Revenue generation over the investment is the aspect that defines the profit and loss for your business. This should be perfect if the total revenue generation is more than the total investment, as you can cut out the amount of investment from the ROI, and the remaining number will show your profit amount. The greater ROI helps businesses to implement new strategies, hire more capable employees, implement machinery and equipment, etc. This overall drives the growth of the businesses.
While developing an app with an app development company, the ROI becomes very important as the app development cost is too much and there is no place for any kind of loss in revenue generation. This is crucial to calculating your ROI when hiring an app development company.
Although the typical return on investment (ROI) from working with a mobile app development business might vary greatly, it is generally accepted that an ROI of 100% or more is favorable. The possibility for substantially larger returns, even more than 200%, is demonstrated by certain examples. The app’s monetization approach, marketing initiatives, and user retention are some of the factors that affect ROI.
A positive ROI is the aim, even if it is challenging to determine an exact average ROI. To optimize their return on investment, businesses should concentrate on creating a robust app with a clear monetization strategy, efficient marketing, and user engagement tactics.
Understanding the ROI of Mobile App Development
ROI in mobile app development refers to the financial return businesses receive from the investment they make in creating, launching, and maintaining an app. Simply put, it measures whether the app’s revenue generation or cost savings exceed the initial investment.
- What ROI Means for Businesses: At its core, ROI is a metric used to assess the profitability of an investment relative to its cost. For mobile apps, this could mean revenue generated through app downloads, in-app purchases, or increased business efficiency thanks to automation features.
- Why ROI Matters in App Development: Without a clear understanding of ROI, businesses may struggle to evaluate the success of their app or justify the investment. A high ROI signifies a successful project, while a low ROI can highlight areas for improvement or unmet expectations.
- Factors That Affect ROI in Mobile App Projects: The cost of development, ongoing maintenance, marketing expenses, and the app’s ability to engage users all play a role in determining ROI. A well-optimized app with a clear market fit tends to generate better returns.
The global mobile application market size is calculated at USD 330.61 billion in 2025 and is forecasted to reach around USD 1103.48 billion by 2034, accelerating at a CAGR of 14.33% from 2025 to 2034.
Mobile app development ROI varies with the types of apps and development. While some apps, like travel apps, can achieve high ROI (around $29.42 per user in 180 days, according to Techcronus), others, like games, may have lower ROI (around $1.70 per user, also according to Techcronus).
Generally, a positive ROI means the app generates more revenue than it costs to develop and maintain. Overall, there is no fixed ROI on mobile app development, as it takes estimating yourself based on different factors.
What Does ROI Refer To, And Why Does It Matter?
ROI, or return on investment, refers to the amount that you gain in comparison to the overall investment to develop a mobile application and hire an app development company. When choosing an app development business, ROI (return on investment) is essential since it gauges the project’s profitability and financial sustainability.
It enables you to assess the app’s functionality, pinpoint areas in need of improvement, and convince stakeholders that the investment was worthwhile. Overall, the ROI defines whether your investment was a good decision or if it needs to be improved to justify the investment.
Ideas to Increase ROI of Mobile App Development
Are there some ideas to increase ROI for your app that you should discuss with your mobile app development company? Here are a few key ideas mentioned below.
Expand Beyond The Smartphones
To enhance the overall ROI, it is important to think beyond the smartphone app development, as many other devices like smart TVs, desktops, and smart speakers (Alexa, etc.) can also run applications. So share this idea of the development of an app also for the other devices that increases the users and overall enhances the ROI for the business.
Consider The Subscriptions Apps Model
Pricing models are one of the important sources of generating revenue through the apps. You may also provide free features, but if you can, provide more premium features with a subscription model. Set the pricing model in such a way that can attract the users. Share this idea also with the development company.
Remember the Basics of App Marketing and Promotions
The main causes of loss of ROI are less related to the user interface or money. Rather, they refer to becoming so engrossed in original advertising concepts that they neglect the fundamentals of marketing. Ask the development company to focus on the basics and prioritize the marketing campaign to reduce the investment and maximize the return.
How to Estimate ROI for Your App After Hiring An App Development Company?
Various factors help to assess the value of your app after its launch by the app development company. Here are a few key factors mentioned below.
App Performance
App performance is a very important factor while running an app. Evaluate your app performance regularly to know or ensure the total ROI after development. Use tools like Google Analytics, etc., to measure the performance, as this could be a crucial thing if you want to run your business through the application.
Number Of Downloads
Numbers of downloads also defines how much users like your app. If the number of downloads is less than the necessary amount, then there could be various reasons for it. The reasons may be that it doesn’t solve users’ problems effectively, the marketing texts didn’t compel potential downloaders, and other users provided negative reviews and low ratings.
Active Users
Calculating active users becomes a more important factor than the number of downloads as it shows how users are active and engage with your app. The number of active users can be used to exact valuation of ROI. It also inspires and provides information about what kind of upgrading and updating needs to be done in the future.
Customer Reviews
Positive reviews and ratings are an incredible method to evaluate how well your mobile app is doing. They affect your conversion rate as well. When presenting search results, the Apple App Store’s and Google Play Store’s algorithms take user ratings into account. So this could also be an important factor in estimating the ROI.
Abandonment Rate
The percentage of users who download the app but never use it is known as the abandonment rate. Recent stats show that 25% of users of mobile apps stop using them after just one use; this is a crucial metric. Furthermore, after three days, 77% of daily active users stop using an app. These stats also help businesses to estimate overall ROI.
Common Pitfalls in Mobile App Development That Impact ROI
Not all app development projects result in positive ROI. Certain pitfalls can reduce the potential return:
- Identifying Costly Mistakes That Can Decrease ROI: Overcomplicating the app’s functionality, failing to properly test the app, or neglecting ongoing user feedback can lead to costly issues that reduce ROI.
- How to Avoid These Pitfalls for Better Returns: Working with experienced developers, maintaining realistic project timelines, and incorporating user feedback during development can help avoid common mistakes that lead to poor ROI.
Summing up
After evaluation of all discussions, it could be said that the exact ROI estimation can be difficult after hiring an app development company, as there are many factors that influence the ROI. The factors like app type, complexity, marketing efforts, engagement, upgradations, and maintenance over time. Here is the calculation of ROI mentioned below with an example.
- Calculation: ROI = (Net Profit – Total Investment) / Total Investment * 100.
- Example: If you invest $100,000 and earn $250,000 in revenue, your ROI is 150%.
Overall, it can be concluded that you have to evaluate various factors, costs, aspects, etc., to find out your overall ROI after hiring an app development company. It takes time and some perfect calculation, but it is also important to make your business successful in this fast-paced world.
To sum up, the ROI from mobile app development is a critical factor in determining whether the investment was worth it. By following best practices and working with experienced mobile app developers, businesses can maximize their returns. Custom mobile app development often provides the best ROI, as it is tailored to meet specific business needs.
Remember that focusing on user experience, continuous feedback, and strategic features will help you achieve better financial returns. A well-planned app can provide long-term benefits, ultimately driving success and profitability for your business.
