Previously, healthcare apps were exclusively developed to complement the physical services of healthcare providers. Now, you can create custom medical mobile apps and turn them into a profitable endeavour within a year. A good monetization strategy can open up an extra income channel for healthcare providers and generate substantial revenue for individual owners. Here are 5 monetization models for healthcare apps to help you find the most suitable strategy.
Table of Contents
5 Monetization Models for Healthcare Apps
Here are 5 ways how you can monetize healthcare apps.
1. Freemium Model
Freemium is a portmanteau combining ‘free’ and ‘premium’. As you can guess from the name, a freemium app offers most of the basic features to the user and charges a small fee for the advanced features. The freemium monetization model is most suitable for healthcare apps with comparatively low acquisition costs and a high customer lifetime value (LTV). The healthcare apps can leverage their free basic features to build relationships with customers and increase retention rates.
After they have gathered data on the user’s usage pattern, they can start offering them the paid features that will enhance the user experience. The healthcare apps can charge a one-time payment for unlimited access to the advanced features or use a subscription model to establish a stable cash flow for the company.
The freemium model is one of the most popular business models in the mobile app development industry. This model is usually adopted by healthcare start-ups that want to increase their brand awareness and onboard as many users as possible. Usually, customers don’t mind taking such free apps for a spin.
On the downside, there is no guarantee that free users will convert to paid users. If you offer too many free features, the users might not have enough momentum to turn to paid features. Furthermore, the users might find the limited features of the apps cumbersome and jump ship. Therefore, be cautious and A/B tests all the features before putting them up behind a premium wall.
2. In-app Purchases
Another method of monetizing your free healthcare apps is to offer multiple in-app purchases. The mobile app publisher or healthcare company will encourage the user to purchase virtual goodies and access various features within the app.
For example, Mindspace is one of the most well-known mobile apps in the mental healthcare sector. Certain practice and exercise courses can be bought only through the app. Once the product has been purchased, the user gets lifetime access to that said course.
There are a few different style products suitable for in-app purchases such as consumables and non-consumables.
- Consumables are features within the apps that offer certain content to the user and can be purchased, used, and repurchased. Mindspace offers these consumables to its paid users.
- Non-consumable digital goods need to be purchased once and can be used forever—paid access to additional content or some feature, for example.
For instance, StepSetGO is a popular tracker app that allows user to track their running and walking activities. This app provides incentives to the users by offering them SSG coins which can later be redeemed for tangible rewards. In addition to that, the user is encouraged to sign-up for the paid fitness regimes available within the app.
3. In-app Advertising
One of the most common monetization models for healthcare apps is to display in-app advertising. Most free healthcare apps make their revenue through advertising other third-party applications. Mobile app publishers prefer advertising the feature of their apps on healthcare platforms with a large user base.
Subsequently, these mobile publishers increase their brand awareness and engagement rates. And, the healthcare apps get to enjoy extra revenue without any cost to the users. In-app banners, native ads, and video playable are a few of the popular ad formats for these apps.
Furthermore, removing intrusive advertisements comes as a feature for premium users. Therefore, in-app advertising works best when combined with the freemium model.
These apps must not be too intrusive, or they might ruin the user’s browsing experience. Increasing the frequency of the ads in your app might push the users to look for other alternatives. Instead, offering rewarded videos and surveys can make the ad experience for the users bearable.
Reward videos offer points to the users for watching full-screen ads for a limited amount of time. Healthcare apps also earn more money through these full-screen ads. Similarly, a reward survey offers extra benefits and points to the user for answering the questions. These points can be redeemed to get a few months of paid membership or access to other in-app features or consumables.
4. Certified Content or Services
Healthcare apps that offer one-to-one or peer-to-peer services can monetize their certified content and services to create an inflow of cash. Certified content can be monetized as its more valuable to the users than the app’s features. For example, a medical app keeps doctors updated about the advancement in the medical sector and offers the latest news. The app can show certain content for free to the doctors and then encourage them to pay for access to the certified content.
Correspondingly, the app can connect users to medical practitioners for online check-ups and diagnoses. Then, the healthcare app can charge a small fee from the users whenever they make a payment towards these services. Amwell uses a similar strategy to generate its revenue. The app charges doctors for listing their services on its platform as it increases visibility and draws more patients. And it also charges a small service fee from the users that avail of these certified services.
5. One-time app purchase
If you believe in the functionalities of your app, you can always charge an installation fee from the customers. The user will have to pay the money for downloading your app from the Play Store or the App Store. Such apps will see higher engagement rates as the users feel obligated to use the app since they have already paid for it. However, paid apps can be a double-edged sword.
To begin with, users might hesitate to pay the price upfront without having used any features of the app. As a result, it might not be easy to grow your customer base. Again, if the customer is unsatisfied with the app’s user interface, they might ask for a refund and leave a negative review that might affect the brand image.
To make the most of these models, the monetization strategy should align with the concept and business logic of the brand. Each of these strategies can be implemented alone. But, in most cases, it is better to combine a few of these strategies to find the optimum balance.