Learn 40 battle-proven secrets that will help you earn more money with in-app purchases in your apps!

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:

You raise the average user session time; that is, the length of time that people spend playing your game. 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.

9. Offer an Immersive Experience

Here’s a neat little trick that’s incredibly effective, but only takes two seconds to implement.

Have you ever played in the casinos in Las Vegas or Monaco? Look around — you won’t find any clocks, which dulls peoples’ perception of time and entices them to stay and gamble more.

Removing the status bar from your game will increase the average time per gaming session. The more time people spend in your app, the more opportunity you have to convince them to make a purchase.

10. Provide a “Remove Ads” Option

Although it seems like everyone and their dog uses this strategy, don’t underestimate it! It’s incredibly simple, but many users really want to enjoy your app without the distraction of ads.

As an experiment, head to the App Store and scroll through the reviews of apps that don’t offer this feature. You’ll be surprised at how many people request this functionality when it isn’t available to them!

11. If in Doubt, Go With Consumables

Recent research from Flurry — a provider of mobile analytics services and ad networks — indicates that out of all of the possible IAP models, consumables are generally bigger revenue generators compared to other types of contents.

The infographic from Flurry below shows the breakdown of the various IAP models and how they stack up against each other:

If you only choose to use one strategy to monetize your app, pick consumable items. It’s your best bet in terms of conversion rates and perceived value.

11. Give Your Players the Statistics They Love

Gamers love the nitty-gritty details on how stack up against other players in the game. Give your users the option of an IAP that provides them the ability to see how they measure up against other players around the world!

Ruzzle is a great example of an app that offers this option through an IAP:

13. Treat Time as Priceless

Most people perceive time as a really precious gift — and gamers are no exception. People are generally an impatient lot, and they want to satisfy their needs as soon as possible.

Mobile games are an extreme case of how valuable time can be. A huge portion of mobile gaming happens while users are spending time waiting in situations where at any moment they might have to end their game.

Gamers want to squeeze the maximum amount of gameplay out of every session. You can capitalize on this by selling them the gift of time.

If you browse the App Store you will find many games that implement this strategy in very effective ways. Clash of Clans is an extremely successful game which has a monetization strategy based mainly on this approach.

Clash of Clans allows you to speed up construction activities or army building by spending the game’s virtual currency. It’s an incredibly successful strategy, but you can take it a step further and gather some metrics around what encourages people to trade money for time.

A great way to measure and adjust the effectiveness of your IAP strategy is to setup a server where you can monitor and change the length of the timed events in your game. In this manner, you can tweak the timings to find the best combination between event duration and IAP content sold!

14. Bundle Your IAP Content

If you have a stock of game items that could be linked and sold together as a group, do it! People love to buy in quantity — just take a look at the crowds at Sam’s Club on any given Saturday.

Draw Something does this rather well by offering color and color theme groups for their app, as shows in the screenshot below:

15. Help Users to Feel Good

People form strong associations between emotions and experiences they’ve had when visiting places. Your app is no exception to this rule. You can use a simple strategy to help your users associate a warm, fuzzy feeling with your app.

On first launch of your game, lead people to your store and give them a gift just for visiting. They’ll recognize your kind gesture and associate your store with feeling good. Users who associate pleasant feelings with your app are more likely to spend money later down the road.

17. Offer a Relic

Create some extra-special in-game content that is really expensive compared to other content. Cover it with diamonds; gold-plate it; do whatever you need to do to make it stand out from your other items. This will be your “Relic” — the one piece among your in-app content that is just beyond the reach of normal players.

Take a look at the in-app content offered in Noble Nutlings, shown in the screenshot below:

As you can see, the golden wheel is the most expensive option — more than 12 times more expensive than the next item in the list! Relics like these are excellent hooks for whales and hard-core gamers. Whales will spend the money to get the relic right now, while hard-core gamers will spend hours in order to unlock the relic without paying — and you’ll earn revenue from both styles of players.

17. Make Your Users Laugh!

Come on — who wouldn’t want to buy a flying red fridge?

This example is from the wildly successful game Mega Jump. What began as an in-joke at the development studio morphed into a playable red fridge character that thousands of players have spent their hard-earned money on.

18. Provide Limited-Time Offers

Create some urgency with your in-app purchases by offering limited-time deals. Offering key items for 50% off — or more — raises the “buy” instinct in your users.

The following screenshot is taken from Contract Killer Zombies:

The countdown timer showing how much time is left on the deal is particularly effective, as it creates a sense of urgency and leads to snap buying decisions.

If you can remotely set up and control your IAP offerings, play with the settings of “time left” and “cost” to see which combination leads to the highest amount of sales.

19. Offer the Right Tool at the Right Time

Special offers made to the right players — at the right time — are powerful selling techniques.

For instance, the above offer to hire a mercenary pops up in Contract Killer Zombies 2 when you’re faced with an arena full of zombies. Picture players in this situation who know the odds are stacked against them — an offer of help at the right time is a great way to drive IAP.

20. Create Beautiful and Useful Stores

Noble Nutlings has one of the best stores out there, as shown below:

The store is easy to use, really good-looking, and is straight to the point. One great option in this store is the ability to “try before you buy”. The Apple Store uses this to great advantage; when people can try out something before they commit to buy, the conversion rate tends to be much, much higher.

21. Use the Psychology of Color

Think about how you present your IAP contents, right from the store popup to the simple buttons people press to buy your content. How does color affect your users’ purchasing habits?

Below is a chart which matches mood with color:

You can use this as a starting point to help guide you while crafting your design assets.

A great idea is to use a technique known as “A/B testing” in order to understand what color — or combination of colors — lead to higher conversion rates.

You don’t have to rebuild your entire UI; sometimes small changes like changing the color of a “Buy” button are enough to get great results.

clutch.io is a great online tool to use for A/B testing your app. They have recently been acquired by Twitter but provide all the needed tools in order to setup everything on your own server to support A/B tests in your app.

Here’s a few examples of how colors are commonly used to influence buyers’ behavior:

Yellow is often used to grab the attention of window shoppers.

Red creates urgency; try to combine it with time-limited deals.

Blue creates a sense of trust and security.

Green is the easiest color for our eyes to process, and is commonly used to help people relax. Maybe that’s why we like it so much on this site! :]

Orange creates a call to action.

Black is powerful and used to market luxury products. If you’re using a relic in your store, associate it with black and gold to create a sense that the item is priceless.

22. Make Your Store Easy To Find

Try to create several ways for users to find your store. The easier it is to find your store, the greater the chances are that people will buy something.

Check out this screenshot from Draw Something – there is not one, but three different ways to get to the store!

23. Offer One-Time Deals

Eternity Warriors 2 makes great use of the one-time offer model:

One time offers are incredibly appealing, but they get really, really annoying if you present them to the user too frequently. Don’t show your “one-time deal” on every application launch, just once in a while to make the user think the deals are sparse. But when you do present your one-time offer, make it worth their while by offering the user a really cool item or giving them a great deal.

24. Grab The Player’s Attention With Bling

If you want things to stand out such as relics, or the button users click to access your store, use some shiny effects or embellishments to grab people’s attention, as shown in the screenshot below:

25. Offer Multi-Buys

Offering something for free if a user buys a certain number of items is a technique frequently used in supermarkets to encourage multi-buy behavior. However, don’t overdo it; if people become too accustomed to your “bargain basement” deals, there’s a chance that you may risk cannibalizing other IAP contents.

The app below shows a good example of a multi-buy offer for IAP content:

26. Create Your Own Economy

Build an economy composed of achievable and premium virtual currencies. An achievable currency is the one that a player can collect during game play and redeem for in-app items. Premium currency is available only to users who use real money.

You should either allow your users to collect achievable currency through playing your game a lot (thus capitalizing on other streams like ads), or allow them to purchase and exchange premium currency for achievable currency.

In this screenshot, you can see an example of premium currency for sale:

A good approach to controlling your economy is via remote downloads of plist files to tweak the variables in your virtual economy. This simplifies the maintenance of your IAP asset pricing, and can lead to more complex scenarios dealing with price multipliers for subsets of IAP content.

27. Use Applicasa to Manage Your IAP Strategy

Applicasa.com is a mobile games management platform that helps you set up and optimize your IAP.

Their product is still in beta, but they show strong promise and their products are top-notch.

There are several ways that Applicasa helps you manage your IAP offerings:

Understand if your prices are too high or too low.

Keep track of the currency available in the economy and how much of it is used everyday.

Validate every IAP transaction.

Set up a dynamic virtual store where you can update items prices and upload new items.

Understand what items are appealing by tracking how many times an item was purchased.

Run A/B testing for any of your contents.

Auto-segment your users based on behavior and their activity in your app. This allows you to promote your paid contents to different categories of users, as well as promote them during different game events.

It’s important to remember that all users are different; you can’t sell the same way to everyone.

The image below shows how Applicasa allows you to segment users:

Applicasa also helps you create promotions, deals or announcements based on user behavior:

Spending habits — those who spend almost nothing, up to “whales” who spend a lot.

Usage habits — those who play very little to those who play obsessively.

County of origin — consumption patterns change based on the countries and cultures your app services.

Demographics — modify your in-game offers by age and gender of the user.

The two following graphs illustrate how things like age and gender affect a user’s spending habits:

28. Offer IAP As a Reward

When you offer an IAP asset to a user as a reward for performing a certain action, your offer will usually be received with gratitude. As well, it has the added effect of strengthening your brand credibility.

Subway Surfers offers the following reward for logging in to their Game Centre:

When you give away virtual currency as a gift for returning to your app each day, you increase the longevity of your app — that is, how long people will keep using your app as the days go by.

One great example of rewarding the user for returning is found in The Simpsons™: Tapped Out:

Not only do rewards increase as the user keeps returning to the game, but the “Mystery Box” also increases curiosity and will draw players back over many days.

The chart below is provided by Localytics and illustrates the likelihood of a user making an in-app purchase as the number of gaming sessions increases:

The end result of having your players return time and time again to your app is greater confidence in your products, which leads people to spend more on in-app purchases.

A loyal user base is a must for a successful and long lasting game, if you are interested in building your monetization strategy around this concept, take a look at Beintoo.com a mobile engagement platform, offering a unique loyalty program for mobile and web applications.

29. Manage the Difficulty of Your Levels

If your game is level-based, you could provide an IAP to allow users to skip levels that they find difficult. As well, you can tweak the difficulty of each level via your good friend the plist file to find the optimum balance between level difficulty and in-app earnings.

You need to be careful when changing the difficulty of your levels; if you frustrate your users, they’ll exit from the app prematurely and the likelihood of them returning will plummet. One thing you can do is offer power-ups in the level as you tweak the difficulty; you can gauge how difficult the level is by the usage of the power-ups.

30. Adapt to Different Demographics and Tastes

If you have some type of player characters in your game, keep your users happy by allowing them to buy customized clothing, or giving them the choice of an avatar that they feel represents their true self.

The game Temple Run has done this in a superb way, as shown below:

31. Offer Assistance in the Heat of the Moment

As the saying goes, you don’t realize that you’ve run out of toilet paper when you’re standing in the supermarket. Instead of making your players load up on in-app purchases before they start your game, offer them assistance when they need it most — in the midst of battle!

Contract Killer Zombies 2 uses this technique to great effect. Run out of ammo? Need a stronger weapon to kill a boss? No problem! Let the user pause the game and purchase what they need, and allow them to get back to what’s important — killing zombies!

32. Make Purchase Recommendations

As players negotiate through your levels, they’ll often think “Shoot! I should have bought that weapon before I faced this boss!” You can make your players’ lives easier — and increase your IAP conversion rate — by offering some hand-picked items for sale before every new level.

Eternity Warriors 2 offers the player several items they might need prior to each level as shown below:

33. Sell Real-World Merchandise

Fruit Ninja and Angry Birds are such huge titles that they can sell their own merchandise through the app. Most developers don’t achieve quite this level of success, but if you have a critical mass of loyal gamers, you can offer such real-world items as T-shirts or mugs through your app.

Temple Run offers game-branded wallpapers for purchase — there’s no reason that you couldn’t do the same in your app!

34. Keep An Eye on Top-Grossing Apps

Top-grossing apps are built by studios that have mastered the art of engaging players and maximizing in-app purchases. Download their games and play them with an analytical eye to see what makes them so addictive — and what cues they use to encourage people to buy!

App Annie is a great web-based aggregate of app grossing charts, like the one shown below:

35. Leverage In-App Content for Non-Purchase Objectives

Although the majority of people won’t spend money in your game, they’ll still love to receive virtual currency in exchange for their services.

Ask users to perform actions that have some value to you, and reward them with some in-game virtual currency.

Some things that you can reward your users for doing are:

Inviting friends to the app via email, SMS, or Facebook

Completing quick actions that generate value for you, such as Tapjoy or Sponsorpay

Sharing scores on social networks

Logging in to their social networks

Subscribing to your mailing list

Creating an account in your game

Money isn’t the only thing of value in a monetization strategy. A mention on a social network , as well as building your marketing list via email signups, are both actions that have a great deal of value.

36. Create Big Content for Big Spenders

On average, less than 2% of your user base will purchase your IAP content.

According to W3i researches, content priced between $0.99 and $1.99 only generates 6% of your game’s total revenue. However, content priced between $9.99 and $19.99 generates 47% of total revenue.

You can try to optimize your content and try to entice casual users to make more in-app purchases, but the reality is that IAP is not a long-tail game.

The numbers show that users who are willing to spend money will go for the big purchases. Although you will likely sell a lot of content at the 99¢ price point, in the long run you will make more money on the big-ticket items — even though you’ll sell less of them.

37. Ask Politely

When it comes to customer satisfaction, there is nothing more powerful than kindness. When you want your user to do something, like perform an action in exchange for virtual currency, or purchase an in-app upgrade, always use the nicest language possible.

38. Analyze and Optimize Your Strategies

Even if your business is already successful, there’s always room for improvement. Three questions to ask yourself are:

How can I increase the effectiveness of my IAP strategy?

How can I make my IAP content more appealing?

How can I make my content easier to purchase?

To help answer these questions, compare two games from the same franchise: Contract Killer Zombies and Contract Killer Zombies 2.

Wow, that’s a great deal for a shotgun! But unfortunately, your player is out of gold. So when your player clicks the “Buy Now” button, they will be redirected to the gold store before they can purchase the shotgun. This two-step process dramatically decreases the conversion rate of your IAP content.

But take a look at how Contract Killer Zombies 2 has made a slight tweak to the buying process:

Did you notice the changes? There’s only a single step to buy the content, and the offers are definitely priced for whales, who are the best bet for IAP conversions. Pretty smart.

Always put as few barriers as possible between your user and your IAP content.

39. Use Powerful Marketing Words

Language is an incredibly powerful tool when it comes to selling.

Here are a few choice words that have an amazing influence on consumer behavior:

Sale – consumers are 52% more likely to enter a store that displays “Sale” signage.

Guaranteed – consumers are 60% more likely to buy a product that is associated with the word “Guaranteed”.

Free – doesn’t everybody love free stuff?

To illustrate the power of “free”, consider the following scenario.

Customers have a choice between two chocolates. One is well-known brand of chocolate that is on sale and priced at $0.19 — about 50% off the regular price. The other chocolate — identical in quality and taste, though not a well-known brand — is priced at $0.01.

In this scenario, about 75% will choose the chocolate that’s on sale, while only about 25% will choose the chocolate priced at $0.01.

Now the chocolatier lowers the price of each chocolate by one cent, resulting in the following pricing scheme:

Suddenly, the situation is reversed: people suddenly forget about the chocolate that is on sale, and 71% choose the free chocolate. Only 29% will still see the chocolate that’s on sale as a good deal.

The moral of this story? “Free” can be a powerful tool to change buyers’ behaviors — but be careful that you’re not cannibalizing other areas of your IAP strategy!

40. Never, EVER, Annoy Your Users

Last, but definitely not least, never do anything purposely to annoy your users.

Unhappy customers will not buy anything from you. Even worse, they may delete your app entirely, preventing you from capitalizing on your side streams of revenue such as advertising. Word of mouth referrals will make or break your reputation, so focus on offering a really compelling game experience and prevent greed from ruining your game.

Always put the enjoyment of users first!

Where To Go From Here?

Hopefully you’ve found something in this list of 40 tips and tricks that you can use in your IAP strategy. The most important thing to remember is that many, many developers and studios have already learned a lot of the hard lessons. Do your research and find out what others have already discovered — before you make the same expensive mistakes that they have already made.

I’ll leave you with a few links that you may find useful on your journey to monetizing your app:

If you have any questions, comments, or neat ways in which you’ve leveraged IAP strategies in your apps, come join the discussion below!