How much is an App?

December 8, 2017

“What does an app generally cost?”

Working at a leading Australian mobile app development company, this is a commonly heard question, whether you’re at a BBQ with friends or a meeting with a prospective client.

It seems like such a simple question and the people asking it just want a straightforward answer, but the truth is, it’s complicated. An app can quite literally cost anything. With no requirements as a basis for context, the price range is anywhere from several thousand to several million. Whilst that answer can make for some interesting conversation at a BBQ, it doesn’t quite cut it with prospective clients in a meeting room who need a mobile solution and are looking for some guidance on their budget and spend.

Why is it so complicated?

Before we address how to approach the question of how much apps cost, it’s worth understanding the complexities in determining price. There are many variables which dictate how much an app will cost to design, develop, test, deploy, and support.

Let’s take a more commonly understood real world example as a metaphor. If I were to ask you “What does a car generally cost?”, would you be able to give me a straightforward answer? The price range is probably similar – depending on a number of variables, a car can really cost anything.

Let’s look at a few examples of how you might approach defining a car cost and relate that to the app world.

 

Car App
Brand new or second hand? Whilst there aren’t any second-hand apps, there are less expensive ‘white label’ solutions that implement a lot of common app functionalities. These apps can be branded (logo and colours) to the customer's business, but ‘feel’ the same as other implementations and offer little in regard to custom functionality.
Usage: occasional, daily, work, off-road trips As with a car, the intended use of the app can dictate the investment in quality (and therefore cost). If the motivation for the app is just to ‘tick that box’, generally being used to funnel customers to other organisational touch points, the investment will be significantly less than a feature-rich app.
2 Door,  4 Door, SUV, Ute, Sports Apps don’t come in models as straightforward as automobiles, but as with a car the breadth of functionality and versatility an app offers will have a significant impact on its cost.
Safety features If the app is going to require authentication, collect personal data or manage payments then the security of data and transactions (“safety”) needs to be a consideration and will impact solution costs.
Quality / Performance With a car, when we start to think about quality and performance, we’re looking at reputable brands or higher-end offerings from a particular brand. Translated to an app, quality isn’t just about coding standards and architecture, it’s about the user experience of the app. To build a truly high-quality product, we need to put more time into researching the end user, conducting usability testing and tailoring an app design to satisfy user needs and exceed their expectations.
Status Let’s face it: some people buy a car for functionality and some purchase for status. Apps can be the same; organisations in a competitive space can’t afford to just equal the competition with a carbon copy of another organisation’s app. They need an offering that’s unique to the market to get the edge on their rivals. Tailoring the app to this level comes at an additional cost, but differentiates it from the competition.

 

Hopefully the above provides you with a bit of an appreciation as to the complexities in determining app costs. There is no quick and simple answer without context.

With so many tangible and intangible factors dramatically impacting app costs, it’s difficult to provide an accurate answer for organisations still unsure whether they want to embark on an app project. However, organisations need realistic indicative costs in order to move those app projects forward to even an initiation stage.

So, how can we efficiently get the context required for a useful high-level price range in the early stages of an initiative without first investing heavily in product definition?

Reframing the question

When an organisation is in the very early planning stages of potential mobile app development, the real question isn’t “How much does an app cost?”, but “What is the value of the mobile app to the organisation?”

Reframing the question in this way shifts the conversation from pure dollars and cents to a broader context which can be used to gather enough information to provide a meaningful cost indication.

Walking through the below measurements will help contextualise the app value:

  • Brand/Reputational Impact – not simply a question of the impact of not having a mobile app, but what is the impact if the app receives bad reviews/press or doesn’t deliver on customer expectations.
  • Functionality – the intended functionality of the app has an effect on its value. If the app is simply glorified brochureware, it’s much less valuable than an app intended as a significant business channel where customers will be able to execute core business transactions.
  • Competition – who the competitors are and the maturity of their mobile offering will provide a benchmark for the app solution. How the organisation wants to compare to competitive offerings can be a key value indicator.
  • Security – the functionality of the app and the sensitivity of the data it accesses will set a security priority. Given security breaches can have wide-ranging ramifications, the richer and more personalised the functionality within the app, the higher the value that should be placed on security.
  • User Base – The percentage of a client’s customer base that is expected to use the app has a direct correlation to its business value. The higher the percentage, the more valuable it will be.
  • Consolidation – If the app is intended to streamline or consolidate customer channels (potentially leading to savings in other areas of the business) there’ll be a greater ROI and hence greater value.

Conclusions

In the early stages of planning the development of a mobile app, it’s very difficult to put even a ballpark price on delivery without a definition of the app’s features. However, if you reframe the question and focus on understanding the value that the app represents to an organisation, not only will you set a frame of reference for its worth, but you’ll also understand enough context for an educated discussion around high-level costs.


Paul Richardson is the Pre-Sales Lead