Great Pricing Strategy for White Label Mobile App Resellers
As a white-label app reseller, your pricing strategy depends on your choice of business-level strategy. If you want to charge a premium price for your apps, make sure that you offer enough value to your customers through your business and if you have an ordinary, average product, make sure that you price it competitively.
While deciding on the price, you must consider the resources and capabilities at your disposal, your consumers’ expectations, and more.
Pricing your products or services is a challenge on its own, and when it comes to a digital product like mobile applications, the challenge is bigger. The tech-savvy customers look at the reviews of all the products in your industry niche, make comparisons, and then finally make the purchase decision.
You cannot fool people into overpaying, and naturally, you can’t price your products too low.
Therefore, it makes sense to study the competitors and your target market well to find the sweet spot that is perfect for you and your customers.
Every business is unique. You may choose to specialize in one particular niche of app reselling or decide to cater to a broad gamut of customers and sell different types of apps. In the blog ahead, we will discuss eight different pricing strategies, and you can choose the one that sounds perfect for you.
Business and pricing strategies
It is not you or a business that decides the pricing. It is the customers and the market. As a business owner or decision-maker, it is your responsibility to conduct a fair amount of research and find out how to price your white-label mobile app.
It is a global market, and you are serving the global customer. It means there is a fair chance that someone is already doing what you plan to do, with very similar offerings and services. Hence, it is inevitably the market that decides the price.
If you opt to price your mobile apps out of the normal market price range, you are going to push your business out of the market as well. Let’s face it. You’re not here to stand at the corners and watch the play.
Of course, there are some exceptions to this rule of business pricing. For example, if you already have an established brand name, you can get away with pricing your apps higher than the average.
Business level strategies
While defining your business-level strategy, two primary variables come into play – competitive advantage and competitive scope.
Competitive advantage involves a range of cost vs. uniqueness. To simplify, it means deciding whether you plan to sell your apps as the best or the cheapest – there is an established market for both scenarios.
Competitive scope, on the other hand, involves a range of narrow vs. broad target markets. For example – are you building an app for the masses or a super-specific niche market.
Based on the above criteria, we have five major business-level strategies. Let’s take a look!
Cost leadership: Salient points: low price, large target market, low differentiation
Differentiation: Salient points: higher price, large target market, high differentiation
Focused cost leadership: Salient points: low price, small target market, low differentiation
Focused differentiation: Salient points: high price, small target market, high differentiation
Integrated cost leadership: Salient points: varying degrees of price, market size, and level of differentiation
The fundamental idea here is to match your capabilities and potential to a consumer or market segment. So, first, do a deep customer analysis and understand them. Then, decide whether you want to serve up a specialized product with a high price or a broader market with a low cost, mass appeal.
Best pricing strategies for white-label app resellers
All the strategies that we have discussed this far sound pretty straightforward and simple in theory. However, in reality, any external factors like demand, cost, availability of resources, etc., may change at any time.
These strategies may not be enough to help you formulate the right strategy. Hence, businesses use multiple other methods of coming up with the right pricing for their products.
Following are the eight major forms of pricing strategy:
Competition-based pricing is often also called competitive pricing or competitor-based pricing. This strategy focuses on the existing market rate instead of the cost of app development or the demand for the app you are selling.
Here businesses use the competitors’ prices as a benchmark. This strategy is ideal for businesses entering a highly saturated space. Even a slight difference in the price may be the difference between success and failure for your app reseller business.
Based on this strategy, you can price your app a little below, at the same price, or a little higher than your competitors. No matter what price level you choose, you stand a better chance of staying ahead of your competition while keeping your pricing dynamic with this price strategy.
In this pricing strategy, companies price their apps depending on the customer’s willingness to pay. The pricing is decided based on customer interest and data collected through surveys.
When done right, value-based pricing can help boost customer loyalty in a big way. The strategy can even help you focus on your customers while strategizing for other departments like marketing, customer service, and more.
The catch here is that you, as a business owner, will have to ensure that you closely monitor the different buyer personas and then decide the pricing for each of them accordingly.
In penetration pricing strategy, a business enters the market with an extremely low price, drawing the entire market away from competitors (particularly the high-priced ones). This strategy is not sustainable but is great for short-term projects.
Penetration pricing strategy works best for new businesses looking for customers and entering a highly competitive space. The success of this strategy is based on the immense disruption it causes at launch.
The strategy relies on the ability of the business to take the initial loss and hope that the customers will stick around when they gradually increase their prices.