Apps are an important part of creating really good customer experiences and there are many different ways to create revenue with an app store. Some are more direct and some are the result of clever marketing strategies.
Let’s go through the 7 different strategies you can set up for your app store business model.
1. Subscription App Store Clubs
Let users pay weekly / monthly for access
Heard about the success of Netflix and Spotify? Customers seem to love models where they subscribe and then pay a recurrent fee for access to an extensive catalog of content. This model has transformed the software, movie and music industry and we can now see how it is being implemented for all type of services such as training courses, industry machine usage etc.
This model can also be used in app stores where the concept is that a user pay a weekly / monthly fee to either unlimited access or a partly limited access to apps.
Push other products with an excellent brand experience
A modern marketer focus on a very specific target group and marketers creates new products and services to create a brand experience that elevates. An amazing marketer build new products that generates new revenue and at the same time elevates the brand.
One of Appland’s customers, Caterpillar has successfully completed their value proposition with a targeted content offer, resulting in increased number of device sales and a really good customer experience.
Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. They have created a roughed phone for tough environments focused on construction workers and outdoor people. The Caterpillar phone has a branded App Store where users can discover apps that are specifically interesting to them.
The result - Amazing Brand Experience and Engagement
The customers love their phone and the app recommendations so much that every push message sent out engages more than 30 % of all users. Let’s think about the last time you had 30 % engagement on any of your send outs in any channel. An amazing marketer creates new revenue streams, elevates the brand and help to push the sales on all products and services within the brand. Congratulations Caterpillar for job well done!
3. CPI & FPS deals
Get paid for pushing app installations
App makers spend money on marketing their apps and if you have an audience you can help app makers to reach this audience.
CPI (Cost Per Install) means that you will get payed for every installation that is done from your app store. The payment varies and also the period the deal would be valid. In average you would be paid a few cents all the way up to a few dollars per install depending on region, the app and the app makers marketing budget.
FPS Featured Position Sales is when you promote an app in your app store and charge the app maker for it. Some app makers may feel that CPI is to expensive for them and instead they want to do a traditional ad for a certain time period.
4. Premium Purchases
Earn a cut on every sold app
White-label app stores with an activated billing system makes it possible for the app store owner to make a cut on every sold app. This is the same type of business model as used by Google and Apple in their app stores.
Appland’s research of all our customer’s app stores indicates that this is not a self sustainable monetization method for devices where Google Play co-exists with the 3rd party app store. It seems like users still prefer to buy apps and games in the phone's traditional app store. We only recommend this monetization method for App developers with high revenue apps, devices that don't have Google Play or device makers that have a lot of unique apps for their device.
Our recommendation is to instead review the App Subscription Club and the branding experience monetization methods.
5. In-app purchases
Earn a cut on every in app purchase
Just like Google and Apple you can make a cut of all in-app purchases. This monetization method is usually used in combination of premium purchases and the white-label app store must have billing enabled.
Just like the premium purchase monetization method our research indicated that it is difficult to make enough money to reach profitability.
6. Ad Networks
Set up ads and earn on every click
If you are able to build up a lot of users and activity in your app store you can set up adds and for every click earn revenue. Very few of our customers do this but for very focused app stores we believe this can be a good idea. Example, if you are a sport fan active in a sport focused app store and see good ads about sports activities the ads may work well.
7. Affiliate Programs
Recommend apps and send them to Apple Store
Apple offer an affiliate program where you will be paid for every user you help find an app in the Apple app store. This means you can set up an app store with a lot of users and activity where you simply let users discover apps in your store and when they click to learn more you send them to the Apple Store. For every purchase you will make some money. We believe this is a good monetization method if you have a specialized store with a lot of activity where you will be able to push for high revenue apps.
7 monetization methods and a lot of choices for how you can build up your app store business model. The question are what have actually worked so far? What Appland has seen is that customers that focus on App Subscription clubs, app discovery and brand experience are the most successful stores with a lot of users, activity and revenue. For any new customer we strongly recommend that these monetization methods are taken into consideration when building a successful business model.
Are you interested in creating your own app store?