Draw Inspiration From 10 Mobile App Business Models
Building a business out of a mobile app isn’t as flashy as it used to be 10 years ago, but there are some great models you can still take advantage of up to this day.
The great thing about today’s app environment is that both you as a founder or business owner and the end-user have more options to choose from, with less of the tech burden.
Low-code technologies like Glide apps can help you build a functional mobile app in just under 3 weeks with the help of a professional development agency like LowCode Agency.
I’ll go through some powerful business models in this article, and how they can help you design an app that’s not only useful for end-users but also profitable for you…
App Business Model #1: Subscription (SaaS)
If you haven’t heard the term yet, Software-as-a-Service (SaaS) is a powerful business model that allows you to sell software (your app) for a recurring fee—either monthly or annually.
The great thing about the SaaS model is that it’s very flexible and can be customized to whatever you want to include as part of your “packages” or “tiers.”
Subscription models like SaaS are ideal for business mobile apps
Based on your target audience, the more advanced features can be included as part of certain tiers, whereas in other cases it makes sense to include the whole package in just one monthly tier and increase the price as customers add team members or custom metrics to their plan.
While definitely powerful, the SaaS model is hard to pull off in the sense that it would normally require you to have programming skills. That would have been the case 3-4 years ago.
However, you can now?get a mobile app with an integrated SaaS business model?without touching a single line of code thanks to strong growth in low-code technologies.
App Business Model #2: White-Label Solutions
A trend that is growing strongly in the mobile app world is businesses wanting to offer fully-branded experiences to customers, partners, and team members.
Businesses have grown tired of the standard interfaces that software providers use, making it valuable for them to get their own customized interface on top of the functionality.?
This effect can be achieved in 2 ways:
The reason why I mention the 1st option is that the 2nd one is quite complex to achieve, just like a SaaS model. Unlike the SaaS model however, white-label solutions can be sold on a license basis (i.e. pay per X users with a yearly commitment) which works with the 1st option.
If you do want to let the customer tweak all configurations themselves, you can hire a professional development firm like?LowCode Agency?to get it done for you.
App Business Model #3: Creators & Community
As part of the “creator economy” boom, a lot of companies are looking to design and build digital content platform capabilities to allow for unique monetization experiences.
The great thing about this business model is that, if you are able to build a strong enough community around the app, people will start flocking to it on autopilot.
The Super Follow feature on Twitter now lets you subscribe to a specific creator
And with a commission % revenue model where you take, say, 15% of each transaction; it’s relatively simple to start generating cash flow from creators on the platform.
There are 2 major challenges with this business model:
With every platform where payments are allowed, there’s always going to be the issue of protecting yourself from fraud and “bad” users. This is one of the major challenges of pulling it off, but it’s also a major profit driver if you can provide a safe environment.
App Business Model #4: Gated Features
Gating features behind a paywall is a favorite of many fast-paced online businesses, especially if those features are only needed for a brief period of time before the user churns.
Gated features ensure customers go ahead with a purchase only when necessary
Examples for apps that would benefit the most from this are logo makers, self-made design services, file conversion apps, and other “deliverable-style” software.
Here’s a practical scenario:
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This is a very typical scenario and, although it can be annoying, some online services are able to pull this off rather effectively. The important thing here is to offer the right price.
If a user does all of that work only to see themselves paywalled with a $34.99 yearly subscription, they’re not going to go for it and they will talk badly about your app.
If a user does all of that work only to see themselves paywalled with a $34.99 yearly subscription, they’re not going to go for it.
But if you give them either the option to download 1 Gif for $1.99 or subscribe for as little as $3.99/mo, they might well consider your offer. It sits within “impulse-buy” range.
Of course, this is a business model that requires volume to work. That’s why the first option is to add a logo as a watermark so that more people get to know about the app quickly.
App Business Model #5: In-App Purchases
This is the standard in mobile apps; you download one for free, whether that be a game, a productivity app, or a business solution, and you pay directly from within the interface.
For business purposes, this isn’t as powerful as something like a game since it doesn’t guarantee recurring revenue, although you can create in-app subscriptions as well.
Fiverr allows you to purchase services at a set price via their mobile app
In-app purchases work well for:
If you want to sell to other businesses with this model in mind, you’re either looking to create an eCommerce shop that sells products in bulk or offer “productized” services.
A productized service?is a service limited in scope by a predefined “package” that you offer for $X either as a one-time fee or on a recurring basis. It’s not super easy to pull off because you need to be able to personalize while staying broad enough to fit a specific target audience.
App Business Model #6: Paid Apps
Paying for an app upfront is definitely old school but it may still work if you’re looking to sell support licenses the way software providers have done for decades.
Affinity still offers their apps on a license basis because it makes them stand out
Nothing wrong with that, it just won’t have the same effect on the market as selling access to a set of tools for a lower price and retain the customer for years instead of a one-time purchase and then you don’t really know what they are doing with your product anymore.
Paying for an app upfront works well when:
We don’t recommend paid apps if you’re looking to sell a business process like inventory management or customer relationship management.?
SaaS is best for those.
App Business Model #7: In-App Advertising
Ads are also one of the more traditional ways to monetize an app but they don’t fit well with what customers expect from a modern mobile app today. Lazily spreading ads throughout your app in hopes that someone will click on them and generate you a tiny bit of money is not worth it.
Mobile ads work well for:
You don’t want to plaster a community app with ads; it’s the exact opposite experience of what a creator would want for their members. Instead, you should focus on creating rich media experiences that are augmented with relevant ads as part of the content itself.
App Business Model #8: Sponsorships
Sponsorships?are a good business model if you’re building a media experience and can work on a certain creator platform type of apps. They’re certainly not the most straightforward to design or build as they require a network of deep-pocketed companies ready to pay for a mention.
I’m putting both this and affiliate marketing at the bottom of the list because—while interesting—they are quite hard to pull off and require a lot of time building a personal or business network without any guarantee that you’ll make a profit one day. Not easy!
App Business Model #9: Affiliate Marketing
It’s not typical to have mobile apps making heavy use of affiliate marketing practices;?this is more popular in the blogging scene?as the medium makes it easy to share information related to certain products and services. However, some apps like publishing apps may well have integrated browsing experiences which can turn affiliate links into direct purchases.