These are again some thoughts on monetization strategies for apps. As we all know, monetizing an app (or the app development work) is key, not only to creating a business, but also for being able to actually spend some money on customer acquisition.

We talked to a developer recently, who is still in the process of finding out how he should further earn money with the acquired customers. Not only for the purpose of making more money, but also as a means of rewarding his ongoing efforts and work that went into the app over time. The app is a navigation product and is not something that can easily be monetized by using In-App Purchase for additional services. At the same time, the app is a product that, once bought, is used on a regular basis and provides a utility for the long term. For the developer this means that it does not only take constant updates and improvements on the app itself, it also takes a fair amount of customer service and communication with the user base. Up until now the users have received all the updates for free or, let’s say, as included in the initial purchase price.

The developer is now thinking about releasing a major new version of the app and is more or less unsure whether to charge for it or just give it away for free. From his point of view, asking for a new purchase is justified as it rewards a. an ongoing effort and b. though it will basically still be the same product it will be much more useful and different in many ways from the original app.

Tweetie is a very good example of charging for upgrades and, in our opinion, it seemed justified. However, charging for the new version of Tweetie caused a lot of discussion and negative remarks from many sides. What do you think is the right decision? After all, app developers are at the mercy of the customers that buy their products, are they not?