💎 Growth Gems #20 - Gems from "Subscription Apps Fundamentals"
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Today's gems are mined from a live-only presentation at AGS Virtual Summit Berlin by Thomas Petit (Growth Consultant).
There are very different kinds of subscriptions, and the retention tactics and levers are entirely different for each subcategory:
Content - music, books, video, comics, news, etc. → retention lever is the amount of content you're offering
Motivation - health & fitness, dating, education (language learning, brain training) → retention lever is more about how you onboard people and re-engage them
Utilities - photo/video editors, dropbox, grammarly, etc. → retention depends more on the value you provide to users on a regular basis.
Subscriptions align users and developers' interests. People will keep paying if you keep providing them value. Example of Evernote: as you use it more, it becomes even more valuable and that's when the subscription model makes the most sense.
When looking at retention for your subscription apps, segment your users based on their subscription status (free users, trialists, paying users) and re-engage them accordingly. Because your retention curves are going to look very different depending on subscription status.
Pay particular attention not only to the LTV but also to when the money is coming back. You want to know your ARPPU but also when the money is coming in. Yearly subscription: all the revenue for the year comes in on the first day. Monthly subscription: maybe a higher LTV but you need to "finance" the cash flow several months ahead.
Iterate on your paywall itself but also optimize on what happens before users reach the paywall and all the communication before you show prices. How people reach the paywall can have at least as much impact.
Don't measure only the impact on your initial funnel, but also the long term impact. Measuring only the impact of paywall changes on trials and uplift is risky because forcing the conversion too much can hurt both long term LTV (renewals, refunds) and user retention.
Try to focus a lot on the experience you provide to free users. Focusing only on paid subscribers can have a negative impact on organic and ASO. You don't want to ignore 90-95% of your users.
Communicate clearly and carefully about the free trial. You might even want to avoid focusing too much on the free trial in external communications because it might create more bad reviews and worst retention from users that only want "free".
Value Optimization is rarely a good fit for subscription apps (vs. app event optimization) because you have low variance between users: they are either paying, or they are not. You do not have whales.