Work out what your most valued feature is, then think about whether you could make it into an IAP. Look for themes like the one you can see in this sample of reviews…
Be careful not to prevent users from completing a core task, and also stay aware of #5 on the Don’t list below…
Suggesting an upgrade when a user feels productive and positive is the way to go – your chances of conversion will be far greater! It goes without saying that your suggestion should only be made when the user has completed the workflow/task/process/thing they’re engaged with.
There’s a temptation to just pepper your app with conversion funnels and upgrade prompts, but be mindful that not everyone will find your app valuable enough to even consider it. In fact, interrupting users who aren’t very engaged may cause them to abandon your product completely. Work out which users are likely to get value from upgrading, and serve prompts to those users only.
Got a few IAP ideas now? You might want to think about offering all the possible upgrade features as a single package or bundle. Worked like a charm for “All The Things” in 7 Minute Workout (more about that here – thanks to Stu for the images)….
Pricing is a tricky beast… The good news is that users often give you feedback in reviews and other channels to help you work out how to improve your pricing model. On the plus side, changing your price doesn’t require you to ship a new version.
If you’re looking to learn a bit more about developing a solid pricing strategy we recommend this awesome post we found earlier in the week by Thierry Meier about pricing IAPs (and getting a 30% increase in revenue) in the Lonely Planet app.
Do your users need a Pile of Gems to advance faster? Games really lend themselves to commoditization, so if your app is a game think outside the box on this one.
Annoyed users are very unlikely to buy. This point feels like common sense, but there are still many, many apps that interrupt users who are in the middle of doing something valuable. If your app involves a series of very quick tasks (or very brief levels in the context of games) work out what your average session duration is, and consider it when you drop in IAP prompts and conversion funnels. If users typically perform 10 tasks, or complete multiple levels in your game, you probably don’t want to make them feel like this:
This is especially important if your app is a paid download. Give users a chance to at least enjoy your app and experience (hopefully) solving the problem they hoped it would solve before you ask more of them. Let them see some value from what they’ve just downloaded before asking for bigger commitment. Ask too soon and you risk losing them completely, plus negative feedback.
By all means offer low engagement users upgrade prompts when it makes sense, but be careful not to overdo it – you’ll just damage their perception of your product as a whole. No-one wants their users to feel like this…
Or this, for that matter…
Who’s to say they’ve nailed it? If an upgrade prompt in a competing app seems annoying or obstructive to you it will feel the same to your users. Avoid!
If you have a large user base and a paid app, think hard about taking features away and asking users to pay for an IAP in order to access them. Where possible, grandfather old users. Think about new things they might pay for instead.
Ultimately, we hope these tips help you get some reviews like this one,
not to mention a nice bump to your revenue. If you’ve got any other awesome “rules of thumb” that are missing from this post we’d love to hear them. Email me at email@example.com or tweet us @stuartkhall/@clairesayshi/@AppbotX.