2021 was a record-breaking year for apps, with total global consumer spending across Google Play and the App Store seeing a 21% growth compared to 2020. According to the end of year report from App Annie, downloads grew 8% to 140 billion, and spending hit $135 billion, up from $112 billion the previous year.
What’s more, subscription-based apps are becoming standard among mobile users. The five highest-earning apps use this model, where users pay monthly to maintain or upgrade the app’s features and benefits. Unsurprisingly among the top-earning apps are YouTube, Disney+, Hulu, and Pandora, indicating that consumers are willing to pay for their entertainment on subscription.
The Expansion of the Subscription Economy
Today, companies across all industries are starting to use subscriptions to drive new revenue lines. For example, meal kit services like BlueApron simplify families’ weekly food prep and grocery shopping. And last year, the delivery app Deliveroo launched a first-to-market unlimited free delivery subscription.
Similarly, the rideshare app Lyft offers a subscription plan where all car trips taken over the month are discounted at 15 percent along with other priority benefits. So, we are undoubtedly seeing the subscription economy expanding beyond popular streaming services.
If your app offers a freemium product or a time-boxed free trial, you likely have one goal: converting those trial users into paid customers. Of course, that’s easier said than done. Asking people for their email address in exchange for a free product is easy, but asking them for money to continue using it—that’s the hard part.
So, what can you do to convert your app users from a free trial to a paid subscription? This article discusses how you can provide an app experience your users are willing to pay for.
Gather Data to Discover Why Users Don’t Convert
On average, only 25% of free trial users convert into paying customers. Therefore, it’s crucial to determine why your users choose to stay on the free version rather than move to a paid subscription. When a user’s free trial ends and their subscription is discontinued, use the opportunity to ask them why they are leaving.
This doesn’t need to be an onerous task. A short survey triggered as part of the in-app unsubscribe process will help you understand user behavior. Once you gather enough data, you can start identifying why your free trial users are failing to convert. You can then use this data to resolve any issues and improve the user app experience.
Does your upgrade offer add real value to your users? Take Uber, for example—their Uber One subscription is designed to give frequent users clear monetary rewards every time they order. For $9.99 per month, users get 5% off rides and deliveries, a $5 Uber credit if your delivery is late, and an unlimited $0 delivery fee on deliveries and groceries.
Essentially, a frequent user could save more by upgrading to the paid plan than if they continued as a pay-as-you-go customer. This is where your data can be powerful—find the cohorts of your audience who would benefit from upgrading and communicate these savings to them. If your messaging clearly outlines the added value from upgrading, there is no reason why they shouldn’t convert.
This is where your data can be powerful—find the cohorts of your audience who would benefit from upgrading and communicate these savings to them.
Deliver Payment and Upgrade Prompts
Deciding when to ask users for their payment information during a free trial can significantly impact conversion rates. When a user can sign up without adding their payment details, the average conversion rate is 25%. If a user must provide a payment method to access the free trial, this increases to 60%.
However, this approach could discourage users from signing up for a free trial, so it’s important to find the most optimized model based on the nature of your app. Of course, excluding a payment method is an easier process for the user and will encourage more initial sign-ups.
A strategically designed payment prompt can be the key to engaging—and ultimately converting—free users into paying customers. Identifying when the user is likely to find upgrading useful and enticing is crucial.
Spotify does this particularly well. The music streaming service allows freemium users to skip six songs per hour. When they exceed this limit, they are prompted with an in-app message to upgrade to a premium account. Spotify presents the message when it knows the user wants access to a feature only available on the premium version. But rather than the user feeling hindered, Spotify’s messaging creates an opportunity - “You discovered a Premium feature. Upgrading to Spotify Premium will unlock it”.
Whether your upgrade prompt is a subtle reminder or a paywall that restricts actions outright, they all need to pique the user’s interest. So, it’s important to find that exact optimal time to convert. Prompts work best when users feel they are making a choice to pay because they’re enjoying your product and see the value in upgrading—not because you told them they have to.
Provide a Stellar Onboarding Experience
The app onboarding process has become a huge factor in retaining users past the trial period. A customer’s experience shortly after installing your app can be the difference between a one-time user and a loyal subscriber, so it’s essential to create a seamless first impression from the moment of downloading.
Is it clear how your app solves your users’ pain points early on? Many apps struggle to communicate their core benefit during onboarding. Gradually introduce your users to your app’s key benefits and features, clearly demonstrating its value from the start and being transparent at every step.
A clever move by the language learning platform Duolingo allows users to try the app before committing to entering their details and creating an account.
By beginning the experience with a core product feature, users quickly understand the value the app has to offer and are already engaged upon registration.
Once customers have experienced firsthand how your app solves a pain point, it’s easier for them to imagine how paid features will enhance the experience.
Subscription Optimization with Swrve
If you’re successfully encouraging people to sign up for a free trial of your app, your marketing efforts are paying off. However, persuading trial users to become paying customers is where the revenue lies.
This is where Swrve can help. With expert marketing and technical services, we help brands create dynamic campaigns that onboard, retain, convert and monetize for faster growth and higher customer lifetime value (CLV).
To learn more about how you can turn your trial users into paying customers, reach out to our team today.