Tag Archives: Sales

The Top In-App Purchase Tactics for 2022

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According to Sensor Tower, consumers spent $111 billion on in-app purchases, subscriptions, and premium apps in 2020 on the Apple App Store and Google Play Store. How can your app take advantage to maximize revenue? Every app is different and begets a unique answer to the all important question: What’s the best way to monetize?

App Figures recently published a study which showed only 5.9% of Apple App Store apps are paid, compared to a paltry 3.7% on Google Play. Thus, the freemium model reigns supreme—according to app sales statistics, 48.2% of all mobile app revenue derives from in-app purchases.

When creating an in-app purchase ecosystem, many psychological and practical considerations must be evaluated. Below, please find the best practices for setting in-app purchase prices in 2022.

BEHAVIORAL ECONOMICS

Behavioral economics is a method of economic analysis that applies psychological insights into human behavior to explain economic decision-making. Creating an in-app purchase ecosystem begins with understanding and introducing the psychological factors which incentivize users to make purchases. For example, the $0.99 pricing model banks on users perceiving items that cost $1.99 to be closer to a $1 price point than $2. Reducing whole dollar prices by one cent is a psychological tactic proven to be effective for both in-app purchases and beyond.

Another psychological pricing tactic is to remove the dollar sign or local currency symbol from the IAP storefront and employ a purchasable in-app currency required to purchase IAPs. By removing the association with real money, users see the value of each option on a lower stakes scale. Furthermore, in-app currencies can play a major role in your retention strategy.

ANCHORING

Anchoring is a cognitive bias where users privilege an initial piece of information when making purchasing decisions. Generally, this applies to prices—app developers create a first price point as an anchoring reference, then slash it to provide users with value. For example, an in-app purchase might be advertised at $4.99, then slashed to $1.99 (60% off) for a daily deal. When users see the value in relation to the initial price point, they become more incentivized to buy.

Anchoring also relates to the presentation of pricing. We have all seen bundles and subscriptions present their value in relation to higher pricing tiers. For example, an annual subscription that’s $20/year, but advertised as a $36 value in relation to a monthly subscription price of $2.99/month. In order for your users to understand the value of a purchase, you have to hammer the point home through UI design.

OPTIMIZE YOUR UI

UI is very important when it comes to presenting your in-app purchases. A well-designed monetization strategy can be made moot by insufficient UI design. Users should always be 1-2 taps away from the IAP storefront where they can make purchases. The prices and discounts of each pricing option should be clearly delineated on the storefront.

Furthermore, make sure you are putting your best foot forward with how you present your prices. Anchoring increases the appeal of in-app purchases, but in order for the user to understand the deal, you have to highlight the value in your UI design by advertising it front and center in your IAP UI.

OFFER A VARIETY OF CHOICES

There are a number of IAPs trending across apps. In order to target the widest variety of potential buyers, we recommend offering a variety of options. Here are a few commonly employed options:

  • BUNDLES: Offer your IAPs either à la carte or as a bundle for a discount. Users are always more inclined to make a bigger purchase when they understand they are receiving an increased value.
  • AD FREE: Offer an ad-free experience to your users. This is one of the more common tactics and die-hard users will often be willing to pay to get rid of the ad experience.
  • SPECIAL OFFERS: Limited-time offers with major discounts are far more likely to attract user attention. Special offers create a feeling of scarcity as well as instill the feeling of urgency. Consider employing holiday specials and sending personalized push notifications to promote them.
  • MYSTERY BOX: Many apps offer mystery boxes—bundles often offered for cheap that contain a random assortment of IAPs. Users may elect to take a chance and purchase in hopes of receiving a major reward.

While offering users a variety of choices for IAPs is key, having too many choices can cause analysis paralysis and be stultifying to users. Analysis paralysis is when users are hesitant to make an in-app purchase because they’ve been given too many options. Restrict your IAPs to the most appealing options to make decisions easy for your users.

TESTING IS KEY

As with any component of app development, testing is the key to understanding your audience and refining your techniques. We recommend testing your app with a random user group and taking their feedback as well as having them fill out a questionnaire. A/B Testing, or split-run testing, consists of testing two different user groups with two different app experiences. A/B testing enables app developers to see how users react to different experiences and to evaluate what tactics are most user-effective.

There are many tactics to help incentivize users to make that big step and invest capital in an app. Savvy developers innovate every day—stay tuned on the latest trends to keep your in-app purchase strategy on the cutting edge.

How Mobile Commerce Is Changing Retail Sales

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Smartphones have brought about unparalleled convenience in our daily lives. We are constantly connected to our rolodex of contacts with a variety of methods of communication. We can access all the information available on the world wide web anytime. Consumers looking to make purchases on the go can find the nearest store with ease. For businesses, the mobile platform represents not only a major avenue for advertising, but an opportunity to give customers the ultimate convenience when purchasing products.

According to Internet Retailer, mobile commerce represents 30% of all US e-commerce and rose by 38.7% from 2014 to 2015. Mobile commerce drives sales, and businesses lacking a mobile strategy are missing out on a major opportunity to increase revenue. Here are the top mobile commerce trends for 2016:

INTEGRATING PHYSICAL WITH DIGITAL

Although the digital world is virtually omnipresent in households, the appeal of immediately receiving one’s purchases by shopping in store remains attractive. Retailers are increasingly offering a variety of online + in-store options to capitalize on the convenience of digital and the immediacy of making a physical purchase.

Apps like Curbside have partnered with Target & Kroger’s to enable customers to reserve their purchases and skip the line when picking up products.

Beacon-enabled features like geo-targeted offers and loyalty rewards are becoming more and more popular. Geo-targeted offers can drive in-store traffic when delivered effectively. According to Target Marketing Magazine, 85 of the top 100 retailers are planning to adopt beacon technology by the end of 2016. Business Insider has predicted beacons will directly influence over $44 billion in US retail sales in 2016.

PERSONALIZED MOBILE PAYMENTS DRIVE LOYALTY

Although services such as Apple Pay and Android Pay were once hailed as the future, they have had a hard time receiving mass adoption. While mobile payment services haven’t gained popularity, the mobile wallet has made a major impact on commerce. Starbucks drives 16% of transactions through its mobile app. Walmart Pay arrived in December 2015, and now Target is next in line to develop their own payment app.

WEARABLES ON THE RISE

According to Arc, there will be a 61% growth in wearable ownership in 2016. App developers and retailers are still plotting on how to capitalize on wearables. Many anticipate a hands-free shopping experience in which one can simply walk out with their purchases and have automatic charges through wearable devices. Malls and large stores like Walmart may use wearables to make it easier for consumers to navigate stores. Wearables represent a major avenue for retailers to create innovative strategies and dictate trends to come.

THE MOBILE WEB DRIVES PURCHASES

While about 85% of time spent on mobile devices occurs in apps, the mobile web has actually proven to be a more successful in driving website traffic. While app usage is prevalent, consumers spend 80% of their app time on their top 3 apps. The mobile web drives twice the amount of site traffic than mobile apps. With 82% of smartphone users looking to their phones in stores when deciding what to buy, many anticipate the mobile web to surpass apps as the largest revenue driver in the next few years.

HOW CAN MOBILE COMMERCE HELP YOUR BUSINESS?

With technology in constant flux, the potential to drive revenue with a refined mobile strategy is constantly growing. Mobile strategies must be created, enacted and reevaluated with every new OS and device. Mobile is an ongoing investment. Understanding the value of a mobile strategy and how each device can enrich a customer’s interaction with your business will lead to long-term revenue growth.

Mind Over Matter: Why Apple Downsized with the iPhone SE

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On March 21st, Apple announced a smaller 9.7 inch iPad Pro model, a price drop for Apple Watch and new nylon bands, and most importantly, their latest smartphone: the iPhone SE. While the iPhone 6 and 6+ represented the largest phones in Apple history, Apple elected to go smaller with their latest release. The iPhone SE is the size of an iPhone 5 with the processor of an iPhone 6, essentially recycling the aesthetic design of the iPhone with the speed of an iPhone 6.

When it comes to smartphones, screen size matters. Statistics show over half of YouTube views come from mobile devices and the average YouTube session lasts for over 40 minutes. Although people are watching more video than ever on their phones, it doesn’t mean bigger is always better. Many scorned the iPhone 6+ for being too large and clunky. The iPhone SE represents a more affordable option with all the processing power of an iPhone 6 on a smaller screen.

iPhone SE vs. iPhone 6s (via 9 to 5 Mac)

When it comes to specs, the iPhone SE is no slouch. The iPhone SE screen measures at 4.87 x 2.31 x .30 inches, the exact same dimensions as the iPhone 5. Like the iPhone 6, the iPhone SE has retina display. The phone has an A8 chip with 64-bit architecture and an M8 motion coprocessor, like the iPhone 6. While the iPhone 6 has 1334 x 750 pixels (326 PPI), iPhone SE has slightly fewer with 1136 x 640 pixels. The SE’s rear camera is identical to the iPhone 6. The one area in which the SE exceeds the iPhone 6 is in battery life: iPhone SE has 1642 mAh while iPhone 6S has 1715. The SE’s smaller, lower-resolution display ensures users will receive 20% longer 3G internet surfing time on the SE, 30% more 4G, and 20% longer when watching video.

Check out this awesome video review of the iPhone SE by The Verge:

Apple is expected to announce the iPhone 7 in 2017. Techies expect the iPhone 7 to be a major advancement in the Apple lineage. With a large announcement looming, the iPhone SE is designed to diversify their product line with a cost-friendly option to hold Apple lovers over and combat the probability that iPhone sales will decline for the first time in company history in 2016.

At $399 without a contract, Apple seems to be aiming to take a bite out of the cost-friendly Android market. Although the average price for an Android smartphone was about $215 at the end of 2015, the difference may entice those drawn by the allure of Apple products.

Last year, Apple took a big bite out of China. In the 4th Quarter of 2015, iPhone sales grew 33% in China. Having recently lost their crown as largest smartphone vendor in China to Xiaomi, the Chinese market represents a major area of potential growth for Apple. Affordable options with premium processing power have the potential to eat into Android’s sales in rural and urban Chinese markets.

The move to more affordable iPhones began with the iPhone 5c; however, supply chain problems taught Apple that using new material can produce unforeseen difficulties. Foxconn announced that the iPhone 5 was the most difficult device they have ever assembled. By recycling iPhone 5 design, materials, and supply chain, iPhone SE is a much cheaper product to create and manufacture.

Some argue that smartphone UX has not advanced with screen-size and few phones have UX features specifically designed for large-screen devices. Whether or not this influenced Apple’s decision to downsize, the affordability, overseas sales potential, and diversified design certainly make the iPhone SE an attractive device for the company. The question now becomes: will Apple unveil a larger iPhone 7 in 2017 with groundbreaking large-screen UX? We’ll have to wait and see.