THE PAID-TO-FREE SWITCHEROO WHILE SUPPORTING PAST CUSTOMERS

This article was fist published in Make App Magazine in December, and they gave me permission to republish here.

A popular method on the developer forums that is supposed to increase traffic and revenue is to switch your app from paid to free. In this article I’ll talk about my own experience of using this technique. It’s no secret that freemium is all the rage right now on the App Store – free apps will get you more downloads than a paid one, usually by at least a factor of 10. Even if you could set a paid app at 1 cent, it’d still be a barrier to download the app. Traffic is the hardest thing for a developer to get, so this technique helps solve this problem, at least temporarily.

Whenever an app switches from paid to free it gets picked up by lots of websites and apps that scrape the App Store for price drops. The result is that it leads to lots of downloads and if your app is lucky enough it gets ranked and gets even more exposure. The whole idea behind this exercise is to grow your user base and raise awareness for your app. In the process you should optimize the monetization of your free app so that the whole exercise is ROI positive.

paid to free, however there are some services that help boost the downloads when switching your app to free by using their distribution network. The popular “Free App A Day” services include Free App A Day, Monster Free Apps, Free App Party and so on. I suggest testing out one of the smaller, free ones first. The more established sites can charge anywhere from $5,000 and up, whereas the newer sites that are trying to make a name for themselves are often willing to promote your app from around $200 and sometimes even for no cost at all. Once you are sure that your app can make money as a free app you can consider using the higher priced services. Switching your app from paid to free gets you a lot of traffic, but if you don’t monetize that traffic then the whole exercise is pretty much pointless.
ONE CITIZEN’S EXPERIENCE WITH THE PAID-TO-FREE SWITCHEROO
“The whole idea behind this exercise is to grow your user base and raise awareness for your app.”
[box] “It is possible to get a spike of traffic simply by switching your app from paid to free, however there are some services that help boost… downloads”[/box] Monetizing all that free traffic is a careful game you must play. You don’t want it to impede the success of the app by showing obtrusive ads, but at the same time you’re trying to create a business that can self-sustain itself so that you can build more apps. There are many ways to monetize a free app, but I’m only going to talk about what I use.
Probably the most common way to monetize apps is through in- app purchases. They say about 1% of users pay through in-app purchases, but that’s only if you have a strong call to action. I have a few in-app purchases (IAP) in my game Infinity Control, but the conversion rate is far lower than 1% and I believe the reason for the low conversion rate in my app is because the call to action (CTA) isn’t strong enough. I think I avoided using a strong CTA because of my dislike for apps that really push their in-app purchases at you. Now, however, I realize that you have to inform the user “hey, there’s more you can do if you buy this”. Once the user has been properly informed, you’re leaving it in their hands whether to purchase the IAP or not. In future apps I will keep testing in-app purchases until I can find a happy balance between good game play and monetization.
The other major way to monetize free apps is through ads. I’ve tested many ad networks. One network that worked well for me initially is Revmob. In the developer forums, everyone is talking about how they have the highest payouts. Their eCPM (effective cost per 1000 impressions) is probably the highest around and their CPI (cost per install) is very high too. Sometimes they would pay out up to $10 for an app install. Now what more could you want from an ad network? However, the downside of Revmob is that their fill rate is not 100% and when I tested it out it was in fact far lower than that, especially for users outside the US.
I’m never satisfied with the status quo, so I continued testing other ad networks. One that’s worked quite well for me is Chartboost. They have the second highest eCPM I’ve seen and a much higher fill rate. Even when an ad can’t be shown from their network, an ad of one of your apps is shown, so you are really maximizing your impressions. Between Revmob and Chartboost, I’m making more money from Chartboost just because of the higher fill rate. So that shows you test, test and test some more. What everyone is saying that works the best for them may not be the case for you.Going free does have its down side too. You may get lots of traffic for a couple days but that traffic is only going to last for so long. Before you know it, that traffic is going to hit rock bottom and you’re going to be making even less money on in-app purchases and ads than if your app was paid. So of course you switch back to paid, however that totally kills your downloads. I’ve found that through optimizing the monetization of my free apps the revenue per install of the free version is around $0.15. I keep my app free as long as the amount of downloads is high enough to generate more revenue than I would earn if the app was paid.
[box] “I’ve found that through optimizing the monetization of my free apps the revenue per install of the free version is around $0.15.”[/box] There are a few drawbacks to us- ing this method. One, is that each time you switch to free you will get less of an effect than you did previously. For example, the first time I used this method I generated 28,000 downloads in the first day. The second time I only got 500 downloads the first day. Second is an issue of user experience – you don’t want to start showing ads to users who paid for your app. Third, is an issue of value – why would someone pay for an app now, if they could have gotten it for free yesterday.
I’ve come up with a system to counter the second issue by tailoring the user experience in the app depending on what version was downloaded. I had my programmer (he’s an A player) create a system where I could turn on and off the in-app purchases remotely from my server. This allows me to jump between free and paid whenever I want, without upsetting my customers. It was very simple to set up and involves reading a text file on my server site which just says “On” or “Off”.The other modification that I made is so that whenever someone downloads my app as a paid app they will get all the content unlocked, with no ads. On the other hand, whenever they download it on a free promotion, they get the in-app purchases and ads. The information is stored in the keychain so even if they delete the app and then restore it, the app still knows if it was downloaded as paid or free. Even when I set it to paid and I have both paid and free users out there, I still make ad revenue.
The third issue that I’m trying to solve is the question of value. The trick in my eyes is to try to make the free promotion for a strictly limited time so as to not devalue my app. I’m also working on a way to sort and identify users by whether they are running the paid version or free version in order to reward them with exclusive content, hopefully keeping them as long term customers.So far I’ve used this system to generate over 50,000 downloads and jump between paid and free multiple times, importantly maintaining 4 stars ratings. I’ve gone to great lengths to market and monetize my app whilst trying to keep a good relationship with my customers. Hopefully one day that’ll pay off.
[box] “the first time I used this method I generated 28,000 downloads in the first day”[/box]
What I want you to take away from this is that you have to be just as creative in your marketing as you are in creating your apps. The exact tactics I use will change and may not even work six months from now. You should take away from this the thought process I had to come up with in order to generate these solutions. These exact tactics might not work for you but it’s a matter of testing out even crazy ideas, as wild as it may seem. As you can see, I don’t have everything figured out, but I’m getting there. After all it’s a tough market to stand out in if you’re doing the same thing as everyone else. Find your unique angle and go for it!

Rob McCrady

In 2007 I got bit by a mosquito and got west Nile virus. Then it became an autoimmune disease that left me in a wheelchair. They were able to stop the autoimmune disease and virus, so now all I have to worry about is physio. I'm getting better and soon I will rule the world.

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