What Pricing Strategy Should Your App Use to Stay Competitive?

You've built what you think is a brilliant app. The functionality works perfectly, the design looks polished, and early testers love it. But then comes the question that keeps many app developers up at night—how much should you actually charge for it? Price it too high and nobody downloads it; price it too low and you can't cover your costs, let alone make a profit. Getting your app pricing strategy wrong can kill even the best mobile apps before they have a chance to succeed.

I've watched countless talented developers struggle with this exact problem over the years. They'll spend months perfecting their app's features but then slap on a random price at the last minute without any real strategy behind it. Some think charging more makes their app look premium, whilst others believe free is the only way to compete. The truth? There's no one-size-fits-all answer, but there are proven frameworks that work.

The biggest mistake I see developers make is treating pricing as an afterthought rather than a core part of their product strategy from day one

Your app pricing strategy isn't just about picking a number—it's about understanding your market, your competition, and most importantly, the value you're providing to users. Whether you go with a freemium model, subscription pricing, or one-time purchase, each approach has its place depending on your app type and target audience. The mobile app monetisation landscape has changed dramatically, and what worked five years ago might leave you struggling to stay competitive today. But here's the thing—once you understand the core principles behind each pricing model, you can make informed decisions that give your app the best chance of success.

Understanding Your App's Value Proposition

Right, let's talk about something that sounds fancy but is actually dead simple—your app's value proposition. I mean, it's just answering one question: why should someone choose your app over the hundreds of others doing similar things? And honestly, if you cant answer that in a sentence or two, youve got a problem.

I've seen too many apps that do everything but stand for nothing. They're technically sound, they look decent, but there's no compelling reason for users to stick around. Your value proposition isn't about listing every feature you've built—it's about identifying the one thing that makes your app genuinely useful in someone's life.

What Makes Your App Different?

Here's what I ask every client: what's the specific problem your app solves better than anyone else? Not different problems, not more problems—the same problem, but better. Maybe your fitness app doesn't just track workouts; it adapts to your energy levels throughout the day. Maybe your budgeting app doesn't just categorise spending—it predicts when you'll overspend before it happens.

The strongest value propositions I've worked with usually fall into these categories:

• Saves significant time on something people do regularly
• Makes a complex process much simpler
• Provides unique insights or information
• Connects people in ways they couldn't before
• Automates something that's currently manual and annoying

Once you've nailed down your core value, everything else becomes clearer—including your pricing strategy. Because pricing isn't just about covering costs or making profit; its about reflecting the value you're actually delivering to users. Get that right, and the rest follows naturally.

Free vs Paid: Making the Right Choice

Right, let's tackle the big question that keeps app developers up at night—should your app be free or paid? I've watched countless clients wrestle with this decision, and honestly, there's no one-size-fits-all answer. But here's what I've learned after building apps across every pricing model you can think of.

Free apps dominate the download charts for obvious reasons. People love getting something for nothing, and the barrier to entry is practically zero. When someone sees your app in the store, they can tap download without a second thought. But here's the thing—free doesn't mean you're not making money. It just means you're making it differently.

Paid apps, on the other hand, face a much tougher battle. You're asking people to pay upfront for something they haven't tried yet. That's a big ask in today's market where users expect to test drive everything first. However, paid apps do have one massive advantage—every download represents genuine interest and immediate revenue.

When Free Makes Sense

Choose free when you're building for mass market appeal or when your app benefits from network effects. Social apps, productivity tools, and anything that gets better with more users should typically start free. I've seen gaming apps absolutely crush it with this approach—they hook users with free gameplay, then monetise through ads or in-app purchases.

Test your pricing strategy with a small focus group before launch. Their honest feedback about willingness to pay can save you from making expensive assumptions about your market.

When Paid Works Better

Premium pricing works brilliantly for professional tools, specialist applications, or apps targeting business users. If your app saves people time or money in a measurable way, they'll happily pay for it upfront. I've built several B2B apps where the monthly subscription cost gets approved without question because the value proposition is crystal clear.

• Free apps need large user bases to generate meaningful revenue
• Paid apps can be profitable with smaller, more engaged audiences
• Free apps require ongoing content or feature updates to maintain engagement
• Paid apps face higher expectations for quality and customer support
• Free apps can pivot their monetisation strategy more easily

The reality is that most successful apps today use hybrid approaches. They might start free to build an audience, then introduce premium features or remove limitations through paid upgrades. Your initial pricing choice isn't permanent—but it does set expectations that can be tricky to change later.

The Freemium Model Breakdown

Right, let's talk about freemium—probably the most misunderstood pricing model in the app world. I've seen so many clients get this wrong it's genuinely painful. They think freemium means "give everything away for free and hope people pay later." That's not freemium, that's just free!

The freemium model works when you offer real value in your free version but create genuine limitations that make users want to upgrade. Think Spotify—you get full access to music but with ads and no offline listening. The free version is genuinely useful, but the paid version solves real frustrations.

Here's where most apps mess up: they make the free version so limited its basically useless, or so complete that nobody needs to upgrade. You need to find that sweet spot where users can accomplish their main goal but hit meaningful friction points that paid features resolve.

Finding Your Freemium Balance

I always tell clients to identify their app's core value first. What's the one thing users absolutely need to do? Make sure your free version delivers that experience completely. Then look at the convenience features, advanced tools, or premium content that would make the experience better—not just different, but genuinely better.

The conversion rates from free to paid are typically quite low, around 2-5% for most apps. This means you need a large user base to make freemium work financially. If you're targeting a niche market with limited users, freemium might not be your best choice; you'd be better off with a straightforward paid model where every download generates revenue immediately.

Subscription Pricing That Works

Right, let's talk about subscription pricing—honestly, this is where I see the most confusion from clients. Everyone wants that sweet recurring revenue (and I don't blame them), but getting your subscription model right requires some proper thinking about user psychology and value delivery.

The biggest mistake? Trying to force users into subscriptions too early. I've seen apps lose thousands of potential subscribers because they threw up a paywall before users even understood the value they were getting. You need to let people experience your app first, get them hooked on the benefits, then present the subscription as the natural next step.

Finding Your Sweet Spot

Your subscription price needs to feel reasonable compared to what users are already spending. If you're a fitness app, think about gym memberships or personal training sessions. A productivity app? Compare yourself to other business tools they might be using. I usually recommend starting with a price that feels slightly lower than what you think you can charge—it's much easier to increase prices for new users than to win back ones who bounced because of sticker shock.

The most successful subscription apps don't just charge for features; they charge for ongoing value that gets better over time.

Free trials work brilliantly, but here's the thing—make them long enough for users to build genuine habits with your app. Seven days might not be enough for someone to integrate your meditation app into their routine, but 14 or 30 days probably will be. And please, make cancellation dead simple; nothing destroys trust like making it hard for people to leave. The confident approach always wins in the long run.

In-App Purchases and Microtransactions

Right, let's talk about in-app purchases—or IAPs as we call them in the business. This is where things get really interesting from a revenue perspective, but also where you can seriously mess up your user experience if you're not careful.

I've worked on apps that make millions from IAPs and others that barely cover their server costs. The difference? Understanding what your users actually want to buy and when they want to buy it. It's not about squeezing every penny out of people—that approach backfires spectacularly. Trust me, I've seen the one-star reviews!

The key is making your IAPs feel valuable rather than necessary. Users should think "I want this because it'll make my experience better" not "bloody hell, I need this just to use the app properly." There's a massive difference between those two feelings, and it shows in your retention rates.

Types That Actually Work

From my experience, consumable purchases work best for utility apps—think extra storage, premium filters, or advanced features. Non-consumable purchases are perfect for removing ads or unlocking premium content permanently. But here's what most people get wrong: timing.

• Wait until users are genuinely engaged before showing purchase options
• Make the free version genuinely useful—not a glorified demo
• Price your IAPs based on the value they provide, not what you think people will pay
• Test different price points—you'd be surprised how a £0.99 vs £1.49 change affects conversion

The apps that nail IAPs understand their users' journey. They know exactly when someone's most likely to make a purchase and what features they value most. It's data-driven, not guesswork—and that's what separates successful apps from the ones that struggle to monetise.

Competitive Analysis and Market Research

Right, let's talk about something that honestly makes or breaks your app pricing strategy—knowing what everyone else is doing. I mean, you can have the most brilliant app in the world, but if you're charging £20 for something your competitor offers for free, you're going to have a problem. It's not rocket science, but you'd be surprised how many people skip this step.

When I'm researching the competition for clients, I don't just look at the obvious players. Sure, check out the top apps in your category, but also look at the ones sitting just outside the top 50. These apps are often trying different pricing approaches to break through—and some of their strategies might work perfectly for you. Download them, use them, see what they're doing right and wrong.

Create a simple spreadsheet with your competitors' names, pricing models, key features, and user ratings. Update it monthly because pricing changes fast in the mobile world.

What to Look For

Here's what I focus on when doing competitive analysis. First, the obvious stuff—what are they charging and what do users get for that money? But then dig deeper. Look at their App Store reviews and see what people are saying about value for money. Are users complaining about hidden costs? Are they praising certain features? This feedback is pure gold.

Check out their marketing copy too. How are they positioning their pricing? Are they emphasising value, convenience, or exclusivity? The language they use tells you a lot about their target market and pricing psychology.

Market Research Beyond Competitors

Don't forget to look at adjacent markets. If you're building a fitness app, look at what gym memberships cost in your area. If it's a productivity app, research what business software charges monthly. Users always compare app prices to other things they spend money on.

The market research phase isn't just about copying what works—it's about finding gaps where your pricing strategy can stand out. Maybe everyone's using freemium but users are frustrated with limitations. Maybe subscription fatigue is real and people would pay more upfront. The data will tell you where the opportunities are hiding.

Testing and Adjusting Your Pricing

Right, here's where things get interesting—and honestly, a bit nerve-wracking for most app owners. You've set your prices, launched your app, and now you need to see what actually works in the real world. Spoiler alert: your first pricing attempt probably won't be perfect, and that's completely normal.

I always tell clients that pricing is more like a science experiment than a one-time decision. You form a hypothesis (this price will work), test it with real users, gather data, and adjust accordingly. The key is being systematic about it rather than just guessing or panicking when things don't go as expected.

Key Metrics to Watch

When testing your pricing, you need to track the right numbers. Sure, total downloads look nice, but they don't pay the bills. Focus on conversion rates from free to paid users, average revenue per user, and—this is big—churn rates. If people are subscribing but cancelling within days, your pricing might not match the value they're experiencing.

One client had a meditation app priced at £9.99 monthly. Downloads were decent, but conversions were terrible. We tested dropping it to £4.99 and saw conversions triple. The lower price actually brought in more total revenue because more people were willing to try it.

Making Smart Adjustments

Don't change everything at once—you'll never know what worked and what didn't. Test one variable at a time: price points, trial lengths, or feature tiers. A/B testing is your friend here, though you need enough users to get meaningful results.

• Test price changes gradually (don't jump from £2.99 to £9.99)
• Consider seasonal adjustments for different markets
• Monitor competitor pricing shifts regularly
• Give each test enough time to gather solid data
• Keep detailed records of what you tried and when

Remember, pricing isn't set in stone. The most successful apps I've worked on adjust their pricing strategy at least twice in their first year based on real user behaviour and market feedback. Having the right technical infrastructure to track this data effectively makes all the difference.

Conclusion

Getting your app pricing strategy right isn't something you do once and forget about—it's an ongoing process that needs constant attention. I've seen too many brilliant apps fail simply because their pricing didn't match what users were willing to pay, or worse, because they never bothered to test different approaches.

The mobile app marketplace is ruthless these days. Users have endless options at their fingertips, and if your pricing feels off—too expensive, too complicated, or just doesn't deliver the value they expect—they'll move on without a second thought. But here's the thing: when you get it right, pricing becomes one of your biggest competitive advantages.

Throughout this guide, we've covered the main approaches to mobile app monetisation; from freemium models that can scale massively to subscription pricing that builds recurring revenue. We've looked at how competitive analysis can inform your decisions and why testing different price points is absolutely critical. The key takeaway? There's no one-size-fits-all solution.

Your app's pricing strategy should reflect your unique value proposition, your target audience, and your business goals. A productivity app for busy professionals might thrive with a premium subscription model, while a gaming app could generate more revenue through carefully designed in-app purchases. The best strategy is the one that works for your specific situation.

Start with one approach, measure everything, and be prepared to adapt. The apps that succeed long-term are the ones that listen to their users and adjust their pricing accordingly. Your first pricing strategy probably won't be your last—and that's perfectly fine.