Why in-app purchases are very important and how do implement them correctly?

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Monetization is one of the important factors to consider when developing mobile apps. The ultimate goal of every developer or app owner is to generate revenue out of their app. there are many ways to monetize your mobile app. However, the most popular revenue is the in-app purchase. In a research, it was found that the total global revenue from in-app purchase in the year 2017 was $37 billion. This shows that the in-app purchase is dominating the app industry and one should focus on in-app purchases in one’s app.


What are in-app purchases?

We often hear about the in-app purchase. However, many of us are not much familiar with it. Well, in-app purchase refers to the ability of smartphones to facilitate the sale of a product or service. Users will be able to purchase goods and services through the app directly.  This feature allows developers to provide their app for free. However, when the user purchases virtual goods through the app or upgrades the app to a newer version, in-app purchase occurs.


Users make the in-app purchase to access special features such as power-ups, boosts, special characters, access restricted levels etc. There are different types of in-app purchase. They can be applied to free as the well as premium apps. The StoreKit framework connects to the app store and processes the payments securely. The purchased product is delivered to the user when the framework notifies the app.


Why is it essential to focus on in-app purchase?

In a recent survey, it was found that mobile app users spend 26% more on in-app purchase compared to direct payment. In-app billing enables app developers to sell digital good and services from within the app. Developers can show the users what their products are capable of by making some features free. When people involve in an app extremely, they tend to buy credits. Some of the benefits of in-app purchases are as below:


  • In-app purchases are an additional income stream for app developers. The most common use of in-app purchase is adding additional content to the existing content. The gross effect is that the app maker doesn’t have to release a brand to add new levels.


  • Users can unlock and gain access to additional features of the app via in-app purchase. Whether it is the ability to backup data or push notifications, blocking advertisements in-app purchases can remove annoyances.


  • In-app products can be consumable as well as non-consumable. Consumable products can be bought multiple times, while non-consumable products remain with the customers, as long as they are associated with Play Store. The user will get constantly benefitted from premium updates and level packs via in-app purchase. Offer consumables in in-app purchases in such a way that they fit your app. It has a great power to compel your users to take actions through the mobile app.


The rise of in-app purchase has created more opportunities for app developers – as they can generate substantial revenue from their work. Moreover, they will focus more on developing quality apps with premium features.


How to convince customers to make the in-app purchase?

In-app purchases have a potential to transform your bottom line. There are lots of ways to introduce in-app purchase in your app without irritating existing users. Remember that introducing in-app purchase to your app can impact the existing users negatively and lead them to uninstall your app. Here are some tips to convince your customers to make the in-app purchase and at the same time keep them happy.


  • Target engaged users

Remember that not every user will find your app beneficial. Though you have the temptation to pepper your app with upgrades and conversion funnels, it may interrupt users who are not engaged and may cause them to leave your app. You should work out on which users are likely to get benefit from upgrading and send notifications to only those users.


If your app has a series of quick tasks, keep an eye on the duration. App developers should also consider the duration, when they drop in in-app purchase prompts and conversion funnels. Don’t make the user feel annoyed by sending multiple IAP prompts or asking him/her to perform multiple levels.


  • Check different price points

When it comes to in-app purchase, pricing can be a bit tricky. The app users will give feedback in different channels to help you work out on improving your pricing model. You need not ship a new version to change the pricing. Learn a bit about creating a solid pricing strategy. If you have recently launched the app, don’t ask the user to upgrade it too early. Allow the users to enjoy your app before you ask more.


Don’t copy the pricing strategy of your competitor. Users tend to check multiple apps, before installing. Following the same pricing as the competitor will leave a negative impact on the users.


How to convince customers to make in-app purchases


  • Target individual customers

User data helps you understand the right audience. If you don’t have an idea of what your customers want from your app, you will not be able to sell them anything. It is important to know the steps that drive your users to in-app purchase. You can monitor the customer’s journey to identify the places where your customer is likely to make a decision.


Once you have identified potential customers, use personalization to make the campaigns relevant to the user and increase conversions. This is one of the best and effective ways to encourage users who have never spent on your app.


  • Offer incentives

Rewards and incentives often attract users. Whenever a new user downloads your app and spends money without any influence, offer a discount of incentive. However, you will see better results – if the promotion speaks to the actual interest of the customer. There are plenty of apps that primarily targets in-app purchase,while there are some apps with in-app purchase as the secondary monetization strategy.


Though in-app purchase is their secondary monetization strategy, these apps earn good revenue.  App marketers must be thoughtful about how they balance different monetization strategies and attract users.



Having a place solely for in-app purchases is the best way to make users happy. However, make sure that it is easy to use and visually appealing. Experiment with different layouts and formations so that users get attracted to your app. Create stunning visuals and icons to display inside your in-app store to appeal your users. The icons don’t have to resemble with other features of the app. However, the user should know what to expect and he/she should not feel cheated with what they received.


It is always believed that the purchases that are priced between $0.99 and $2.99 generate the highest revenue, as the users consider them cheap.  You can have a lot of users buy cheap purchases. However, you are likely to make more money from the expensive in-app purchase.


The bottom line is that in-app purchases can be a great source of revenue. If you need to make the most out of the in-app purchases create appealing features that complement your app. Always keep an eye on top rated apps and examine their in-app purchase strategy. You can apply the best strategy to maximize your mobile app revenue.

Ready to Take the Next Step?


Gagandeep Sethi

Project Manager

With an ability to learn and apply, passion for coding and development, Gagandeep Sethi has made his way from a trainee to Tech Lead at Promatics. He stands at the forefront of the fatest moving technology industry trend: hybrid mobility solutions. He has good understanding of analyzing technical needs of clients and proposing the best solutions. Having demonstrated experience in building hybroid apps using Phonegap and Ionic, his work is well appreciated by his clients. Gagandeep holds master’s degree in Computer Application. When he is not at work, he loves to listen to music and hang out with friends.

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