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Why no one is paying for my Freemium App?

Having an issue with lower conversion rate for your ‘Freemium Apps’? You’re not the only one! Creating a compelling user experience and meaningful feature is critical to the success of any mobile application! It will not make a difference if you play around with the price or promotion; if users don’t value the experience your apps provide.

As the history goes on to say:it was in March 2006 when Fred Wilson described a business model that involved giving fully featured software for Free. And the term freemium was coined by Jarid Lukin a former director of eCommerce.

As a practice it is a simple concept; where you need to build a great product and give away majority of it for free! With-in the application you will have some built-in hooks’ that would lead customer to purchase something – a digital good, better experience, a locked feature, or say a unique level! 

Ever wonder why would a bank give you an app for ‘Free’? Or why is it seamlessly so easy for you to purchase a ‘Paid’ version of Dropbox? As an app developer how you can make your users convert from freemium to a premium version of your App without forcing them to do so!

Free

There are few things as app developer you should keep in your mind…

What you are giving away for free has to have a fantastic UI design as well as some value.Customer care about what are they getting for free…and the value it provides for them. Just giving anything for free and in turn expecting them to pay for more feature will not work!

Let’s talk about Evernote; they have close to 100 million+ users, and only 3.5 % of users are actually paid users. The conversion rate is very small but if you think in the context of 100 million; it is in fact huge! So why is that Evernote is successful? 

Realize this: Evernote > always had a search option. You could search for documents and it is beautifully designed; however, with the premium version to get to search within the document…now that is a real good need! The question that comes in the mind of a user who is using a freemium app,

“what if I can search with-in documents”

Free

This is where seamless transition happens, Evernote is not selling you something new, it is just an expanded version…as a developer or product manager for the app you need to entice some one; and then capitalize on the desire! And that is where you can leverage freemium to generate revenue!

Apart from creating a great product which generates revenue, it is to build something that people come back…

Another example is of Dropbox; why would you convert? You always had free storage…at your disposal, but there is a need for more…and that is where you ask a question to ‘Virtually’ yourself and App; how can I get the more storage? And this is where the Premium helps you!

Measuring the Usage and not just Download!

You need to understand that just because your app is a free to all, and scores huge number of downloads; doesn’t always mean that it is being used! You need to have very very targeted effort on Average Weekly/ Monthly/ Yearly usage, and not jus the downloads. User should care enough to use, come back and see the value in your App.

As a product manger for these apps you should think, and think on What if terms, you should know what questions user could be asking themselves? What are the use cases for premium apps.

This is absolutely clear that in App business you are talking in currency, and one of them is “Currency of User’s time” : If your app can make the first impression, for the first time; and for freemium it is very important, that is the initial sell. And once this is done, you need to make it a part of their pattern, day and / or week. From there you should then use the hooks that allows the user to willingly pay you for usage…this way you create a natural balance to use!

And also you end up closing the gap between use and Pay!

Your users should not even feel like it is a conversion, for them it should just be extending what you’re doing
Introducing a new feature…I am searching now, I can search more [Evernote]…I am dropping more[Dropbox]…

Are not you seeing a great pull from users…it is so much pull from them…this is not just selling…you should find that sweet spot, where there is no friction…

Another important point is Price! 

There is always a threshold of price like say for games they are almost always charged at USD 0.99 or say INR 99 etc..There is always a mental threshold for mobility…which says anything accept very low!

Pricing is a strategy…for Evernote it is USD 40 for a year, and this is a mental threshold, for one user USD 40, and for 3.5 million…whooo hooo! This is huge! 

Why don’t people convert? You only have the answer for this!

Because your app doesn’t make things easier for them…once they wanna buy its a huge trend in favor of you! You have to make it very simple…have an option feedback in case something goes wrong if you are using a security code, let user know what does that mean…use less of abbreviations which your user staff may know, but your users may not! Don’t make it painful for them. Since you’ve got the value proposition, now you need to make experience of buying simple…for example don’t ask for Credit Card again and again!

How do you promote to let people know that there is a paid model?

This is immensely important, as you really don’t want to stick it in to their face…It is very critical for you to not to interrupt users in the middle of a task! Users really do’t convert when the real value is hidden behind the ‘Paywall’

Make your App and the experience associated with this app so beautiful that you create get big community, and in turn the community advertise for you! This is pretty obvious but at times the focus is so much on the conversion and getting business value out of the app, that you almost forgot that app needs to have a great user experience.

I would end it by saying, why is that a bank gives away the app for free..? Simple since its the app which is a front end for the services they have to offer, and in turn it only increases the business for them.

Some times let it be free, it can be a front end for your customers!

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Posted by on January 17, 2014 in iPhone, Mobile Applications

 

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