The Whale Monetization Pattern

The Whale Monetization Pattern

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Most mobile app users will never pay for anything on your app no matter how much they want or need the extra features that come with the purchase. That is ok. It is just a part of doing business. Instead of focusing on those consumers, it can often be much more productive to identify and focus on the consumers that do pay. People that do pay are interesting because some of them may be able to spend a substantial amount of money with your business. The customers that spend a significant amount of money on your business are called whales because the amount they spend are whale-sized when compared to the rest of your customers.

Let’s go over a popular pattern as an example of how some games use this whale pattern to extract as much money as possible from customers who are able to spend it. If you play mobile app games, you may realize that many of the games have an unlimited number of levels. There is no end to many of the games. You start out playing for free, and get hooked to the game because it is fun. People who get hooked eventually make it far enough in the game where they can’t beat a certain level because the game just becomes too difficult. That is done on purpose by game developers. Once users are stuck on some level, they are given a choice to buy extra items or points to help them beat levels of the game for as little as $0.99. Most people don’t buy such items, but some people do. Once an individual has justified making such a purchase in their minds, making the same purchase again may not seem as a big deal. Guess what happens in the next level of the game. It doesn’t get any easier. In fact, it gets harder and harder. To beat further levels these users have to spend $0.99 again and again. Most people do this only a few times, and eventually stop. But some people who are hooked enough on the game have been known to spend thousands of dollars this way. These people are obviously rare, and their judgement and even emotional stability may be questionable, but they do exist. These whale users tend to account for the bulk of the revenue for many games out there even though they make up a tiny fraction of all the game players for a given app. There is also an ethical question of whether this kind of an approach should be used since it takes advantage of people’s psychological weaknesses. Nevertheless, this pattern is one way in which many mobile app developers have found a lucrative way to make money from their apps.

For your part, as a business owner, you must always think about ways to extract as much money from customers as you possibly can. It may not sound like the most ethical thing to do, but if you want your app or business to survive, your challenge is certainly to find paths to sustainable revenue sources.

Mobile App Marketing Book

This tutorial is just one section of my mobile app marketing book. Check it out on Amazon. It is available on the Kindle which means that you can read it on the Kindle app of any smart phone.

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