According to app store analytics researcher Distimo, developers who put their iPhone and iPad apps on sale in Apple's App Store see a significant jump in revenue, as do Android developers using the Android Market.
For the report, Distimo examined 100 of the top apps in Apple's App Store (for iPhone and iPad) as well as the top 100 for the Android Market. For apps in the iPhone and iPad divisions of Apple's App Store, the first day increase in revenue was 41 percent and 52 percent, respectively.
After 15 days, both the iPhone and the iPad apps leveled out a bit, but still showed a 22 percent and 19 percent increase in revenue. While these numbers are impressive, the Android apps had even better results over the long term, showing an increase of 29 percent.
Of course, these numbers are merely averages and not indicative of overall success. In fact, 44 percent of iPhone apps actually lost revenue after putting their app on sale. This has to do with several factors, but most important is the sale pricing structure.
Distimo found that apps with the most success during sales used one of two approaches. The first was to cut the price of the app in half or more. That $9.99 app had to go to $4.99 or lower. The second was to put the app into the "Tier 1" or "Tier 2" pricing points, 99 cents or $1.99. Basically Distimo found that the greater the discount, the more the revenue gain could be.
But it's not as easy as just putting a giant price tag on your app then offering a huge discount to gain revenue. You still have to have a good app in a category that people are willing to spend money on. You also have to advertise and publicize before, during, and after your sale if possible to help drive downloads.
All in all, putting your app on sale is not a guaranteed strategy for gaining revenue, but when combined with proper pricing strategies and timing, could help with overall sales. Do any developers have success or failure stories when putting an app on sale? Let me know in the comments!