40 Secrets to Making Money with In-App Purchases

Making money with in-app purchases boils down to one question – why do we buy things?

I’ll give you a hint – it’s mostly about satisfying emotional and psychological needs. If you can understand how people think, you’ve got a leg up in your app – and that’s what this article is all about!

In this article, I’ll cover 40 secrets that you can start using right away to make more money in your apps with in-app purchases. Here’s a few of the techniques you’ll learn:

• How to use the decoy effect to anchor pricing
• How to associate positive feelings to your store
• How to optimize your game for “whales”
• And over 37 more tips!

Are you ready to start monetizing like the pros? Then let’s dive straight in!

1. Provide Incremental Difficulty

Let’s start with the basics – it’s important to ease the user in to your app.

Think about it – would you want to spend money in a game that you’re unfamiliar with? Probably not!

This strategy works best if your game meets the following requirement: the user should be able to fully experience your app with very few constraints. By doing this, you achieve two things:

1. You raise the average user session time; that is, the length of time that people spend playing your game.
2. You raise the likelihood that whales — that is, people who are more likely to spend a large amount of money in your game — will buy expensive items as they progress in the game.

People that don’t want to spend money in your game will spend copious amounts of time to try and master it on skill alone. As users spend time in your game, you can take advantage of complementary revenue streams, such as ads, Tapjoy integration, SponsorPay, or other passive monetization methods.

You can see this strategy in use in Contract Killer Zombies 2 below:

As you progress through the game, new levels with increasing difficulty are added to the map. The more difficult the level is, the more likely it is that a user will either take extra time to beat the levels without making use of IAP, or spend money for enhanced weapons to beat the big bosses!

2. Offer Unlockable Chapters

Offering additional “bonus” material that is only accessible to people who have purchased paid content can encourage players to make use of your IAP. Sniper Shooter uses this strategy below:

In this game, you need to buy a certain sniper rifle with particular characteristics to be granted access to new chapters in the game. You can either buy virtual currency with real world money, or earn virtual currency by completing tricky sub-missions in previous chapters.

3. Provide Samples of Your IAP Content

Would you spend money for an item if you don’t know how useful it might be?

Give your users a taste of some — or all! — of your IAP contents, both consumable and non-replenishable. For example, if users are able to use consumable power-ups in your game from the get-go, they’ll be more likely to buy more when they run out!

Fruit Ninja makes use of this strategy below:

Initially, you have three free Bomb Deflects at your disposal. By the time you’ve finished only a few levels, you are aware of how useful they are — and you’re more likely to buy some Bomb Deflects later on for the harder levels!

4. Make the Player Earn Your IAP Content

This strategy is used skillfully in the phenomenally successful Candy Crush Saga. The technique or earning IAP is based on the concept that users should unlock successive IAP content as they progress in the game:

This strategy provides several benefits:

• Increased focus on the IAP content of your app
• Increased perceived value of your IAP content
• Decreased annoyance to users who aren’t interested in your paid content

5. Get the Player Hooked!

This is a tip from of a friend of mine: Magnus Söderberg, CEO of Triolith Entertainment.

Triple Town is a great example of a game that lures in users with addictive gameplay, and offers users a paid option to improve their gaming experience.

Triple Town is a strategic-puzzle game with a limited number of moves per gaming session. When a player’s moves are exhausted, they need to wait for the renewal period in order to continue playing.

However, for players who can’t bear to wait, the app offers an IAP in the form of “unlimited turns” non-replenishable content. Basically, a hook has an affordable price and makes the player’s gaming experience far better by removing constraints, or providing a really cool power up.

6. Offer a “Save Me” Option

When people are in the middle of some serious gaming action and are in danger of dying, nearing the point of losing the game, or facing some other undesirable outcome, you can provide them with a “save me” IAP. This type of content allows the user to keep playing without losing their current score or their current game progress.

In games where players battle for leaderboard status, this can be an excellent opportunity to monetize your app as it relies on snap decisions made by the player in the heat of battle.

Endless running games are the most suitable kind of app for this strategy. Some notable places where you can find this strategy in use are apps like Subway Surfers and Temple Run.

7. Leverage People’s Curiosity

This tip comes from Trey Smith, a marketing genius in his own right. You can check out some of his smart ideas in Trey Smith – Live at App Empire 2012.

You need to leverage your player’s curiosity and make them eager to unlock your IAP content. Extreme Road Trip 2 is a great example of a game that does this very well. You can blur or hide the content until it is unlocked — this raises the player’s desire to see what’s behind the curtain, so to speak!

8. Make Use of the “Decoy Effect”

Let’s try a little experiment. You’re in a cinema with your significant other, planning to watch “Django Unchained” and you know the rule — all date movies MUST be accompanied by popcorn.

You approach the counter and take a look at the following menu of popcorn sizes:

Which one would you choose, and why? The spoiler below shows what most people will choose in this scenario.

[spoiler title=”Decoy Effect A”]If you chose the large packet, you fell victim to the “decoy effect” — either that, or you’re on a diet! :]

74% of people will choose the large size. Usually no one chooses the medium size, so you can assume that about 26% of people will choose the small size.

[/spoiler]

I’ll bet you chose the large size, since it looks like a much better value than the medium — it’s only 50 cents more. What a deal!

Now, pretend that you had been faced with the following menu:

Which size popcorn would you choose now? Have a look at the spoiler below to see what most people would choose:

[spoiler title=”No Decoy Effect”]

In this scenario, 87% of people will choose the small size. That’s a huge difference! [/spoiler]

In an average theater of 100 people, here’s how the popcorn sales would differ between the two scenarios:

Scenario A: No Decoy Effect — $7.00 * 13 people + $3.00 * 87 people = $352.00

Scenario B: Decoy Effect — $7.00 * 74 people + $3.00 * 26 people = $596.00

Just by adding the decoy medium size, the theatre earned an extra $244. Not too shabby!

The decoy effect is usually structured with three items with one of them acting as the decoy. The item you wish to drive people to must look like a terrific bargain.