This is another Pareto Principle oriented topic that can help you structure your monetization methods to achieve significantly greater revenue and potential for profitability. The Pareto Principle asserts that roughly 80% of your revenue will come from roughly 20% of your efforts. Sometimes it is 90%/10%, other times 70%/30%. The core objective is properly defining the specific activities that generate the most revenue or attract the most new users. There is also considerable dependence upon having a large enough user base to minimize statistical deviation.
Application of the Pareto Principle could be used to say that 20% of your customers will generate 80% of your revenue; and the inverse – the remaining 80% of your customers will generate the 20% balance of your revenue. You could even define your own work and activity in similar terms by saying that 20% of what you do will generate 80% of your revenue.
The super-user classification, however, goes into the second tier of Pareto Principle application – that is to identify the 20% of your top 20% revenue or new user generating customers, i.e. your Top 4%. That’s your super-user segment.
How can you appeal to your paying super-users? It could be as simple as offering larger or bulk purchase deals.
Let’s say you sell in-app currency for real money offering packages for $1.00, $2.50, $5.00, $10.00 and $25.00. This offers something for the vast majority of the customers who may opt to purchase your app’s currency. If you are seeing a significant ratio of $25.00 purchases, you may consider adding a larger package for $40 or $50.
That’s not entirely out of the question. One major online company has indicated that roughly 3% of their customers spend $100 per month on their social network games (a combination of PC and Mobile apps).
Thus, merely by adding another tier of package pricing to your app’s currency store, you could see your super-user revenue increase by 50%, potentially 100%. Of course, it is not entirely that simple, but it is worth testing with a pilot run over one week. Obviously, too, the package should clearly be worth the extra charge and you probably want to practice some pricing restraints, i.e. a price ceiling of $100.
What this asserts is that some experimentation with the pricing of your app’s currency or vanity store items can significantly impact your revenue (positively or negatively). Ongoing, early testing and experimentation will help you find your sweet spots. Relative to the total amount of work that went into producing and marketing your app, how much work is this? It almost doesn’t register as a single percentage point.
How can you appeal to your top “evangelists”? Your other super user segment involves people who may not be spending money on your app but are attracting people to it – bloggers, reviewers, active social gamers and networkers. Almost every online game has a “refer a friend” option which frequently rewards them with in-game currency for each referral who signs up and/or who plays to a certain point.
First, if you don’t have a referral incentive program for your game already, you should probably make one. Secondly though, you want to spend some time reinforcing their efforts. This may require some tracking, for which there are tracking tools available.
If you know of fan sites or blogs, periodically reference them on your own forum/s or web site. If someone posts to your Facebook page, thank them for their post and consider granting a small, but noteworthy, in-game “prize”. The only limits are your own creativity and willingness to invest a small amount of time into the people who are trying to help you – even if, for their own reasons.
And Everyone Else
The super-user segment does not mean that you should ignore or dismiss the other 80 or 96% of your customers. It could, however, prompt you to evaluate substantially reducing the amount of effort you invest into supporting the lower tier 4% and 20% of your customers who are draining your resources (i.e. forum trolls, uncommon devices where your app is simply not working as intended, etc.)
Fundamentally, the larger your user base, the better – in the extreme majority of cases.
Finally, the Pareto Principle is not an exact thing; it is a very useful guideline. It requires keeping apples, apples; and oranges, oranges. It was originally the result of an observation of wealth distribution that 20% of the population controls 80% of the wealth, something that holds true (or truer….) today. It is applicable to categorizing the work that yields revenue in mobile app development.
By and large, developing – creating an app generates no money whatsoever. The marketing and promotion of it does.
Market reach counts – advertising on Opera Mobile Store can get your app in front of millions of end-users you are not likely to reach otherwise. Contact our sales team today!
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