2 Apps Are Better Than 1
2 Apps Are Better Than 1
Reflect7 took the Freemium approach with our latest ad-based app, Final Madness. Freemium is basically offering up a set of limited features for Free and then charging for Premium features. Free + Premium = Freemium. Within the app store, there are two ways to execute this strategy:
1) Have two separate apps: 1 lite version and 1 premium version.
2) Have one app that offers and in-app upgrade.
We did the latter with Final Madness. Thus far, the results are mixed. The Final Madness conversion rate (the number of people who bought the upgrade out of all the people who downloaded) is a meager 1.55%. I thought it would raise up to around 5% once March Madness started, but instead, it has tanked a few tenths of a percentage. Why?
1) More Competition. When we first released, we had little to no competition in the Free section. Now there are 10 or so March Madness apps in the Free section and even more in the paid section. This hurts conversions when initial downloaders can easily jump ship to another app once March Madness begins. If we would have offered one lite version and one \$1 premium version, we would have benefited far greater from our early bird status. Those traversing the store in early March would have had only a few options and ours was one of the best for \$1 at that time.
2) The app upgrade isn’t an out right killer. This is no appzilla of March Madness. If you want a more complicated app that can cook you breakfast, then CBS has that covered (and they have licensing). CBS’s Freemium success hinged on the same initial motif that ours did: (a) have ads in the app to generate revenue and slightly annoy the customer, (b) offer premium features in the premium version (cbs streams live tournament games). Given our scale, I wouldn’t change that one bit.
Where CBS differed was in having two separate apps, not just one app where you could purchase an upgrade. This worked well for them as they were able to establish themselves as leaders in both the Free and Paid Sports categories. They probably also gained revenue from people who traverse only the Paid section and thought that their app looked snazzy without giving a second glance to the free section. These “blind buys” are eliminated when you only offer one app with an in-app upgrade.
Actually, I can’t think of any monetary or exposure advantage to having just one app. If I were to do this over again, I would definitely say that we needed two apps: one lite and one premium.
Advantages to having two apps (one lite and one premium):
Exposure (List) advantage: Since 80% of the apps that are purchased are free, most people who ended up purchasing the paid version of an app will have already purchased the free version. This gives you two list bumps. With an in-app upgrade, there is no list bump given when a downloader decides to purchase.
Monetary advantage: More exposure means more purchases. In addition, you will have curious customers who will purchase the app outright because they never traversed the Free section. In addition, you won’t loose any purchases when compared to an in-app upgrade model, because app owners who patrol the free section will have already seen your app.
2 Apps are better than 1. Having a Free and Paid app will give you more exposure and hence, more purchases.
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