When It Comes to Freemium, the User Isn’t Always Right

That first wave of media attention when you launch a startup is always a gratifying feeling for first-time iPhone and Android app developers. Even if it’s a struggle to keep up with on the software side, the tidal wave of data from a spike in downloads can offer enormous value.

As with every part of the startup story arc, however, there’s a flip side: differentiating between users who love your product but will never pay for it — and those who love your product and will pay to use it.

Separating monetized from non-monetized data is harder than you might think, especially since the standard approach to freemium mobile app pricing is purely a numbers game. iPhone and Android app developers alike approach the userbase as a single demographic, with a set percentage of that demographic making the jump to paid membership.

Unfortunately, the story isn’t so simple.

Tuning out the noise

When travel entrepreneur and NYC mobile app developer Gillian Morris launched her iPhone app Hitlist, media attention was overwhelmingly positive. Every day, she received glowing reviews and personal messages from excited users who loved the product.

But then she noticed a troubling trend: even users who enjoyed the app were churning at an unbelievable rate, and few of those who remained were actually booking flights through the interface — they were essentially window shoppers. Rather than invest in growing the user base, Morris’s team of iPhone app developers decided to overhaul the product to focus on the feature users had been least excited about: actually booking flights.

The update resulted in bad press and upset users who missed the Tinder-esque window shopping experience, but they immediately noticed a spike in the metrics that mattered to their business: recurring users and actual transactions.

The best users aren’t always the most vocal

If there’s one lesson for iPhone app developers to learn from this story, it’s that the most important users aren’t always the most vocal. Going viral can be great for business, but if the viral feature in your app doesn’t convert to paid users, it may not be worth the extra attention. iPhone app developers who concentrate their efforts on solving problems for paying customers virtually always find financial success — at least, in the long run.