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User Acquisition Approaches for Subscription Apps

Subscription-based apps depend on users subscribing to avail of the services provided via an app. Some popular Subscription Apps are Netflix, Amazon Music, YouTube Music, Crunchyroll, and Twitch. The apps' success depends on how many users subscribe and use them. So, the acquisition of users is a significant factor in the success of a Subscription App.

What is User Acquisition for Subscription Apps?

User Acquisition is the process of gaining new users for a product or a service. The goal of any application is to generate revenue. For that, the product needs to reach the target users. User Acquisition is a never-ending cycle of data analysis, creative idea development and integration, and testing. Subscription-based apps provide a higher opportunity to raise revenue and deliver more consistent income.

Why Does User Acquisition Matter for Subscription Apps?

The revenue model of a subscription app depends on the number of premium users that use the application. It is vital to bring in new customers to increase revenue for a subscription app. Generating more revenue means generating more profits. Active user engagement and crowd build trust around the application and bring in new users. In recent years, the attention span of users has drastically reduced due to the availability of alternatives, so acquiring new users is valuable. At the same time, users tend to uninstall or stop using the app. Retargeting and re-engagement of users become more complex than usual. Therefore, acquiring the right users in the first place would prevent this. 

User Acquisition Approaches for Subscription Apps

  • App Store Optimization: App Store Optimization is an effective process of improving the visibility of an application by carefully following guidelines and policies set by the app store. A company uses ASO to rank its application on the top in the app store's search results. App Store is the first place customers search to find the applications that solve their problems. So it is comparatively easy to attract users to the store rather than spending the budget on marketing later. Commonly used App Store Optimization parameters include App name, App Subtitle, App URL, Keywords, Number of Installations, Reviews and Ratings, App Updates, and In-app Purchases. 
  • Set up a Free Demo: Users need to be provided with the premium content to know what they are subscribing initially. The concept of 'play before pay' plays a vital role in acquiring valuable users. A free demo lets users know what they are paying for and enables meritocracy.
  • Setting up Freemium Model: A freemium model is slightly different from providing a demo. The freemium model frequently works for online firms with low user acquisition costs but high lifetime value. Users are given free access to any service's fundamental functions and subsequently charged for upgrades to the package that comes with it.
  • Referral Codes: Refer-a-friend is a perfect marketing strategy to increase the application reach exponentially. One of the disadvantages of referral code marketing is that most of these users do not subscribe to the application, may not be the target users, and are here for incentives.
  • Paid Media Marketing: Paid Media Marketing is a digital advertising strategy that increases an application's reach through website ads and social media ads on Facebook, Instagram, and other platforms. These advertisements range from simple text messages to short video promos.
  • Own Media Marketing: Own Media Marketing is also a digital advertising strategy that utilizes its brand media to promote its product by providing blogs, tutorials, and advertising its new products. These blogs and tutorials are search engine optimized and solution-oriented. Most of them provide their application as the solution to the problem. 
  • Getting User Feedback: Getting user reviews and analyzing the application based on the suggestions they provide, bugs they want to fix, and new features they recommend help improve user satisfaction and understand the customer base better. So it is vital to get feedback from the user once in a while. Most users in the app store usually check what the other users have rated and commented about the product before downloading.
  • Email Marketing: Smart links sent via emails can be reminders for continuing/starting subscriptions. Customers on the email list can be informed about new products, deals, and other services through email marketing. Educating the audience about the benefits of the brand or maintaining their interest between transactions can also be a more subtle way to market.
  • Influencer Marketing: Influencer Marketing is a type of marketing by celebrity endorsement and places it into a modern-day content-driven marketing campaign. Allowing celebrities to promote by providing feedback or making them use the application in their content will encourage their followers or subscribers to get an insight into the products and buy it.
  • Discounted Platform Marketing: Discount Marketing is a marketing technique to attract customers by decreasing the price of goods or services for a limited time. Popular discount types include flash sales, holiday discounts, and sign-up offers. Discounts are a successful strategy as it incentivizes customers and creates the prospect of purchase.

How to Measure User Acquisition for Subscription Apps?

There are many metrics to measure the success of user acquisition strategies. Let us look at some of the popular ones.

  • Conversion Rate: The most common method to evaluate user acquisition is conversion rate. The conversion rate is the percentage of users who signed in that subscribed to the application.
  • LTV: An average payment per user per month/churn rate for the period.
  • Cost Per Install: App developers pay each time a user installs their program after seeing their advertisement on their mobile device using the cost-per-install (CPI) pricing model. CPI is a popular pricing scheme used for mobile apps.
  • Average Revenue Per User: The average amount of value or revenue earned per user through in-app purchases, ad impressions or clicks, subscriptions, paid downloads, or other types of monetization is called Average Revenue per User.
  • Churn Rate: The number of subscribers who unsubscribed or stopped paying over a specific period. This metric gives insights into outdated customers and lost customers.
  • Retention Rate: The number of users who return or return after a specified period. Retaining users means you've created a helpful app since people use it frequently or constantly. Here is the formula for retention rate:

                   Retention Rate = ((CE - CN) / CS)) X 100

                   CE = customer count after the term

                   CN = the number of new customers gained within this time period.

                   CS = the number of customers at the beginning of the term customers who don't use the service anymore.

Manually performing these measurements is practically difficult. In-App Subscription Analytics Tools simplify this process for the applications to calculate the measures.

In-App Subscription Analytics Tools

In-App Subscription is a feature that allows customers to pay a subscription to access premium content or features. In-App Subscription Analytics Tools simplify implementing, managing, and evaluating in-app subscriptions, focusing on developing the business and increasing income. Appflow.ai is a popular In-app Subscription Analytics Tool that can assist you in increasing revenue and subscribers. It collects data from your app, such as trials, installs, purchases, income, refunds, and much more, to produce relevant app analytics. An In-App Subscription Analytics Tool improves the sales performance model and increases your monthly subscription income, various data states and subscriber groups are compared and evaluated using multiple data relations.

in-app subscription data tracked by appflow.ai

Final Take Away 

The user acquisition process is essential in the operation and success of Subscription Apps. The discoverability of an app is also directly proportional to the effectiveness of its user acquisition strategies. The efficiency of these strategies can be measured and used as a reference for future strategies. With new products and applications coming up in the market, the plans for user acquisition have also evolved. It is safe to say that a Subscription App can become successful through a creative user acquisition strategy. 

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