Quick Inquiry

App Subscription Business Model- A new way to maintain apps sustainability

App Subscription Business Model- A new way to maintain apps sustainability

Normally the procedure we follow in case of apps:

  • We see a new app and get fascinated with its look and features.
  • We check whether it’s for free or a paid one.
  • We download it and enjoy for a few days.
  • We get bored and uninstall it. End of fascination and engagement.

This process becomes a looping condition for our thought process.
The market is flooded with the number of apps.

The apps have a short lifetime. To survive in this competition, it’s necessary to work upon customer acquisition which is really a hard nut to crack. You need to showcase your value and give them the whys and wherefores of giving space to your apps in their mobile phones.

Another Herculean task is to convince the users to take up paid plans or precisely app subscription plan after the usage of the free version of your app.

Free Advice: When you want that your app should be subscribed, you have to take efforts. The people who are using the free version are your target audience.

To convert them you need to show the valued services through your app. In short, before they decide to go for the in-app subscription, you have to assure them that their decision is correct through your app’s services.

Benefits of adopting App Subscription Model:

  1. Ballooning of average revenue per user(ARPU) with respect to the billing on a recurring basis.
  2. Increases brand engagement.

Pen Down The Point: It is advisable to have a monthly subscription plan rather than a one-time in-app subscription plan.

Let’s put some light on these topics.

1.  Segment the customers are per their app activities

The app usage pattern for every customer varies. It is always better to divide your customer database into sub-groups following a particular pattern.

These may be as per demographics, choice of selection or interests. Once your customers are segmented and you know what motivates them, then you can start your messaging as per their availability.

This not only increases the engagement factor with your app but also increases the chances of opting for a subscription of your app based on the values you publicize.

2.  Judge the performance of your campaign

Imagine, you have already an existing campaign but need to check the graph of your in-app subscription.

The solution for this is using A/B testing and Multivariate Testing.

This not only gives you a clear insight into the effectiveness of ideas that you are working on but also provides you with a scope of improvement in your campaigns.

*A Short Revision*
A/B Testing works as follows:
The original in-app message is for instance “Expires tomorrow”. Its variant might be for instance “Expires in 24 hours”. Now, in A/B testing it is checked which out of these two variants creates more puff.

Multivariate Testing works as follows:
In this type of testing, different combinations of the same message are tested. For instance,

3.  No platform limit for Messaging

To make the concept short and simple, it is reaching to people with your valued services through various platforms. This not only helps in customer retention but also helps in Monetization efforts to see that customers have no other plans rather than sticking to your app subscription plan.

4.  Piloting by Content

A picture is a thousand worth than a stuffed text. Then you know how much a video is worth of. In other words, your content should be eye-catching as much as possible.

Your content should be impressive and way better after subscription than what you offer in the free trial for conversions. Contents play a significant role in traffic boosting as unique and relevant content keeps your subscription level up.

Advice: Plan accordingly about your content release so that people can have a consistent decision to subscribe always with a new release.

5.  Lure them with offers and discounts

If you want your app subscription model should top the selling charts then you have to lure your customers with exciting offers and heavy discounts.

The main focus will be on those users who have been using the free version of the app and their trial version has few days left. The reason is, they are most likely to opt for the subscription model.

6.  Say ‘No’ to ads

Ads are irritating especially while using apps. With campaigning, tell your users that the subscribed version is free of Ads. Thus the possibility of getting a fair amount of conversions increases.

7.  Features on Subscription

Communicating the App features after opting for the app subscription model is one of the best ways to gain attention towards your app.

If you tell your app users about the additional features, tools or other important noticeable things that they would get to access after the subscription is the best way to convert your free app users into monthly app subscriber.

8.  Play Intelligently:

You should be able to know how to play smart. Avoid giving free versions of your app on different devices. On the contrary use this strategy later on.

Tell your users that with the subscription of your app, they can have access on various devices.

Key Point: Tell all your users about the benefits, features, additional tools, etc. that they will be missing out if they don’t opt for an app subscription model.

Few more motivational strategies as suggested by Priyanka Garg:

  1. Ask them to give their feedback on your app they are using.
  2. If your app has been recommended by users, then you can add up recommend features or reward points to your users.
  3. Go for the influencer programs and motivate them to share content about your app.
  4. Universal App Campaigns can be used for marketing the apps.
  5. A community around your app can do wonders adding a good initiative for your marketing strategy.

Few Facts that need attention:
To decide on pricing, keep these two factors in mind:

  1. Quality of app
  2. Category of the app.

According to stats by Google, if the app falls in the category of education, news and sports, then the subscription range falls in between $5 to $20. This is the current scenario in the US. They are charging in this range. Other ranges for other genres are given in the chart below:

You may have a different price range as per different parameters that you have decided. So it is absolutely fine to experiment on those parameters so that you can share your success with others.

The response of the App stores for App Subscription:
In the first year of subscription, Apple had a fixed plan for an in-app subscription model. The first year share is 70/30 where developers get 70% and Apple takes 30%. For the second year of subscription, it becomes 85/15 where developers take 85% and 15% for Apple. Moreover, the auto-renewing facility is with Apple. A notification is sent to the users when their subscription plan is near to expiry.

Read also: Is Mobile App Development A Monster Generator for 6 Figure Income?

Case Study:

1. Pandora:

A famous saying, “Slow and Steady wins the race,” describes everything about Pandora. In this case study, it is said that the subscription model has the capacity to increase in revenue through small increases.
Pandora’s user base is given below:

As per the figure, only 5% has an in-app subscription. Over the passing years, this has increased to 60% annually. The subscription revenue is 20%.

2. Headspace:

Headspace falls under the genre of health and wellness. The first thing that you will experience is a welcome mail with in-app messages. This messages basically includes information regarding the benefits of upgrading from a free to subscribed one.

Conclusion:

Going for an App Subscription model definitely proves one of the best tactics to generate handsome monthly revenue through apps.

But the factors like engagement rate with the customers, quality content, cross-platform messaging and many more remain a matter of concern for conversions where each mobile application development company is scratching its head.

I have provided a few details about the important factors that boost up the in-app subscription sales to the users. If you have anything in mind that I might have missed out, kindly share in the comments below.

looking-for-top-quality-wearable-app-development-services

Disclaimer: We at eSparkBiz Technologies have created this blog with all the consideration and utmost care. We always strive for excellence in each of our blog posts and for that purpose, we ensure that all the information written in the blog is complete, correct, comprehensible, accurate and up-to-date. However, we can’t always guarantee that the information written in the blog correct, accurate or up-to-date. Therefore, we always advise our valuable readers not to take any kind of decisions based on the information as well as the views shared by our authors. The readers should always conduct an in-depth research before making the final decision. In addition to these, all the logos, 3rd part trademarks and screenshots of websites & mobile apps are the property of the individual owners. We’re not associated with any of them.

Piyali Sarkar

Piyali Sarkar

Piyali, an M.Tech in CSE, has experience ranging from an assistant professor to creative writing in the local newspapers, she has stepped fully into the domain of mobile application development. Her writing can be said to be a combo of crazy thought process, efficacious vocab & sublime modus operandi which is required in any mobile app development company. In an app-centric world, having a hot app-o-lava in her mind, she loves sharing her diegesis.

Have an App Idea?

Get your free consultation now

Get Your Free 20-Minute Website Discovery Consultation

To explore how we can help you create a sales weapon that’ll capture and convert more customers, fill out your details below and we’ll be in touch within the next two hours.