Did you know that it costs between $25,000 - $1,000,000 to create a successful app in 2020? Instagram cost approximately $250K to develop, but it sold for a billion dollars, so in perspective, that initial investment saw a $4K return for every dollar spent! Of course, not every app finds that level of fortune, but you can still take the necessary steps to ensure that you have a fighting chance. To reach your full potential, it’s essential not to cut corners and leave your app in the crowd instead of creating a stand-out experience that users will want to have and share.
Apps are essential ways for businesses to stay in touch with their clients and customers where they are – which is on their smartphones! From home security companies like ADT, to e-commerce giants like Amazon and Wayfair, if you have a business – there’s probably a way you can enhance your customer engagement and give them more ways to buy more from you with an engaging shopping experience that is tailored for their device. For others, the app on its own can be a business, whether it’s a game, social network/marketplace, or just one thing you can’t find anywhere else, like the flashlight app.
One huge factor in the cost of a successful app in 2020is the app type. Let’s look at three very different kinds of apps to understand why the price can vary so greatly.
A top-level gaming app will range from $100K to over $1M with most in the low-six figures, and when you think about it, that makes sense. After all, wouldn’t a game with AR or one that has tons of custom options and complex graphics, cost more than a simple game like Pac Man? A complex high budget game does not mean that it will be more successful, but the time that’s spent on its design elements will surely increase the bill. The ROI on a simple, but addictive game can be very lucrative. For example, Angry Birds cost approximately $140K to design and develop ten years ago. It then sold for $20M and later received an acquisition offer for $2,500,000,00 – yes that’s a whopping two and a half billion dollars!
Game apps are potentially lucrative because of their addictive mechanisms and in-app purchases, so when you’re considering whether or not your idea is likely to pay off, remember that you can get to $1M in revenue by selling a million people a $0.99 app, or you can get 100,000 people to love a free app, then pay $0.99, $2.99, and $20 over time and make a lot more.
You’ll want to factor in: stunning graphics, captivating audio effects, immersive gameplay, online multiplayer, AR, engaging storyline, leaderboards, and many levels, and compactness.
Social Networking App
A social networking app like Twitter can tip the scales from $100,000 to $300,000, but here’s why! It’s not just about putting all the moving parts of widgets and code together. According to prehype podcast host, Henrik Werdelin, “These days, it’s less an issue of creating a technology stack and more about creating the ‘experience layer’ on top, the interface that makes a product relevant and intuitive for people to use while quickly demonstrating its value.” It’s not just what the app does, but how it feels and fits seamlessly into the user’s life.
In terms of creating profit from a social app, think about user data with market value which can be collected and sold with their permission, as well as how you can build in advertising in a way that feels like part of the social app experience.
You’ll want to factor in: easy log-in and navigation, easy and extensive profile customization, influencer status potential, easy integrations with other platforms, privacy and security, file sharing and streaming, relevant notifications, and constantly updating feeds with relevant content. Not to mention a compelling marketplace for advertisers.
An app that mostly works offline, but has some online functionality is likely to come in the $25,000 to $80,000 range, depending on a few factors. Namely, how complex is the stack of interfaces, integrations, e-commerce, and user features. The more the app does, the more it costs to design and build, but also the more it offers to the end-user.
You’ll want to factor in: search functionality, responsive design for screen sizes and so many varying devices, minimal keyboard use, offline capability, and sharing from within the app.
No matter what end-result you have for your app, every successful app invests in these three areas: development, design, and marketing and support. Development refers to the backend functionality of your app. A lot of app developers want to start with design because that’s the more creative side of the process but overlooking development or marketing and support could leave you with a beautiful, but not functional app that no one knows about.
The costs associated with development determine the coding platforms, functionality/user experience (UX), features and the skill level of the developer. In a usual team, you can expect to find a Mobile Developer, QA Engineer, UI/UX Engineer, and a Project Manager. Larger teams include other key roles, such as Business Analyst, Backend Developer, and others. The cost largely depends on the experience and value each player offers, as well as the time involved.
Coding Platforms refer to the programming language that will determine the machines that will run the app. Native apps, which are written in the programming language of the app platform, run best. These are Swift for iOS and Java for Android (although it’s worth mentioning that Python is growing quickly in popularity for its user-friendliness, so if you’re looking to learn code, this is a good option for Android). There is another option, which is a cross-platform app. At first glance, this is a great idea because it’s one app that runs on both iOS and Android operating systems. However, cross-platform apps run partly on the operating system and partly on the internet, and they are very difficult to build and maintain. We treat these hybrid apps as glorified mobile websites.
Functionality is the sum of the decisions about what options will be available on the app. These choices include the amount of pages for the user interface design, such as a separate log-in page or the series of pages to get from one place to another. Data storage and how much information will be stored in the cloud, in comparison to on the device will also be taken into consideration. Error handling to avoid crashes if the user inputs unexpected data, or if a server is down should also be factored in to maximize app speed.
If you expect your app to have an international audience, you’ll want to support language selection for the relevant audiences, which can cost as little as $1,000, but overlooking this feature is a good way to alienate would-be users or create misunderstandings that send people elsewhere.
Features include whether and how users will create profiles and avatars, or if and which social integrations will be available is also a consideration. In-app purchases, free v/s paid content, push notifications, and possible uses for geo-location will be factored in as well. At this stage, you also select the devices to sync across. Consider the advantages of Evernote, which syncs across devices and allows caches of paid cloud storage. Optimizing for tablets is a commonly overlooked cost because it seems like an iPhone app would run on an iPad since they’re both iOS
It can be tempting to integrate all the social media platforms and leave no one behind, but you’re paying per platform, it makes sense to stick with Gmail, Facebook, and Twitter to cover the heaviest hitters. Have a plan for what features you want to offer in the first phase and then what you intend to add later in upgrades. Coordinating that plan with the developer will help you avoid major rewrites of code along the way.
Spend Less, Get More
The best way to save money on development is to use click-through prototypes from Adobe XD or Proto.io, etc. to decide on the UX before working on the code, which is the most expensive part of the labor. You might also find UI kits that will help you move the needle faster on obvious choices your end-user will appreciate. There are also iOS push notification plug-ins like OneSignal that can save you from building something that’s already out there you can integrate. There are also third-party chat integration tools that can save you on development costs.
Design are the style and delivery elements that differentiate go-to apps with those that get ignored. Visuals encapsulate the look and feel of your app. Consider the visual difference between PayPal and Venmo. Both apps function similarly, but Venmo’s more social UX attracts younger and less-privacy concerned users. The UX covers the ease of signing up and options to increase engagement and everyday usefulness.
Visuals and UX Positive local or major press attention is a strong example of social proof and will lend credibility. Media mentions can also help give the business a reputation for great quality and customer service, which will also attract new customers.
Branding involves the color palette, logo, and font choices. These might be the same as for your business, or you might need to create a custom logo or move to a new font because of size constraints. The logo for your app is what users see on their phone, so you want to standout and visually look like the solution to the problem your app solves but be readable. Meetup does this very well with a single “M” in their recognizable colors and font. Google Chrome simply displays an iconic color wheel.
Copywriting establishes and supports the tone of your app and motivate the user to take the next action and continue engaging. It’s crucial to create a copy that is compelling, clear, and as brief as possible. An app with vague calls to action and lack of storytelling is going to have users clicking away before they understand why it was going to benefit them to use it.
Marketing and Support
Did you know that according to Business Insider, “59% of apps don’t make enough money to cover the cost of development?” One way to make sure you’re in the other 41% is to conduct the marketing research, testing, and campaigns necessary to find and retain engaged users. The other factor is to keep the app functioning with regular maintenance support. Tom Cummings of Fisku says that the top 25 apps of the U.S. market are spending at least $200K each month in marketing. So, where does all that money go?
Marketing is the secret behind almost all successful apps. They take the time before launching to do A/B testing so instead of guessing what end-users will prefer, they already know and do just that. They also build audiences with social media campaigns to create demand for the app and drive pre-sales for a stronger launch position, as well as pushing hard for reviews from that loyal fan base. This is also necessary to prove to yourself that you have a viable product and are targeting the right customers who want what your app offers.
You will want to create an app trailer for the pre-launch campaign. This is also an important tool for your press kit to introduce your app to podcasters and reviewers who can help expand your audience. In the same way that you would optimize a product on Amazon, it’s important to optimize your App Store description and reviews with helpful keywords. Video ads, both full-screen and in-feed, are also powerful must-haves to get the word out about your app.
Support and maintenance are also paramount. On day 1, there should be a plan for quickly releasing bug fixes, easy-to-find FAQ’s, a way to submit help tickets or chat with a bot—or even better, a real person—and a rating system. When something crashes, or a user cannot find an answer to their problem, whether they find your support helpful or not is the difference between retaining a loyal user and sending them running to the next app, or even worse, to leave you bad reviews.
The rule of thumb is to budget 20% of the total cost of your app for the yearly upkeep and security fixes. There are rare upheavals, such as when Apple required all apps to upgrade from 32-bit to 64-bit, but more common are the smaller feature updates, which often go unnoticed—until something crashes or freezes. You’ll want to cover updates for notifications, authorization, and integrations.
It might be worth it to integrate Siri into your app to connect your user to all of her integrations with one single integration on your part. Be aware that can cost $6-8K, but it could payoff huge for the UI if your target market uses Siri.
Who Do I Need on My Team?
If you’re looking for areas where you can cut costs, consider what you might do yourself instead of hiring out, and which parts of the work can be done well and more cheaply by contractors instead of using an agency suite package.
Do-it Yourself: There’s a reason that you want to create an app. Maybe that reason is that you can do a part of the work that’s required, or it’s something you are excited to learn. Those are great reasons to try to do it yourself. A lot of app creators begin as graphic designers, marketers, and coders, so you’re in the right place. If you and your team can do big chunks of the work already, then it makes a lot of sense to contract the other work out to capable people who can fill in those gaps. Maybe you already have a marketing department, or you’re comfortable writing code and don’t need to hire a developer but only require design help. For both do-it-yourself and outsourcing, you will also have to be your own project manager to oversee the development, design, and marketing.
Outsourcing Offshore Teams and Freelancers: If you are U.S.-based, you might save some money with an offshore company. There are qualified, skilled app developers in Southeast Asia and Western Europe, but not all providers are equal, and it’s possible to be scammed and left with less than you agreed on and no real recourse. However, there are ways to hedge your bets. You might look at a community marketplace like Upwork and check out the reviews for app developers, both offshore and freelance. This is where you will find your cheapest labor, but also in most cases, they also have less experience and are building portfolios, so buyer beware. These orders tend to be filled more slowly because people are learning on the job or take more orders than they can fill because the rates are too low. Ask for samples, read the testimonials, and you just might land a great contractor.
Development Agency in North America: With absolutely no bias whatsoever, this option is right for app creators who want to lower your risk and have the best chance of reaching your objectives with a team of experienced professionals skilled in development, design, and marketing under one roof.
The big takeaway
Find someone who educates you on the app building process. Aesthetics are a major factor in how the user engages with your app, so design the first thing to look at. Someone who takes a look at your concept and asks questions, finds flaws and suggests solutions – that’s who you want creating your app. We can’t tell you how many times startups and established companies have come to us with their “broken” app that they had built overseas due to lower fees, only to find that none of the code or design elements are usable, and they have to start from scratch again. It is a competitive digital jungle out there, so whatever you do – do it right the first time around!
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