The app stores are growing exponentially everyday, leading to competition among advertisers to make their app a shining star. One trend we’re beginning to see more of is the transition to subscription-based apps. These apps not only create exceptional experiences to keep users engaged, but offer advertisers perks for using this payment model. For users, subscription-based apps provide constant value and quality through improved user experience and updated content. On the advertiser side, this model offers auto-renewable subscriptions to make billing effortless, and Apple even increases your net revenue from 70 to 85 percent of the subscription price after retaining a subscriber for one year.¹ Nearly 30,000 iOS apps offer subscription options,² so our team of mobile experts decided to dissect a rising question: How can apps successfully move to a subscription model?
Giving users a taste of what makes your app valuable as a subscription model is a great starting point. You can test various free trial periods to determine what level drives the highest number of users converting to a paid model. Testing a variation of three to seven days will give users a good sense of your product while still having the ideal reaction time to optimize your campaign. Trials closer to 30 days can often be too long for advertisers to be reactive and optimize towards the sources driving higher paid subscription conversions.
Because users pay on a monthly or annual basis, subscription-based apps see a steady revenue flow, earning two to three times more than pay-to-download apps and 50 percent more than in-app purchase models.³ To obtain new subscribers, offer discounts for six to 12-month subscriptions and further lock in that reliable revenue for a longer period. Don’t forget about users who have churned too. Offer these users a discount for future subscriptions to encourage them to re-engage with your app. In the end, if you do decide to transition to a subscription model, be clear with your users on the reasons for the change and inform them of the benefits and if their current access will change. Being transparent boosts trust and, ultimately, engagement from users.
Interested in moving to a subscription model, or is there something you want to know about the mobile industry? Let us know and our mobile experts will get back to the basics with you! Contact AdAction today to submit your latest questions.
About AdAction Interactive
Driving 300+ million installs since May 2013, AdAction is the mobile app industry’s leading performance-based marketing platform with over 320% average year-over-year growth. Our team of experts deliver over 6 million monthly conversions for Fortune 100 companies and elite agencies, including exclusive partnerships with top media sources around the world.