App Subscription Business Model- A new way to maintain apps sustainability
Usually 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 it 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.
There is flooding of apps in the mobile market.
The apps have a short lifetime. To survive in this cut-throat competition, it’s necessary to work upon customer acquisition which is 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 a subscription for your app, 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:
- Ballooning of average revenue per user(ARPU) concerning the billing regularly.
- It 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.
Eight steps to increase the subscriptions
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 model.
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.
It 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 drive but need to check the graph of your in-app subscription.
The solution for this is using A/B testing and Multivariate Testing.
It 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, system test different combinations of the same message. For instance,
3. No platform limit for Messaging
To make the concept short and straightforward, 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.
To know more about this concept, you should focus on Finding App Developers from eSparkBiz, a reputed IT organization. He/She will be able to guide you regarding that.
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. Materials 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 version.
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 substantial cuts.
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 to 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:
- Ask them to give their feedback for the app they are using.
- If everyone recommends your app, then you can add up recommend features or reward points to your users.
- Go for the influencer programs and motivate them to share content about your app.
- You can use Universal App Campaigns for marketing the apps.
- 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:
- Quality of app
- 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. It is the current scenario in the US. They are charging in this range. Other varieties for other genres are as given below:
You may have a different price range as per different parameters that you have decided. So it is okay 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 make 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.
A famous saying, “Slow and Steady wins the race,” describes everything about Pandora. In this case study, experts are saying that the subscription model can increase revenue through small increases.
Pandora’s user base is as shown 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%.
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 includes information regarding the benefits of upgrading from a free to subscribed one.
Going for an App Subscription model 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 companies providing App Development Services 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.
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