First-Ever Subscription Apps Report Suggests a Low-Cost Rate May Reel in New App Subscribers, But a Higher Price Keeps Them Engaged

Liftoff, the leader in mobile app marketing and retargeting, today released the first-ever report dedicated entirely to trends around subscription apps. The surprising data shows that setting subscription costs too low might actually lose otherwise-loyal app users. Additionally, the report looks into which price group converts users fastest, and highlights untapped potential in the male subscriber base.
 
Liftoff draws from internal data collected from 45 subscription apps between June 2016 to June 2017. The study analyzed data across more than one billion ad impressions to find the following:
 
More is… More?
Liftoff divided all subscription apps into three distinct categories based on cost-per-month -- low: $.99 to $7; medium: $7-$20; and high: $20-$50. They then examined the rates at which users subscribed in these three sub-groups and found, surprisingly, that apps in the medium price range ($7-$20) have the highest install-to-subscription rate of the three price groups at 7.16 percent, and the lowest cost to acquire a subscriber at $106. In fact, apps that fall in the medium price range see five times more conversions than low-cost subscription apps.
So why aren’t low-cost subscription apps seeing the most conversions? It’s possible that people simply don’t like to give up on things into which they’ve already sunk time and money; since low-priced apps require considerably less financial commitment, this need to persist isn’t as prominent.
Liftoff’s data indicates that subscription apps may do better to charge a higher price -- but don’t overdo it: apps in the highest cost range see a drop-off in conversion rates, averaging at just 0.73 percent.
Time is Money--Which Price Range Garners the Quickest Conversions?
As the saying goes, “time is money”--so it’s no surprise that the longer it takes a mobile user to get through the funnel from install to subscription, the less likely it is that they will go on to subscribe.
 
Predictably, apps at the low end of the pricing scale took the shortest time to convert users, with users taking all of 15 minutes to decide whether or not to open up their wallets and pay a monthly fee. Since it’s not a huge investment, there is not a lot of thought preceding action when it comes to low-cost subscriptions. For context, apps at the high-end of the pricing scale have to wait a whole 22 hours on average before a mobile user will commit to a subscription.
 
However, Liftoff’s data did reveal an interesting trend when it comes to conversion times for medium-cost apps: despite the fact that users are asked to shell out more money, those in the mid-range price group are not far behind the low-cost group. Rather, medium-cost apps lag only 10 minutes behind low-cost apps, with users taking 25 minutes on average to move from install to subscription.
 
Mid-range apps high conversion rate makes it clear that this group has a dedicated user base. For mobile marketers, better engagement and re-engagement tactics may have the potential to shave precious minutes off the install-to-subscription conversion time, and thus gain even more loyal subscribers.
 
These Women Ain’t Cheap--Get More Bang for Your Buck with Male Users
In a gender breakdown, the data shows that women are more likely to install and subscribe to an app, but this increased engagement comes at a price--literally. It costs $4.43 to acquire a female who will install the app--14.3% more than the cost to acquire a male. And the expenses don’t stop there, as the cost to acquire female users who then go on to subscribe is an additional 14.4 percent more than that of their male counterparts.
 
When it comes to subscription apps, male users appear to be the low-hanging fruit for mobile marketers. Men are the less expensive gender to acquire, yet convert at a rate similar to that of female users. As such, marketers should direct more efforts toward male users, a group that is less expensive to acquire, but converts at a rate similar to their fairer counterparts.
 
To read the full report, please visit: http://info.liftoff.io/2017-edition-mobile-subscription-apps-report
 
Methodology
The 2017 Subscription Apps Report by Liftoff draws from Liftoff internal data from June 2016 through June 2017. This data spans 1,051,355,179 ad impressions across 14,015,738 clicks and 520,792 app installs across 45 subscription-based apps. The report tracks the cost and conversion rates around the subscription and breaks down data by platform (iOS and Android), user demographics and app category.
 
About Liftoff
Liftoff is a performance-based mobile app marketing and retargeting platform which uses post-install user data to run true cost-per-action user acquisition and retention campaigns. Powered by advanced machine learning and lookalike targeting, Liftoff campaigns are optimized to drive actions beyond the install, like booking a hotel, making a reservation, or renewing a subscription. Based in Palo Alto, CA, Liftoff works with the leading app publishers and brands.
 

Contact Information

Lauren Graffort

Senior Account Manager

VSC for Liftoff

lauren@vscconsulting.com