Great app … but losing money. Can it be fixed?

Great app … but losing money.  Can it be fixed?

Your app (or your app idea) is great – maybe the best ever, but it’s losing money.  Can it be fixed?  We don’t know, but we bet there are some things of which you have not thought about.

There is more than one way to monetize an app.  Here are some things that have worked for others.

Sell it for more than you paid to have it developed and marketed.

That’s the most obvious and that’s where most people stop the analysis.  HOWEVER, if you developed a great idea and did not put a significant amount of time and effort (if not money) into letting potential customers know about the app and understand your value proposition, then, frankly, you don’t deserve to make money.  You’ve only done half the work.

Here are some of our thoughts on app marketing.  If you want to read more about app marketing that does not cost a fortune, email us at and we’ll send you a free article that just might change your great product into a great product that makes money.

Now, if the “Pay to Play” model is not right for you or you need some other ideas or revenue streams, check this out:

  • Freemiums

A combination of “free” and “premium”, the freemium revenue model is becoming increasingly popular—and lucrative—in the mobile app market.  As Ryan Kim of GigaOM recently noted, approximately one-third of the top-grossing iPhone apps use the freemium model.   For more thoughts about freemium marketing, see our post on how to make money giving apps away.

  • In-app purchases

A variation of the freemium model, in-app purchases are most commonly found in game applications, where the user downloads the app for free, then spends money on items and upgrades to help them succeed at the game.  Mashable recently reported that in September of 2010, such a strategy generated roughly $8 per app user (as opposed to $1 per user for ad revenue), and Ryan Kim noted that in-app purchases constitute roughly 34% of overall app revenue, which is expected to reach $6 billion in total sales by 2015.

  • Sponsorship

Gregory Kennedy of Sony Ericsson praises sponsorship as a “great model for specialty apps, and a good entry point for novice developers.”  The sales process is simple, and only involves finding one sponsor willing to attach their name to the app in question.  Unfortunately, this will be to the exclusion of all other sponsors, and the model itself is not scalable.  You’ll earn what you’re expecting to earn, but never more than you hope.

  • Advertising

According to a report recently released by Distimo, the top 300 free applications generate over three million downloads every day, compared to 350,000 paid applications.  The margin is remarkable, and given that the consumer base for mobile apps is only likely to expand, there’s every reason to expect that revenue models based on advertising will follow suit.  Indeed, Hillel Fuld of GigaOM recently predicted that the sale of advertising space will rise as high as $5.4 billion by 2015 in the U.S. alone, and concluded that “mobile advertising is the way to go.”

Need help formulating a marketing strategy for your great app idea?  We can help.  Send me an e-mail and we’ll get you on the path to monetizing your app idea.


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