What Goes into Pricing Your Application?
Whether it’s the logical next step for an established business, or the product at the heart of a young startup, companies and individuals are increasingly looking to building apps as a key to capitalizing on the burgeoning global smartphone phenomenon.
With over 1.5 billion smartphones sold in 2015, it’s easy to understand why the market is in such a frenzy, however the state of this ecosystem is that supply has a long way to go to pick up with demand. Simply put – It’s only been 9 years since the iPhone launched this market, and there are still relatively too few people who have the expertise and experience needed to build apps.
We sat down with Médéric Petit and Nattawut Kreangkraileard who head development and project management over at our partners, Bangkok based SmartSoftAsia, to get insights into how this paradigm impacts the processes involved in appraising, pricing, and developing apps.
Building an Enterprise Application is a Team Effort
Building anything but the simplest application requires the collaboration of talents and knowhow from multiple disciplines: code, design , marketing, etc.
As a result it MUST be a group effort, so when we speak colloquially of App Development, we’re actually referring to the time and effort of an entire team of professionals:
- Frontend developers
- Backend developers
- App developers for Android and iOS – Usually separate teams
- Team leaders
- Quality assurance engineers
- Project managers
- Chief technology officer
It’s up to the project manager and CTO to clarify to the team the details of a potential client’s project so that each team member can evaluate their required inputs.
Apps Are Priced by the Hour
“Fundamentally, projects are priced per man-hours of work”, explains Petit – “We determine for each feature how many hours it will take to develop. Our basic unit is a developer’s day, as there are very few tasks that can be completed in less than that.
For project and quotation purposes development time is calculated per page, view or feature. For example, we can estimate an app login page will take about three days to complete.”
“The more data we have, the more accurately we can price the project”, says Petit. “If we don’t have much information we will tend to slightly overprice, because in our experience customers usually end up asking for more features. We try to find out exactly what they want – if they give us more detail we can provide more accurate time and cost estimates”, observes Petit.
Your App Probably Has These Three Parts
When a quotation request is received, the developers create a spreadsheet listing all the required features, and assign a number of hours needed for building out each feature.
For an enterprise app the team must quote for all the development involved –
- Backend – This houses the data for the app and allows administrator control.
- API – Application Program Interfaces that specify how the platform’s database, computational backend and frontend interact
- Frontend – All interfaces experienced by users – AKA Graphical User Interface (GUI).
This process normally takes a few days, and there’s a lot a client can do to help make it more efficient and accurate…
3 Pitfalls to Avoid for a Better App Proposal
When it comes to giving quotes Kreangkraileard and Petit have experienced a range of common hurdles – “It’s very hard to accurately price an app – In essence we’re providing estimations for processes that involve literally YEARS of accumulated man-labor. Given the number of variables that can influence the outcome, it’s easy to understand this is essentially an impossible undertaking”.
As a result our commitment to a cost estimate for an app always involves an inherent degree of risk, which we must figure into pricing – as in any industry. By taking note of the following tips you can help us minimize our risk, and easily reduce your application’s cost:
PROVIDE MORE INFORMATION – PAY LESS FOR YOUR APP
“One of the biggest challenges we face is not having enough information about the features: We often get requests from customers for an app to be developed based on three lines of requirements and want a quote on this. It’s impossible to do”, says Petit.
COPYCAT REQUEST? WHAT EXACTLY ARE WE CLONING?
Similarly, customers are often unclear about their needs. “Sometimes, we don’t know exactly what a customer wants. For example, we get many requests to build localized clones for successful international apps, but phrasing a request as ‘I want to build a local AirBnB/Uber/Line’ is rarely useful, as in the majority of cases that’s actually not really what the entrepreneur wants, and almost never what they can afford…”
Even if you’re planning on building a clone, make the effort of mapping out exactly what you want to replicate, what you DON’T want to replicate, and where you can get-by with alternatives that make the service original / different / localized to your market.
UX AND DESIGN MAKE A BIG DIFFERENCE
The team also struggle with a lack of other key information, according to Petit. “95% of the time we don’t receive the design and UX requirements. We only receive the requirements for the features, e.g. ‘I want an app with a newsfeed that offers pictures and text’ – but we don’t get told how they want it to look.”
For mobile apps, an important factor is the User Experience (UX) and the design. Often when we receive requests, we don’t have any information about the design and the UX – For example:
- What effects compose the total UX? (sounds, animations, notifications, etc.)
- How to handle transitions between views?
- Are transitions based on the basics supported by the platform, or custom?
Far from being insignificant, the details for the design have a crucial impact on the overall experience people have of your app, and can change the amount of development time from a couple of days to two weeks and more…
Getting A Quote
We realized long ago that although some entrepreneurs may find the info above to be of interest, the vast majority are actually in need of a simple, useful and fast way to get an estimate for their app project.
To support this need we created a unique quoting system that allows you to create your own app proposal by selecting which features you want to include in it. Take it for a spin here, and please leave us your feedback on our Facebook page – This is very much a work-in-progress, and your insights are helpful to us in making it better…