If you are planning on building an app for your business, you must estimate what the app’s setup fee and user acquisition costs will be. To help you figure out those two different expenses, this article is going to look at each one.
Cost to develop your app
The range of possible costs for building an app is quite wide and the exact number depends on various factors.
Generally speaking, the expense for creating apps that require a large number of features will reach the higher end of the range while the cost to build an app with fewer features will be more towards the lower end.
Besides the number of features, other factors that affect the setup fee include:
- The type of app you are building. Will it be a game? A lifestyle app?
- The platform the app is designed for. The most common options are iOS and Android platforms.
- The complexity of its design. Will it be basic or customized?
- How many pages the app contains.
- The decision between hiring a developer and designer or doing all the work yourself.
- The decision to make a native app or a hybrid app. The latter option is typically cheaper.
- How much data the app will need in order to operate.
- If the app will need to access device cameras or other functions.
You need to consider each of these aspects when budgeting for your app’s development and design costs.
Cost to acquire new users
After spending money to create your app, you will likely need to invest even more funds into acquiring new users.
There are various methods you could use to attract users, such as app store optimization (ASO), paid ads, establishing a social media presence, creating a great website, implementing a content marketing strategy, and more.
However, no matter what tactics you try, you will need to track the cost per install (CPI) metric. This will tell you how much you are spending in order to acquire each new user.
Here is the cost per app install formula:
Total Amount Spent on Advertising/Total Installs = CPI
Just as you have to budget for the setup fee, you will also have to predict your app’s CPI so that you can allocate enough money to mobile marketing. This will require estimating the app install rate and marketing costs.
Acquisition companies provide statistics that will help you get an idea of what your app’s CPI will be. After your app has gained users you can look at its actual CPI in order to budget more accurately for future marketing efforts.
Paid ads are an effective user acquisition strategy. There are various types of campaigns you could set up, such as cost per click or cost per engagement. But we are going to look at CPI campaigns.
First, you must find an ad network or publisher to work with. Once you’ve teamed up, your ads will appear in other apps or on mobile websites.
As with any paid advertising campaign, you must pay the network or publisher each time the desired outcome has been achieved. In this case, you will be charged whenever a user installs your app as a direct result of seeing its ad.
This charge will either be a fixed-rate or a bid amount. Rates will differ between various ad networks and publishers.
So remember, you shouldn’t start developing your app until you have estimated its setup fee. Then once your app is ready for launch, you should estimate its CPI. When you know what these expenses are likely to be, you can make room in your budget for them.
But no matter how much you invest, acquiring new users is no easy task. If you need help increasing your app’s user acquisition rate, get in touch with a mobile specialist today!