Ever wondered how to create an app that generates profit? Let’s read more about creating a profitable app.

Making a profitable app is something an app developer should know how to manage. But it isn’t as easy as it seems. While it may be incredibly important to create an app based on great ideas, but it is also extremely important to make sure you create a mobile application that people would want to use. It is important to keep in mind that creating apps aren’t cheap – and also that more often than not, an app is bound to fail. That is why it is important to know how to create an app that generates profit for creators.

Here we’ll tell you about how you can create an app that generates more profit than investment. This is the perfect read for you to learn more about a profitable app, whether you’ve got an app or want to create one.

How profitable can an App be?

It is something unfortunate yet very common that all apps that appear on the App Store end up in loss. The cost of making an app is often much higher than what an app developer makes throughout the duration of the app.  It is a fact that 1/10th of mobile apps use more funding than they can reflect in profit. Hence the question arises – is it worth creating an app? Why are the profit stats so poor?

The answer lies in simple, outdated methods and thought processes of app developers. Often creators of apps believe that users will install the app if they create it, which is untrue. Mobile app users have a large set of mobile apps to choose from, which is why a developer has to work hard on grabbing the user’s attention. Acquiring users is a skill that we will talk about in this write-up. So let’s talk about mobile analytics and mobile app success.

Don’t rush it!

More often than not, app developers know what their app is meant to be. An app is meant to be a product that solves the user’s problems. You can’t build an app with every single feature – that’s too extra! An app must be a Minimum Viable Product (MVP). Make sure that when you launch an app, you give users time to realize what problems your app can solve, and then move on to actually solving problems one after the other. Also, make sure you test your mobile app analytics.

Creating a Profitable App is important for a developer, and there are many ways to monetize an app.

What Mobile Analytic Tools do I need?

There are wide arrays of Mobile Analytics Tools you can use when you create your app. One of the more convenient tools is Segment.com because it collects all the possible data a developer would need. It then sends all the collected data to a third party provider if required for the Interface of Features availability. The only con to this tool is that it is a paid app for developers who have 1000+ Monthly Active Users.

There are also many free Mobile Analytics Tools that you can use when creating an app. Google Analytics, Heap, or Flurry are great examples. This is a very cost-efficient way to develop an app in a short span of time.

What Mobile App Metrics work well?

Let’s begin by discussing the simple fact that there are n number of ways to measure your mobile app’s metrics. But how you determine a good way to analyze? As a mobile app developer who has carried out adequate research, you might know of the following metrics that work for nearly any type of mobile app analysis.

Average Revenue per Daily Active User (ARPDAU)

An app showing good retention needs to be able to earn good money. This can be done in more than one way –
In-App Purchases
Subscriptions or
Merchandise and similar goods.

Regardless of what method is used to earn money, Average Revenue per Daily Active User (ARPDAU) is the best metric to monitor an app’s profit in ratio to how often users use the app.

ARPDAU is the average revenue of a single day divided by the number of users of the app for that same day.

This is a great analytic tool to measure profit due to its consistent nature of calculation, even when the number of app users fluctuates.

Should you invest in User Acquisition?

It is never an easy decision to make when determining where and how you should spend when running your app. This is because when the app is created, it is uncertain how many users will benefit the app in return for using the app. This is why Cost Per Install is important in this case. CPI is nothing but the amount put into getting one user to download your app. There are many factors that decide what your CPI would be. Some of these factors are:
– Platform or Mode of advertisement
– Type of advertisement content: Ads could be videos, graphic, photographic, pop-up, etc in nature.
– Your App Store Marketing Strategy

When you create an app, you invest not only monetary funds but also invest a considerable amount of time creating, assessing and updating the app. A successful mobile app usually requires more investment in Mobile App Marketing as compared to Mobile App Development. This is something a creator should keep in mind when making investments and creating an app budget. Generally, 1000 downloads for an app is a good start unless it is a networking app.

What’s next?

With all the knowledge you collected from the article above, now comes the actual measuring of a profitable app. The simplest and most obvious way is to go by the numbers. Check the profit against the expenses while the app is running and then decide if you have achieved your goals or not. This works just as well as the above-mentioned metrics. Meanwhile, it isn’t best to only stick to one measure of app profitability, so here are a few more.

  1. Word of Mouth.
    Word of mouth is a very common and old fashioned way to determine how well your app is doing. Include talking about your apps in crowds in your networking routine, and your app is bound to attract users.
  2. Reference Based Acquisition.
    It is important that when your circles of beta users or personal connections download the app, they talk about it to others. This encourages trying out the app in a snowball pattern. Count how many people suggest the app to others, and measure your success based on that.
  3. Subscriptions Churn Rate.
    This is nothing but a simple reading of repetitive users who use the app. When apps provide subscription, this refers to the number of users that renew their subscription.

Now that you’re familiar with what it takes to create a profitable app, we’re eager to see some great apps in the future! Let us know how you find this guide, and if you like it, share it!

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