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How to monetise your apps

Making money from apps is not just about which licensing model you choose. Miika Kettunen argues that being able to monitor customer behaviour is also vital

This article first appeared in issue 238 of .net magazine – the world's best-selling magazine for web designers and developers.

Selling your apps via the marketplaces provided by Apple, Google and Microsoft may provide access to millions of potential customers, but the high degree of control these platforms enjoy over the developer/consumer relationship presents a major challenge.

In a break from the norm, Microsoft now allows developers to choose their own commerce engine to use within the Windows Store, creating a huge opportunity for the developer community. There has been much debate around which payment method works best for which app. But what devs should start focusing on now is how best to take control of their customer relationships in the long term.

The drawbacks of app stores

In the same way that retailers don’t promote brands equally, app stores won’t promote all your titles on your behalf – so your next killer app jostles for position with a thousand others.

And as today’s app stores don’t release consumer data, developers lack the customer insight available through other channels. You might enjoy the distribution advantages that the major app stores offer, but miss the intelligence that could be driving closer relationships and higher revenues.

To build the most profitable relationship, developers need to be able to take back control of their customers. They need to understand who they are, what they’re interested in and gain sight of all their other behaviour.

But to talk directly to your customers, you need their contact data. While you could collect email addresses via email authentication or ask customers for their information at the point of registration, forcing them into data capture isn’t ideal. Asking them to send emails also involves moving to a channel outside the app, so it is detrimental to building a solid and meaningful dialogue.

Another option is to build a tool in-house that can monitor consumer buying behaviour and integrate this with your existing user-management software. However, the resulting system then needs to operate within the app itself: this presents a major technical challenge and means that you end up with two disparate systems.

Working within the app

Instead, the secret to a sustainable monetisation strategy lies in building direct relationships within the most appropriate environment for this – that of the app itself. Adding a range of flexible licensing models and real-time behavioural analytics completes the picture, making it possible to create a solid business approach.

Third party app commerce engines, like the one we have developed at Lotaris, have begun to provide these abilities, providing users with direct access to consumers and the power to analyse in-app behaviour.

Advances such as these give the development community the means to start taking back control of its customers. It becomes possible to engage in relevant, timely communication, including promotions, offers and cross-selling: you will be able to promote your less successful apps to the larger audience of your bestselling app, for example. And, rather than consumers going back into the app store to look for their next purchase, targeting them directly becomes an option.

Smartening up your marketing

In future, we will see sophisticated trigger-based campaigns become a reality, just as they have done within the email and social environments. Commerce engines will also be able to draw on data from social networks and offer recommendations from friends to help even more consumers discover your app, in much the same way that Amazon’s bookstore currently operates.

Being able to choose your own commerce engine enables you to take back control of your customers, and doing so will be pivotal in generating healthy profits in the future. After all, your users should be your own customers, not those of an app store.
 

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