Software monetization allows you to generate revenue from your intellectual property. You can generate revenue from the rental or sale of software apps, the prevention of unlicensed software usage, which reduces revenue leakage, and the rental or sale of value-adding services that complement the critical software apps you offer.
With an effective software monetization technique, you can protect your apps from unauthorized usage, copying, and distribution while creating new revenue, enabling you to expand your business. Here are nine software monetization tips for 2024.
1. Generate license keys
License keys are essential for ensuring the correct usage of your software by allowing users to identify themselves as legal customers. They secure programs to ensure that only authorized users with granted access can utilize the software. Licensing safeguards users by demonstrating how they’ll remain in compliance with the software to limit their legal liability and prevent infringement claims.
License agreements also allow users to maintain a good relationship with software vendors. Additionally, software licensing protects a developer’s trade secrets and intellectual property, limiting what others can do with the covered software code and restricting vendor liability. Once users have access to or download software, license keys unlock the products, giving access to those who can legally access it.
License keys are an excellent way to protect your software and you, the developer, to guarantee the software isn’t being misused without a license. Failure to use a license key during the activation process subjects your intellectual property to illegal use, affecting your profits. You can visit licensespring.com to learn more.
2. Implement a subscription model
Source: revenera.com
Instead of charging users a huge upfront fee, you can introduce a monthly subscription model where they pay once a month. A subscription model requires users to renew their licenses after a specific period to keep accessing the software. You can provide an auto-renewable subscription option where access expires after a set period and then regenerates itself. You may also include a non-renewing subscription alternative where users subscribe for a particular period, and access is discontinued once that time lapses.
Users have to re-subscribe manually for this option to continue using the product. The subscription model is an excellent way to create stable revenue and significantly improve profit per end user. However, this monetization option can be challenging because you must convince users to subscribe.
3. Provide in-app purchases
In-app purchases are a great app monetization option, especially for SaaS and eCommerce businesses. You can provide consumables, which are in-app purchases made regularly in mobile app games and often relate to power-ups, in-game money, or extra health. they vanish once the user buys and utilizes them, making them appropriate for repurchase.
You can also offer non-consumables where users have continuing access to the non-consumables after purchasing them. Bonus game characters, unlocking new levels, loot boxes, and cosmetic goods are some of the non-consumable IAP products you can provide.
4. Consider in-app advertising
Embedding ads into your software is a tried and tested way of monetizing your apps. This model does better in conjunction with subscriptions and in-app purchasing. You can provide your software on two payment tiers, including mandatory ads or ad-free with a subscription payment. Giving your software for free but with advertisements can boost download volumes while letting you keep generating revenue. Nonetheless, ad-based monetization models depend majorly on the traffic you drive to your app. You can generate revenue through interstitial, display, banner, native, and video ads.
5. Leverage freemium subscriptions
Source: chameleon.io
Freemium can be a rewarding app monetization model. It provides free app users with premium features access at a subscription fee. Once users download free apps, you can offer them in-app purchases that allow them full access to digital goods, premium features, or additional content. For instance, Spotify, a music streaming app, is a good example of a freemium app subscription technique.
Freemium models are scalable, allowing new ventures to scale up while attracting a user base without the expensive overheads of traditional sales and marketing campaigns. They also enable users to try the app before committing to paying for it and help earn revenue from clients who wouldn’t otherwise be ready to pay for your software.
6. Consider affiliate marketing
Most major tech companies, such as Microsoft, Apple, and Google, provide affiliate programs suitable for software developers. The programs may include promoting other apps in your app. The commissions paid in this software monetization option are usually not high, and you (the app developer) can decide on the apps to promote, encouraging users to associate your app with similar businesses.
You can generate revenue from your software through affiliate marketing without charging for in-app purchases or downloads. It can also help you build brand relations by promoting and selling services or products in your app. Since the company pays you to market its products or services, your software won’t require advertising to make money. You have unlimited success as an affiliate marketer, provided you can land good deals.
7. Try the floating licensing model
A floating licensing model supports concurrent usage. While it allows for an unrestricted number of various users, only a specific number of users are allowed at any given time. The floating model is common in B2Bs because it can be implemented in a workstation so that only a specific number of workers can access the software simultaneously. Consumers will mostly request floating licenses because they’re more affordable than the standard-node-locked licenses on each machine.
8. Implement perpetual end-user licensing
Source: clientsfirst-us.com
Licenses are sold directly to the end-users authorized to use the software. In this model, the user must fully purchase the software in advance. They cannot cancel their subscription later or avoid using the product to restrict the amount they spend. This is why the perpetual end-user licensing model is best for trust-worthy, recognized products or trial options that enhance users’ confidence in purchasing the software or app.
9. Execute the pay-per-use model
The pay-per-use pricing model doesn’t assume a fixed annual or monthly fee. Consumers pay for what they use. Pay-per-use can coexist with a subscription-based model to get users to try your products before buying and monitor actual usage. It enables you to manage per-use expenses, reduces customer adoption barriers, and promotes data-driven customer learning. The pay-per-use model gives users flexibility because they pay based on how much they need.
Endnote
Software monetization is an excellent way to protect intellectual property while getting compensation for your hard work. Consider implementing these software monetization tips for 2024 to generate revenue.
