It seems that everybody has a branded app these days, and it can be hard not to suffer from FOMO. Before you make a big financial decision, let’s talk about why you want to build an app — I’ve always held that the best way to make a decision is to write down exactly what you want from it, then see whether the steps you’re taking lead to that goal.
What do you want from your app?
Well, you’re not alone there. Data supports cold hard cash being the primary reason for branded app development by a solid margin. You really have two sub-questions here:
If 2>1, then you’re onto something. Let’s break down that first point a bit more. The common advice is that you should price an app about the same as you’d price a car: $10,000–$20,000 will get you something stable but unimpressive, $50,000 will get you something high-end, and $100,000+ will get you luxury. $1000 or less can get you something, but good money says it’ll catch fire if you take it on the highway. Or rather, even if a $1000 car would get you around, would it be reliable enough for commercial use? Probably not.
What about earnings, then? Well, the first thing I’d caution is to not put a lot of faith in averages. They’re the main currency of most app earning stats, but they can be incredibly misleading: if you make $1,000,000 and your neighbor Bob makes $0, then your average income in $500,000. Likewise, there’s a huge gap between the apps that make money and those that don’t. The current top-earner is Clash of Clans, which pulls $2,180,000/month. The fifth best-selling game is Boom Beach, which earns … $82,000/month. While that’s still a respectable income, that income is on less of a curve than a cliff. A lot of companies have gone off to make a branded game because they saw the incredible statistic that game apps average $22,000/month in income, without considering:
Your app’s income is going to vary a lot depending on your category. Games are an outlier with outliers (with outliers, with outliers, with outlie—) and the monthly average for the #2 category (entertainment) is … $3000. Oof. There’s less crazy outliers throwing that average off, so it’s a better representation of the sort of income you can actually expect.
It’s not all doom and gloom: apps have significantly higher purchase frequency and purchase value than mobile websites, and they’re still managing to beat out desktop. This lead is on-track to increase further as time goes on, and apps become more dominant in the market. $3000/month will pay off your average app’s production cost in less than a year—if you’re planning to operate it for longer than that, then you’re probably onto a good thing.
Which is a lot of words to say … branded apps aren’t a gold rush, but they’re definitely valuable. Like any other business strategy, they’re something you’re going to need to sink time and money into if you want to see a return on investment. They’ll earn back their money over time, but you need to be realistic about how that’s going to play out.
Hey, this one’s a little more straightforward. Getting your branding in front of users (even when you’re not charging them) is critical in engaging them with your conversion funnel. An app can be a great tool for generating awareness: you’re always in your customer’s pocket, a tap or two away.
The Tong Kee Bakery app is a pretty fun example of this. TKB is a popular bakery chain in Kuala Lumpur. Their app provides discounts for their products and helps users find the nearest store, but they’ve cut deals with a number of other retailers in the city so users can pay in other shops using their TK Bakery wallet. Since users have got money in their TK wallet, they may as well pay using it in the connected stores, which means they’re going through a bunch of TK branding an announcements whenever they pay.
This is really the best way to use an app: it’s a top-funnel awareness generator with low-funnel capability to help keep you in the black. It’s not that you can’t make money, but it’s hardly guaranteed. You can, if you get the right app made, generate a massive amount of awareness, and awareness leads to conversions—it just takes the long way around.
Well, that’s a trickier one, but not as unattainable as it sounds. This one is all in the conception stage—figure out where the holes are in the market, figure out how those holes tie in to your company, then fill them. What little annoyances do you have in your day-to-day, and what sort of application would make them go away? If it’s within your budget and within the purview of your brand, then you’ve got an idea of the sort of thing you want to get developed. It’s hard to change the world in big ways, but there’s lots of smaller ways to change things, if you’re clever.
One thing you’ve probably noticed is that these three steps all tie together: you want to make money? Fill a niche and build your brand. If you’re sold on the idea and are wondering where to get an affordable team to build an app for you, check out our Top Ten Tips for Hiring an App Developer. If you’re thinking specifically about Apple, you might also want to take a look at our iOS App Design and Marketing Tips.
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