How to Build and Monetize Your App

How to build and monetize your mobile app.

More than 20 apps in Sourcebits’ portfolio have hit the Top 10 in their categories or cracked the overall Top 200. In this post, Sourcebits’ CEO, Rohit Singal, will share the secrets to creating and monetizing apps in today’s mobile ecosystem.

The Idea: Where is The Money?: The first step in developing any app is determining where the money going to come in from once it’s launched. Apps can be paid, subscription, freemium, shareware or ad-enabled. Thinking of monetization first will help drive a design that can bring a return later.

Rohit espouses the 5-5-3 test. An app is most likely to be a monetary success if a user can realistically be expected to use it at least 5 times a day, for at least five minutes per use, and will keep the app for at least 3 months. Yes, there examples of successful apps that don’t pass 5-5-3 test, but why not give yourself the best possible chance from the start?

Rohit also believes that freemium is generally the best monetization model, particularly for newer developers. It’s much more difficult to get paid apps to market and ranked in the App Store because the friction to acquire a new customer is much higher, and the snowball effect that drives many free apps to the top is much less pronounced for paid apps. If you have the budget to spend $100,000 to properly market a free app there’s a very good chance it will get to the Top 200 in the App Store, but the same doesn’t always hold true with paid apps.

Addiction and Problem Solving: Once you’ve set the yardstick for your app with the 5-5-3 test you’ll need to create what Rohit calls, “addiction factors” that will ensure that your app passes the test once it’s launch. You’ll also need to create in-app purchases like virtual goods, new levels, or extra features. With the power of repeat in-app purchases you can earn $100 or more from a single download– versus $29.95 for traditional paid desktop app purchase.

Once the app is established and successful, rather than new features you should focus on improving functionality. That will keep users rating the app highly and coming back to use it again. When your user base is large enough, adding more in-app consumables that enhance the customer experience will drive significant revenue.

Solving Problems: While solving an old problem in a new way with an app can be a viable path to success, it’s important to ask yourself how large is your potential user base is. If you are solve a real problem that many people are having it’s much easier to reach a Top 10 ranking on the App Store. But it’s important to be honest with yourself and not over-estimate the market just because the app solves a problem for you. If the audience is niche, you can still grow a user base because you’ll have fewer competitors and a targeted market. But if your app solves a universal problem, mass adoption is possible, and massive success is much more likely.

Execution and Focus on UX:If an app doesn’t deliver an outstanding user experience it’s highly unlikely to succeed in today’s competitive app market. It’s important to use natural gestures for natural interaction with your app so users don’t need any instruction to use or navigate the app. It’s also key to make the app responsive to the platform it is developed for. Take advantage of the nuances of that platform and get everything you can out of the fact that you’re developing natively.

Rather than giving users multiple options, Rohit suggests that you drive the user experience based on your own expert vision. While it’s important to pay attention to user ratings, don’t let a handful of people who complain about (or praise) your app drive everything. If you change things based solely on a small percentage of people who voice their opinion you may actually lose the loyal majority who is happy using your app, but just silent.

The Team: If you’re building your own mobile team rather than outsourcing, don’t focus on hiring “rock star” app developers. You’ll get better results with someone who is passionate about your project and supports your unique vision. One of the best developers Rohit has ever hired dropped out of college and didn’t have the traditional credentials, but as Rohit says, “you could see the passion in his eyes.”

Keeping Costs Down: If you’re building the app yourself, you can keep your costs lower by using SDKs and pre-built components.

Getting Ready for Launch: It’s crucial to capture analytics on how the user interacts with your app, so make sure you’re using an analytics tool so you can measure everything.

Start preparing your social engagement. While Twitter and Facebook are a good start, if your app is in the right genre consider channels like LinkedIn or Pinterest as well. A well run launch campaign will include email as well as device notifications where you ask the user to rate the app and provide incentives to do it. You won’t have this luxury the first time around, but if you capture emails in your first app and have a moderate success, you will have a much easier path to making your second app a hit. According to Rohit, an email user list of 100,000 users will take your app to Top 200 easily, so it is extremely important to build your list with your first app.

Marketing: Viral, Video, and Screenshots: Before launch you’ll want to use niche forums including Reddit, Touch Arcade, and tech sites such as TechCrunch, Mashable, and ReadWrite Web to build the apps’ popularity.

Rohit suggests sending these sites an announcement from you personally with a subject like, “Exculsively for you from xxxx – the app name and its usability.” A professional video of your app will more than pay for itself in increased virality and downloads. Make sure your screen shots are as good as possible for the App Store. Screenshots are one of the most important pieces of your marketing and should be taken care of early. If you’re fortunate enough to have Apple feature your app, they may request screenshots be sent within 48 hours. If you’re not ready, you’ll regret it later.

Launch Day: The launch day is crucial, and timing is everything. Friday evenings are good and give you a full weekend when people are more likely to be downloading apps. Make sure you’re ready for a potential App Store feature with those screenshots you already prepared.

To help spread the word, give out free goodies to your base of friends and family to get things rolling. It’s also key to reply quickly to emails you get the few days and encourage those users to talk about you by offering them something special. This builds a strong user base and recommendation network, and is the start of your fan base. Make sure you capture your fan base details in a database so you can use that information to promote your next app.

Advertising: Unless you have a large existing e-mail list or an extraordinarily viral app, you’ll need to push initial adoption with an ad campaign. The first week is the key, and you’ll want to use your entire ad budget in the initial 7 days, with a significant portion going to day one. You’re pushing hard to get maximum velocity on the first day. For the vast majority of apps getting a top 200 will happen in 48 hours if it’s ever going to happen. If you try to iterate, pivot, or spend your ad dollars later, you will lose that very limited window to rank.

Ad Types: The type of ad you use will determine your user acquisition. Media vendors offer click-based, install-based, and impression-based ads. Your best bet is install-based ads, where it takes $0.5 to $1.5 to acquire user for a typical free app. You can also incentivize installations of your app by offering goodies. Using both incentivized ad networks (TapJoy, Flurry) and non-incentivized ad networks will give you a well-rounded user base. It’s important to plan ahead to ensure that you have an adequate ad budget. Most apps that crack the Top 200 invest substantially and blast all their guns at the right time.

It’s also key to reach out to popular blogs to feature your app. To approach them, think about why you’d care about your app if you were one of their readers and position your story from that perspective. Blog mentions are doubly valuable because they drive installs and you can use quotes from them on your App Store page.

Analyze: It’s important to use Flurry or a similar tool to analyze your data. You’re looking for the same 5-5-3 components you set as your initial goals. Look at user frequency, usage time, and retention. It’s also key to send updates to your users regularly.

Watch Your Ratings: Blog posts and guest posts help significantly as they influence user ratings. If you find a rating that is clearly malicious, report it to Apple. Rohit once found a comment for one of his apps that said, “no one has given your one star, and I am giving it.” When that caused the app to drop from 5 stars to 4.5, Rohit reported it and Apple removed the review in under two hours–preserving the 5 star rating.

What to Do If It Doesn’t Work: In Rohit’s experience, if your app doesn’t succeed, it’s generally not worth iterating to improve your ratings. Instead, accept failure and make a major pivot to improve.

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Rohit Singal is Sourcebits’ Founder and CEO. Follow Rohit on Twitter: @rohitsingal