What is the best way to figure out your revenue model for a mobile app that's service related?

I have a healthcare app that has started out as a membership model (saas). However, it this is going to be very challenging based on the current business model, the audience and CAC. I am trying to figure out a more viable model and seeking an expert in this area or any advice.


To answer your question directly, the best way to figure our the optimal revenue model is by doing exactly what you're doing right now: evaluate the trends, challenges in the market and calculate how much it costs to build your user base relative to the revenue (potential) they bring in. Commonly if your CAC is out of alignment people start by focusing on the tactics through which they acquire (which to be fair is only natural.) I though like to start on the custom side and work my way backwards. Are you targeting the "right" customers relative to your opportunity in the market. Start by focusing on this question first and making sure you're targeting the right market for your app/service. Next, I would see if you can fractionalize that market further down into a more specific/narrow subset of potential customers. This should allow you to maximize what you are producing in terms of revenue potential and also cut down on the acquisition costs side since you can focus your nozzle more directly towards the target. The bottom line is dont overlook an opportunity to make sure your target market is clearly defined and confirmed/validated. And dont be afraid to question potential false-positives (i.e. just because someone will buy your service doesn't make them necessarily the ideal customer.) try to create multiple layers and variables of filtering that help you make sure you've got the right group of people in your sights.

Answered 6 years ago

As I continue to study the mobile app market I have noticed that the "freemium" model is best and most popular. By definition:

Freemium is a pricing strategy by which a product or service (typically a digital offering or an application such as software, media, games or web services) is provided free of charge, but money (premium) is charged for additional features, services, or virtual (online) or physical (offline) goods.

When you begin building out your app create features that can only be use as a paid add on. Many marketers call this the "hook and bait" but I hate that term. I look at it as given people the opportunity to experience your app if they like it enough they will be incline to get more of an experience by paying for it and rightfully so.

If you want to go over some other idea I'd love to chat on a free conference call:

Either way wish you the best!

-Mario Ashley, MBA

Answered 6 years ago

You need to figure out the value proposition for the customer segment you will be serving.

1. So the first thing you are going to do is figure out what problem your app solves for your ideal customer segment.
2. You then need to create and understanding of what activities will be involved for you to provide that value(ex. development of the app or create partnerships with "X").
3. Then you need to study your market
4. Once you have a understanding of the above you can begin to formulate pricing strategies with your segments in mind.

Also, keep in mind this is really important for you, so will the marketing expenditure and the branding, look up churn rates on apps in the first 3 months.

Call me if you need help.

Answered 6 years ago

Match your revenue model to the way it delivers value to your customers.
If you are struggling with a SaaS model it might be because you are not providing recurring monthly incremental value that can be justified on a monthly recurring payment.
Depends on what value you are giving to your customers and the experience they are having with your product is the best way to think of how to charge for it

Answered 6 years ago

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