Want to create more value for your users and increas your own monetization at the same time? The answer to this question would probably be “yes…but how?”. So what is the challenge here? In the last days and months we have increasingly been thinking about how to increase value and monetization of apps while maintaining its original utility. Of course, there are many ways to increase the value of an app: extra functionality, more levels, better graphics, usability, social features and so on. There also are a lot of ways of increasing monetization of apps: increase price, subscriptions, In-App sale of virtual goods or extra levels as well as more advertising and new advertising spaces (like showing an ad while the app is launching). Many of the latter examples fit in both categories: selling additional levels, for example, increases your monetization while providing more and extra utility to the user.
So maybe we should redefine the question: how do you increase value for your users as well as your app monetization without making the user pay for it? The answer to this question we do not have. But we have a guess – connect them to the offline world. Lately, we seem to have seen and heard about quite a few mobile apps that help the user better orientate in the immediate offline (“real”) world or simply make it more fun (or both). RedLaser is a perfect example of this. “Real World Mobile Social Gaming” (sorry, our own term) is another one. Services like Fourquare, Gowalla and since today Aka-Aki (congrats!) seem to be popping up increasingly – and they seem to be providing a lot of utility to their users.
(On a side note: check out this crazy app we came across today – it’s basically a military app but can be used to services like police or firemen as well).
Many of the above named apps have been and still are top sellers in the App Store, so it is safe to say that “making mobile more real life” is an almost safe bet in terms of providing utility. And we think herein lies a great chance. By leading customers to certain locations, retailers, bars, restaurants or even gyms, these apps provide value to the location as well as to the user. And most certainly, they will see an increase in revenue by customers being led to them. So why not make them pay for it?
Of course, this isn’t our or a new idea. Foursquare has been playing with this for some time now e.g. by having local venues give out free drinks or the like to the “mayor” of that venue. Discount coupons (as barcodes) are another example of how this could work. In our opinion the real challenge lies in the extensive long tail of localities these apps need to reach in order to generate a lot of revenues. Reaching out to the bulk of venues in a certain city, asking them for some kind of special deal or discount is not an easy task – and it only works for both sides if the service has reached a certain scale. But we are sure this can be done.
So the point of this article was not to just think out loud, but also to show the potential services may have in terms of making money while providing value to their users. If both of these are aligned, the potential just seems massive. Have some more ideas on how to align them?