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Right Pricing Strategy for Mobile Apps: Key Considerations and Things to Know

Right Pricing Strategy for Mobile Apps: Key Considerations and Things to Know

In an increasingly competitive digital universe deciding about the right product price can be highly challenging and can really involve an array of considerations. Without having an idea about the right pricing techniques or the key pricing considerations, you can always set prices too high or too low affecting your marketing output to a great extent.

For mobile apps particularly, pricing can make a lot of difference to your marketing outcome. Based on your monetization model and on several other factors you need to set prices that garner quick response and steady business conversion without making you lose revenue-earning scopes.

Considering the challenges and the key stumbling blocks to the right pricing strategy, here we are going to explain some of the most effective pricing techniques and key considerations that any mobile app development company will find useful.

What is Pricing Strategy?

A pricing strategy refers to a methodology to determine the ideal or appropriate price of a product that at the same time avoids the two extremes of overpricing and underpricing. Pricing strategy is crucial to ensure consistent business conversion, sales, and marketing output.

A pricing strategy needs to take into consideration several factors related to the business niche, target audience, marketing goal, and brand value. The pricing also depends on an array of external determinants such as competitor pricing, market, and economic trends and customer demands.

Many enterprises without just going very deep into the multitude of considerations and factors just take into account the competitor pricing, the costing of the product and accordingly just tweaks the price a few dollars more or less. While these considerations can be taken as important, the competitor pricing alone should not determine your pricing strategy.

Price Elasticity of Demand

In this respect, you must know about the price elasticity of demand which is basically how the change in price affects the demand for a product. In case, in spite of the increase in price the product continues to experience the same demand, the product or the category should be considered as inelastic or not prone to the elasticity of demand because of pricing. Cigarettes and fuel belong to this category. On the other hand, consumer durable brands are highly prone to the elasticity of demand because of pricing.

When it comes to mobile apps, certain apps are more prone to the elasticity of demand while a few extremely popular ones are less vulnerable to the decreased demand because of pricing.

Common Pricing Strategies

Over the years, some pricing strategies have been used by the business brands of all niches for their products and services. For mobile app marketing also many of these pricing strategies can be highly effective. Let us have a look at the key riding strategies that app marketers should know about.

  • Dynamic Pricing
  • Freemium Pricing
  • High-Low Pricing
  • Project-Based Pricing
  • Value-Based Pricing
  • Competition-Based Pricing
  • Hourly Pricing
  • Skimming Pricing
  • Penetration Pricing
  • Premium Pricing
  • Cost-Plus Pricing

Mobile App Pricing Strategy

Pricing strategy as we defined earlier takes care of the pricing of a product to increase its saleability and revenue earning through it. So, in the context of the app, accurate pricing is important to ensure optimum business conversion and revenue generation.

Over the years, for mobile apps, some pricing strategies really stood out as effective and efficient. Here we are going to explain all these pricing strategies one by one.

  • Free

Across both the App Store and Play Store, you can find a multitude of free apps. These free apps that don’t take a penny from the users actually earn their revenue through in-app ads or in-app purchases. Free apps are also used by businesses to boost customer retention, customer engagement, and better brand promotion. Free apps for many business brands also serve as a channel for providing customer service.

  • Freemium

Freemium is an innovative pricing model that combines both the free and premium pricing of the app. These apps are basically offered as free to download with only a limited range of features and functions. The users of these free apps can further opt for extensive or advanced features and functions by agreeing to pay a price or simply by opting for the premium version of the same app rich with additional features and functions.

  • Paid

As we can guess from the name, for downloading these apps with this pricing strategy the users need to pay a one-time price and thereafter they can use the app. This pricing strategy has lost popularity over the years with the fact that most users across the platform prefer downloading free apps and don’t want to pay a price without really knowing about the user experience of the app first. Only a handful of very reputed and widely acclaimed mobile apps from big brands over the years could be successful with this pricing strategy.

  • Paidmium

This pricing model takes the paid model even further by asking users to pay even more for value additions or more features. Just like the Paid model you need to pay a price to download these apps and then for additional features you can be asked to pay more. Again, like the paid pricing model this has also been largely unsuccessful except a handful of apps from big brands. This model mainly worked with entertainment, music and chat and messaging apps.

The Key Questions You Need to Ask for the Right Pricing Model

business people

Now, that the most effective and widely used mobile app pricing models are explained, we will guide you with some questions and answers that are important for deciding the right app pricing.

  • Who is Your Target Audience?

Knowing the target audience of your app is not only important for building the app, but also for determining the right price if the app. Is the app targeted towards high net worth individuals who don’t pay hefty for anything that they find useful? Or, is the app targeted for students who always run short of money but get addicted to anything interesting easily? These considerations are important for your pricing strategy.

  • What Pricing your Competition us Adopting?

When it comes to pricing, you cannot come with something completely unique and never-before. So, it is good to take a cue from what others are doing in your category. For example, you cannot go for paid pricing when all others in the category and with similar apps are offering apps for free.

  • Google Play Store vs Apple App Store?

The experience of apps built by iPhone app development service or Android developers reveals that Apple users are more open and positive to pay for apps compared to Android users. Becoming successful with a paid app on the Play Store can really be challenging. Keep these differences in mind when deciding about pricing strategy.


While there is no “one size fits all” type of answer for the pricing strategy of all apps, you should always put yourself in the user’s shoes and understand the rationale behind pricing from their perspective.

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Written by Atman Rathod

Atman Rathod is the Founding Director at CMARIX InfoTech, a leading web and mobile app development company with 17+ years of experience. Having travelled to 38+ countries globally and provided more than $40m USD of software services, he is actively working with Startups, SMEs and Corporations utilizing technology to provide business transformation.

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