As early as 2020, Lexi Sydow has already said in her blog that “businesses are powered by mobile, but subscription models are what’s driving mobile dominance.” This opinion is still genuine in today’s mobile subscription world as subscription pricing models continue to popularize. For those who would also like to begin a mobile subscription business, we have prepared this guide for you on how to build a subscription pricing model.
What is Subscription Pricing Model？
A subscription pricing model is a recurring revenue model in which app users get access to content, services or premium features over a specific period of time by paying an agreed amount price. Usually, the subscription is auto-renewed at the end of its duration unless app users choose to cancel.
The subscription pricing model benefits both the app company and its users. On the one hand, app companies can accurately predict revenue, attract more users, decrease user acquisition costs and build stronger relationships with their users. On the other hand, app users can get access to the service at a more affordable price, enjoy premium support and even get features that can be adapted to their tastes.
However, if you want to keep your users subscribing, you have to regularly update your app with feature enhancements or expanded content. Because only ongoing value and innovative app experience can maintain active subscribers.
How to Build a Subscription Pricing Model for Mobile Apps
Before you build a subscription pricing model for your mobile apps, consider whether the subscription model is suitable for your products and services or not. Usually, products that customers need to continuously access are ideal for a subscription pricing model. When you finally confirm that you are going to build a subscription pricing model for your apps, here are some general steps:
1. Decide on the subscription offers.
Normally you offer several subscription options for users to choose from. So think about what the best subscription plan would attract users and nudge them to subscribers. Decide on detailed information about each subscription plan, such as name, price, and description.
2. Configure subscription plans
After you figure out what subscription plans you want to offer, the next step is to configure them on App Store Connect(for iOS) or Google Play Billing(for Android). Go through carefully the document and set up the subscription offers following the step-by-step instructions.
3. Connect with the billing system and build a purchase backend
Follow Apple’s billing client guide for iOS apps and Android’s billing client guide for android apps to connect the app with their billing client and better set up the purchase backend to validate receipt.
Building purchase backend can be a tough job and require continuing efforts on maintaining them when the app stores implement changes.
Luckily, our Appflow.ai software development kit (SDK) solution can serve as your purchase backend to validate receipts, manage user access and maintain them over time. If you want to save development resources and focus on building a better product, it can be a good choice to hire appflow.ai.
4. Submit for App Store Reviews
After setting up the purchase backend and testing it well, you should follow the app store review guides to see if there is something out of compliance. Try to fix the issue and get quick coveted approval.
5. Benefit from subscriptions
When you finally get approval from the app store, it is time to get recurring revenue from auto-renewable subscriptions. However, don’t forget to test the subscription plan you offer to get the best out of it.
The above are the general steps for setting up a subscription model for your apps. But how to ensure that your subscription-based app monetization model is successful? Here are some best practices for your reference.
Subscription Pricing Model Best Practices
Set a proper price for your subscription plan: Your price for your app should not be too low or too high. If you are not sure about how to price your apps, you could start with competitor analysis. And after you finally decide on the price, you should do more testing to ensure you are getting the best out of your app.
Show transparent prices to your users: When users come across a paywall, they must be clear about the subscription pricing and know clearly what features they will have access to after making a subscription.
Offer free trials and discounts to new users: Free trials and discounts are two great ways to attract more new users and entice them to subscribe and explore your apps at no cost. When they subscribe, there is a big chance for them to become long-time subscribers if your app provides great benefits for them.
Give users full rein on their subscription plan: Whichever subscription plan app users choose, they must have the option to upgrade or downgrade their subscription. Showing a button to enable them to do so gives them full control.
Provide various payment options: Some people may not have access to the single payment method you require. So they are of high possibility to quit even when they would like to make a subscription. Offering various payment methods can help reach a wider audience.
Use push notifications or in-app messages to entice users to upgrade: Push notifications and in-app messages are two effective methods to engage with users. You can utilize them to deliver special offers or discounts to users or notify them about new features or their subscription status at the right time. In this way, you have a chance to nudge the free user to subscribe or upsell your existing subscribers.
Identify the most lucrative subscription paywall: A paywall is a place where app users decide whether they subscribe or not. So it is rather imperative for you to decide what subscription plans to show on the paywalls that will generate the greatest revenue. Usually, you can not decide on this with just your instinct. So what should you do? By A/B testing of course.
A/B Testing for the Most Lucrative Subscription Model
Mobile subscription apps have proved that different subscription offers generate various revenue. Therefore, when you finish setting up the subscription model for your app, don’t just stop, cause there is another chance that may help grow further your app revenue——the most profitable subscription model.
Paywall A/B testing is the most common method for us to decide on the most beneficial subscription model. However, if you develop your own testing framework, it will require several months and a couple of developers working non-stop. Fortunately, there are some well-built frameworks that can be really helpful, for example, Firebase(free) or appflow.ai(paid, but with more useful features and deeper analytics).
Appflow.ai‘s paywall A/B testing tool allows showing different paywalls to a customized ratio of users at the same time without app release, which means you can do the subscription pricing models testing at the same time without waiting for app review. The truth about paywalls is that even minor variations will greatly impact app revenue. So you have to do A/B testing often to find out the better subscription model for your users. Another good benefit of appflow.ai’s paywall A/B testing feature is that you can show different paywalls to different segmented groups of users. This allows customizing prices for a specific group of users and thus may achieve better conversion.
Final Take Away
The mobile subscription business is continuing to blow. Its potential seems boundless. If you find out that your app is suitable for a subscription model, act on and make the best out of this subscription model.
Check out detailed steps for implementing subscriptions.