How much revenue does an app generate?

The answer is of course: it depends on your business :-). But with a decent app you can generate a good amount of revenue. Let me give you a real world example from an SME. The app I’m referring to was updated in 2017 with new features.

During the first few months until the end of 2017 of revenue was rather low: just a little above 2000 euros. However, this was only the start. In 2018 the revenue was already 8.000 euros, doubling in 2019 to 16.000 euros and in 2020 to 31.000 euros. Surely the business spent a ton of money on advertising the app? The answer is no. It’s all organic growth. And the trend continues during the first few days of 2021. During the first two weeks of January 2020 the revenue was 400 euros. In 2021 it’s already 1.600 euros. This indicates that the app should be on track to double the revenue 2021 again to approximately 60.000 euros.

You are surely wondering how much the business spend for the app? The answer is about 35.000 euros. How many users does the app reach? The install base of the app is about 11.000 users.

What is the secret of this success? It’s simple: it’s constant engagement of customers. You need to constantly send information to your customers in your app. That way you make sure that you reach the proper audience (after all, many of the users are your customers who installed your app). While spreading the word on social media certainly helps, the only way to generate meaningful revenue is your own app. We can offer also some intersting data to that end from the SME. In the first two weeks of January 2021, the social media revenue was 140 euros, compared to 1.600 euros of the app.

There are several lessons that can be learned from this. First of all, it might take a while before your app really pays of. This is normal and you have to be patient. Give it at least one year (better 18 months) to see how things develop. Secondly, you need to update the content of the app on a regular base. A good rule of thumb is to take the numer of average purchases a customer makes per year and multiply it by a factor of 10. That’s your target number you can work with. The third takeaway is that you should take the numbers that you get from social media platforms with at least a grain of salt. Reaching an audience of 10.000 people doesn’t mean anything for your business if you don’t make money with that audience. And the final takeaway is that nothing is better than your own app when it comes to generating revenue.

If the pandemic has taught businesses anything it’s the value of a digital channel to customers. If you own this channel, you can make the most out of it.

Photo by Micheile Henderson on Unsplash

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