By Zach Archer Jaguar Design Studio January 2013 Cave Lunch

1. 5 Tricks App-Makers Use
To Boost In-App Purchases

2. As we gear up for SilentGrowl
■ We have some ideas for services that would largely be
free to sign-up.
■ How do you make money with free services?
■ In-app purchases are largely used in social and gaming
apps.
■ Continue to generate revenue, rather than one large,
lump sum upfront.

3. 1. The Bait and Hook
The psychology here is simple. Lure in the customer with
an all-too-accessible free download. With that initial
barrier removed, developers then only need focus on
creating a fun and engaging gaming experience. After
those first few minutes (or hours) of use, it’s that much
easier to get the customer’s buy-in to spend a little
something to continue the experience. The desire to make
it to the next level can be almost addictive. A fully
invested customer will be more willing to pay to use.

4. 2. Make It Easy
Some of the most successful games are relatively simple - Angry
Birds is a perfect example. But even for the more complex
games, the early objective should be to make it as easy as
possible for customers to understand the rules of the game and
get started. According to veteran game developer Mike
Amerson, maker of the hits My Virtual Girlfriend and My
Virtual Boyfriend, this is a key strategy. "Make sure the initial
engagement isn't frustrating. Use techniques like tutorials and
tips, then allow the user to practice and gain a few wins before
she has to face any real challenges. Then as the game
progresses, it becomes harder to achieve those same results."
But by then, the customer is already invested.

5. 3. Timely Offerings
Only after the customer has downloaded
the app, has a good feel for it, and may
be feeling fairly confident in their ability
to win, is it time to drop the in-app
purchase suggestion. At key "choke
points" in the game, when the developer
knows the customer will need just the
right tool to obtain a higher level of
achievement, a friendly pop up alerts
players of the opportunity to make a
purchase that will keep the game
experience going. The UK’s Natural
Motion, makers of CSR Racing, have
mastered this strategy - and have $12
million in monthly in- app purchase
revenue to prove it. After working
through a few easy levels, it is nearly
impossible to win a race without making
upgrades or purchasing another car.

6. 4. Introduce New Items
Mobile game developer TinyCo is a
proven leader in this next strategy.
In its game Tiny Zoo Friends, where
kids manage a virtual zoo, the
company introduces new farm
animals for purchase every week.
One animal, "The Cash Cow" (not
sure if pun was intended or not),
cost one young fan nearly two
months' allowance. According to
TinyCo CEO Suly Ali, the revenue
from this character alone was in the
neighborhood of $50,000.

7. 5. For A Limited Time Only
Once customers become accustomed to making in-app purchases, developers
then introduce the limited-time-only scenario. Make the next purchase for
half off, or at a reduced rate, but only if you buy before the offer runs out.
Most shoppers will recognize this strategy from a wide variety of retail
environments - because it works. Imposing a time limit to a discount provokes
that buy-now-or-lose-out feeling of urgency. It’s the ultimate pay reward
system.

8. Conclusion
■ By some estimates, in-app purchasers spend on
average $14 per transaction, which is why freemium
has become the dominant means of monetizing apps.
■ For serious players, buying a game for $.99 up front is
almost always cheaper than a freemium model where
you'll need to ante up a lot more over time. Keep that
in mind the next time you download a “free” app.