Our company’s app business is divided into two major parts: our History apps (which we sell primarily to schools), and our Formulas & Accounting apps (which generally sell to individuals and small business.) This post is devoted the challenges of the later. The school market has its own challenges. However, in the school channel, it is more clear where to locate the customers, and in many cases the purchases are for multiple copies. As a result, the school market possesses different obstacles from the challenge that I am about to write about.
The fundamental and chief challenge of marketing apps is a result of their price. For reasons that will no doubt provide fodder for business school studies in the future, expectations developed early in the existence of Apple’s App store that apps must be inexpensive. The prices of the majority of apps range between $1 and $2, when they are not free. Our apps have, by and large, been more expensive $3–$10 (with a few professional apps selling for somewhat more.) In the first two years of the Apps store our sales continued to grow. During that time, we found that 80% of our sales originated from customer searches on the App store. However, sales of all of our individual apps dropped precipitously after iOS 6 was introduced, and the ability to find apps on the App store radically decreased– as a result of the new, ‘improved’ design. Several of the changes Apple instituted in iOS 6 made discovering a new app considerably more difficult. (However, I will leave that topic for a different discussion.) Our central challenge, as a company, is how to promote our apps outside of the App store. That is where we have found the economics (i.e. achieving a reasonable r.o.i.) problematic, at best.
How do you effectively promote an app whose price is $4? How much can you pay to acquire a customer whose economic value is $3– and where (unlike other areas of the software business) there is no way to offer paid upgrades in the future. Over the past few years we have tried many different ways of reaching out to potential customers. We place Google AdWords– (though when the CTR cost is 80 cents, you need an unbelievably high conversion rate to make it worthwhile.) We also have used some lesser-known search marketing companies– such as 7 Search (their CTR is .05 cents, but the value of those clicks has always been suspect.) We have utilized a variety of PR opportunities over the years (including, though not limited to a service called PR Mac, as well as a PR agent who did custom work on our behalf.) Though getting PR has become much more difficult over the years, as the number of apps on the market have soared. Our first iPhone/iPad app, which came out in 2008, was featured in Business Week. Our most recent press release, announcing our newest Quotes and Billing app failed to generate any interest at all– despite the fact that (in our humble opinion– and customer reviews state repeatedly that) it is really a superior app.
We have always been a digital history company. That core business remains and our school app channel continues to grow. On the other hand, we are not ready to walk away from the other part of our company. So, we are looking for innovative ideas on how to promote it. Any and all suggestions are welcome!