How to Make Money from Your Software Product – Updated to 2023

by | Dec 15, 2014 | Monetization, Monetization News, Software

Software monetization guidelines aren’t designed to help you get rich quick, though that sometimes happens. These guidelines will help guide you toward a sustainable monetization strategy.

Though these guidelines are designed with software developers in mind, if you follow the essence of these guidelines, they can also be applied to mobile apps and even blogs.

The Real Picture

The reality is that software and apps probably aren’t a one-way ticket to financial freedom. It happens occasionally, but there’s a lot of competition out there. The vast majority of software revenue goes to a small percent of developers, and that will probably never change.

That being said, when you do things right, you can turn your software into passive revenue generators. If you launch your software effectively, it can continue to operate and earn income for you while you move on to your next project.

If at first you don’t succeed, don’t get discouraged – just read our blog.

Build Traffic

You need a marketing arm that includes a website, at least one social media account, paid advertising, and perhaps some affiliate marketing thrown in for good measure.

Traffic equals users, and the more users you

have the

easier it will be to monetize your software.

If you’re new to

software monetization

, then brace yourself for small

conversion

numbers. It takes lots of visitors to get only a few click-throughs and downloads.

Assume for the moment that you’re using advertising to power your software; you’ll need to know that an even smaller number of users will click-through any advertising.

Promote with Mobile

Ads power the internet, from Google and Bing to Facebook and Twitter. Ads help you build your traffic, brand awareness, and

audience

. These all build revenue.

When you promote with ads, you’ll want to find out where your audience spends their time. These days, most people spend their time on mobile devices. Soon, over half of all searches will be mobile.

This means you need to – at the very least – include mobile as one of your major advertising and marketing channels. Find out which network is appropriate for your target audience and use it. Additionally, your website should be responsive or adaptive so that users stick around to read about your product.

Mobile

spend

is increasing year over year, so even if you’re developing a desktop product, you’ll want to target mobile.

Analyze Traffic

How are you marketing your software? Through an app store, software directory, or pay-per-install programs?

Track the number of downloads your program gets. If you’re using a pay-per-install program, track your customer’s journey. Find out what they like and add more value to that.

The internet is chock-full of metrics, so you can track your customers through software directories, websites, app stores, pay-per-download networks, affiliate programs, advertising programs, and so on and so forth.

Focus on Optimization

The common wisdom tells you to “create value first,” but once you’ve got value, it’s all about the numbers. Analytics give you those numbers and tell you something more important: what users want.

The best way to earn loyalty is by selling users what they

want but

giving them what they need. A user may want to get rich quick, but what they need is a solid monetization plan, so you sell them a get-rich plan that works practically.

Don’t compromise your product’s value with poor advertising or over-optimization. Instead, realize that your numbers tell you how you can adjust and optimize your product to provide users with a more palatable product. You can still provide the same quality – just adjust the appearance so that your conversions increase, your customer base builds, and your revenue goes up.

Allocate Wisely

No one has infinite resources, so at a certain point, you’ve got to choose. Where do you put your money and time? Building traffic with advertising? Optimizing your current funnels? Improving the quality of your product?

The call can be tough to make, but if you must make a decision, choose

traffic

. You are always free to improve your product and your funnels later on, but if you’re not getting traffic, you’re not getting money.

This can be a tough decision to make, because many developers take pride in their work and don’t want to put out an inferior product. But without incoming traffic, you won’t have anyone to look at your software updates.

Allocate your resources in that order:

1. Traffic Building

2. Product Improvement

3. Funnel Improvement

Why does product improvement come second? Simple. Your product quality dictates how long your users will stick around. In other words, quality products

creates

quality customers.

Improving your funnel through analytics, funnel customization, advertising optimization, and marketing adjustments will help boost the numbers of your existing conversions.

But that only comes after you’ve got a valuable product and an engaged customer base.

What Are Software Monetization Models and How to Implement Them

by | Nov 20, 2014 | Monetization

Software <a ” target=”_blank” rel=”noopener noreferrer”>monetization has become a stumbling block to many software developers: the market is saturated with competition, there are many high quality programs available for free, and consumers are less and less inclined to pay for products they have never tried.

To keep up with the ever-changing landscape of online marketing, app developers and software publishers are turning to other monetization models that enable them to both compete and generate revenue. While most of these models operate using advertising or affiliate sales as their essential form of income generation, software monetization models take several forms.

Charging for the End Product

Charging end users for the final piece of software is one of the oldest software monetization models. It has worked since computers became mainstream, and it still works today. In this model, app developers and software publishers simply set a price for their product, and require users to pay for the product before using it.

This approach works well with developers and publishers who have a successful line of products or a recognizable brand. Charging for products can generate a great deal of income for the right product or publisher, but this method also has some drawbacks.

For unknown publishers, or publishers without a great deal of marketing resources, this approach can be quite difficult. As mentioned above, the software market is saturated with software that is free and cheap. Why pay for an app when you can find a similar one for free?

To succeed with this software monetization model, app developers often must have marketing resources, brand recognition, and/or unique product features that set them apart from the competition.

Free Trial with Advertisements

This model can work in conjunction with priced products. By offering users a free trial, publishers can give users either a partial or complete product that can still generate revenue through advertising. One common approach involves reserving certain features for the paid version of the product; another approach involves offering paid versions that come without advertisements.

In either case, this model offers both marketing and monetization benefits. By offering a product for free, users don’t experience the same hesitation over whether or not they should purchase a product. This can increase downloads and market share, while simultaneously putting a revenue-generating piece of software directly in the hands of the target audience.

On the downside, however, a free trial or ad-supported version may not end up generating as much income as a paid app or program. Users have become so desensitized to advertisements that, when done incorrectly, ads can go unnoticed. And users who are satisfied with the features offered by a trial version may never end up paying for the final version.

This model works better with certain types of applications. Games, for example, often work well by hooking the player for free and then requiring payment if people wish to continue playing.

Pay-Per-Install

Pay-per-install (PPI) software monetization models are an excellent way for developers or publishers to generate revenue, reach larger audiences, and partner with other industry leaders. It works by promoting advertisers’ products during the installation process.

Instead of advertising inside an application or offering a partial product such as a free trial, app developers can use this model if they wish to distribute complete products. This can improve the user experience while still generating revenue for the developer. Free software programs can also increase the total number of downloads, which can increase the market share.

Bundling

Bundling refers to packaging multiple programs, tools, or applications together into one suite. Add-ons, application extensions, and plugins are good examples of products that may benefit from bundling. Developers who have developed complete programs or products can also enhance their offer by bundling their products together with those belonging to a third party.

This software monetization model helps increase market exposure by pooling multiple audiences. And if the publishers charge for the final product, the developers and publishers can share the revenue.

Software bundling is an excellent method for developers who have designed tools that work well with other applications. Bundles often offer a higher value to the end user, so end users may be more likely to pay for the final product.

Advertising In Apps

In-app advertising has become one of the most common software monetization models. Developers competing in an oversaturated app space will often choose to offer products for free, but include advertising inside the app to generate revenue.

This can be beneficial from a marketing perspective, since users are more likely to download free apps than paid apps. And in-app advertising does offer a sustainable method of monetizing programs.

Some advertisements, such as tacky display ads, often go ignored, due to “banner blindness.” Done correctly, though, in-app ads can be contextualized and integrated as a seamless part of the app experience.

There are quite a few software monetization models, ranging from a priced end product to advertising-powered approaches. Regardless of which method developers and publishers choose, offering value to the end user will always be the most sustainable long-term monetization model. A successful software monetization strategy is one that offers value and integrates well with the user experience.