Optimize subscriptions for success: acquisition

Hello everyone. I'm excited to share some ideas around optimizing your subscription for success using the App Store's features to help you improve your subscriber acquisition.

I'm Meghana, and I'm part of the App Store Scaled Engagement Team. Today's session begins with an overview of acquisition offers and a recap of the tools the App Store has available to stand them up. I'll then spend some time walking through different acquisition strategies to consider that utilize these features.

I'll wrap up by discussing engineering considerations.

Okay, let's get started.

The App Store is the world's safest and most trusted app marketplace serving over 650 million visitors each week across more than 175 storefronts.

Customers trust that apps and subscriptions on the platform are held to high standards for privacy, security, and content, and we now have more than 1 billion active paid subscriptions across Apple services. Today, I'll share some sample strategies that can help you attract customers to your subscription service. As a reminder, let's review the two subscription offer features that can be used for acquisition.

Introductory offers is the feature that allows you to set a standard introductory price for new subscribers, shown here as one week free before the subscription auto renews into the standard paid price.

Offer codes takes the functionality of introductory offers a step further allowing more flexibility for how you merchandise your offers both inside and outside of your app, shown here, the custom code NEWYEAR unlocks a special offer inside the app, and in fact, 60% of active paid subscriptions on the platform first began with an intro offer, so these can be quite powerful but how do you know what to offer new customers? There are three different discount types that you can choose from: free trial, which gives customers free access to your subscription for an allotted period of time before they're billed, pay upfront, which gives customers a one-time discounted purchase for a period before renewing at the regular rate, and pay as you go, which gives customers multiple renewals at a discounted price before renewing at the regular rate.

Keep in mind that offers should always be utilized as part of a great customer experience. Apps should never attempt to trick users into purchasing a subscription under false pretenses, cheat users with irrationally high prices, or engage in other scammy behavior.

Apps must also provide ongoing value to customers in order to offer auto-renewing subscriptions.

Looking at a breakdown of the discount types redeemed by currently paying subscribers in all territories outside of Greater China, we see that nearly all of them began with a free trial. But when we look at a global view, you can see that nearly a quarter of active subscriptions began with a paid offer, either pay upfront or pay as you go.

In addition to their popularity in markets like Greater China, where free trials are uncommon, paid offers can also be useful for apps with strong brand recognition or specific content licensing considerations.

Free trials are popular because they allow customers to sample a subscription service at no cost and are therefore a great tool for demonstrating the value of your service.

Let's review some trends that we observe when looking at how developers are using free trials today.

The length of free trial offered is one of the areas where we see some differences. We find that at a platform level, the popularity of trial lengths that developers use varies based on their apps category.

For example, entertainment, social, music, and book apps tend to over-index on one-month free trials.

Apps in the health and fitness, productivity, education, and weather tend to use week-long trials more heavily and three-day trials are most popular amongst photo and video, games, utilities and business apps.

We also observed some trends across the popularity of trial lengths that developers use based on the region they're offered in.

Monthly trials are most commonly offered in the US, Canada, Europe, Australia, and New Zealand, whereas Greater China, Japan, and LATAM all over-index in providing seven-day trials, and three-day trials are most popular in Southeast Asia and Pan EMIEA.

Keep in mind that this data is directional and you should always test and evaluate what makes most sense for your specific app and service.

With some of the basics of acquisition offers under our belt, let's dive a little bit deeper and explore how offer tools can be used to support some sample strategies.

To approach this, we've organized these strategies by onboarding and marketing, two areas that you should be thinking about when developing your subscription. For each of these, we'll provide some strategies to consider and show you how to use the App Store's offer features to create them. So let's begin by discussing some ways that you can optimize your app's onboarding to help you introduce your subscription to new users. One of the benefits of using an introductory offer is that it gives customers an accessible way to sample content before becoming paid subscribers.

When customers are in this trial period it's helpful to keep them engaged and exploring of the value of your service.

In-app messaging and push notifications are tools that can help you reach these new customers during their intro offer period.

Remember that customers must opt in to receiving push notifications from your app.

Let's take a look at an example.

Here you can see how the hypothetical app Ocean Journal offers to remind customers when their trial is ending to encourage them to take advantage of their remaining days of service. You can take this a step further by providing a timeline to customers before they subscribe to highlight key days to keep in mind throughout their free trial. This allows them to know exactly when they'll be charged. When used alongside notifications, timeline or countdown messaging can help customers comfortably explore your service and understand its value proposition so they can make an informed decision about becoming a paying subscriber at the end of the free trial.

Users who download your app have different interests and ambitions. When onboarding new users you may want to learn a little bit about them so that you can tailor your content and messaging to their needs, but do keep this short and sweet. A good rule of thumb is to provide onboarding that helps people enjoy your app, not just set it up. You might also consider using this information to surface and distribute offer codes for acquisition offers tailored directly to a customer's motivations. Here's an example of how personalized offer messaging might look with Ocean Journal. Here, the app has included a question in their onboarding flow that helps them understand their customer's interests. This will help them better customize their app's experience. In the question shown here, they're looking to understand a user's surfing experience.

If a user indicates that they're new to surfing, Ocean Journal can consider surfacing contextualized messaging like this "Practice makes perfect" copy alongside an offer code to help encourage users to commit to using the app to learn the sport. Next, consider offering longer-term subscription plans as part of your subscription offering. Some of your customers may quickly understand the value of your service and may be interested in committing to a longer term upfront, especially when the option to do so is provided at a discounted price.

When presented alongside clear messaging and an understanding of a service's value proposition, longer-term SKUs can be an effective way to provide customers with long-term value.

Across the platform, we observe that yearly and half-yearly SKUs are the most popular long-term offerings amongst customers today.

And remember, you can still provide intro offers on these longer terms to provide an opportunity for customers to try out your app for free or at a reduced price before the subscription renews at the standard rate. Here you can see Ocean Journal subscription options. They have both a yearly and monthly term available and use the intro offer feature to provide users with a seven-day free trial. They offer a 33% annual discount on their yearly SKU compared to monthly, so customers who choose yearly get an entire year of service for the price of eight months.

In turn, this discounted offering is of benefit to Ocean Journal as it enables them to engage and retain their customers for a longer period of time than they might on a monthly SKU.

Here are some KPIs to keep in mind when developing these onboarding strategies. Consider monitoring your introductory offer conversion rate to understand how many customers convert to paid subscribers after their introductory offer period, retention rate can help you understand the amount of customers that renew their subscriptions, and tracking subscription activations can help you evaluate the total number of new customers subscribing to your service. Now let's talk about some ways that you can market your app to drive new-user acquisition.

As discussed earlier, offer codes is a feature that helps you reach potential customers through online and offline marketing channels outside your app. While you're likely already using your own marketing channels to help customers discover your app and drive downloads, you can now use them to help drive new subscription starts with offer codes. You can even customize offers for each of your different marketing audiences.

For brand-new users, offer codes gives you the ability to surface offers before a user even downloads your app and the redemption flow will automatically prompt users to install it if they don't already have the app on their device.

Surfacing acquisition offers outside of your app is an efficient way to utilize paid media channels as a means to drive customers directly into your subscription funnel.

Here you can see how Ocean Journal is using an offer code advertising a 50% discount off the first month of service using the code SUMMERWAVES.

We recommend testing and tailoring the messaging of your campaign so that the promotion reaches and is relevant for your intended audience. If you'd like to distribute offers through offline media channels, consider using offer codes to promote compelling offers through events or out-of-home, for example, flyers or outdoor advertising.

And finally, peer-to-peer member referral programs are another effective way to reach new audiences and can be executed using offer codes. These programs allow your current customers to refer their friends to your subscription service and invite them to take advantage of special member offers. Member referral programs can be very effective user-acquisition drivers for developers of all sizes and can generate new leads at a lower cost-per-acquisition. Let's take a look at how this could work in application. Here you can see the referrer's journey. Ocean Journal is prominently promoting their member referral program on the app's first screen. Once a customer taps on invite a friend, they're then prompted to share a custom offer code via iMessage. The code and copy is pre-populated by the developer so all the customer needs to do is enter their friend's contact information and hit send. Once a referred user receives the iMessage, they can tap the link and be taken directly into the offer code redemption flow to begin their subscription. In a little bit I'll walk you through the complete redemption experience that a customer sees. When implementing these marketing strategies that utilize offer codes, consider evaluating the total number of offer code redemptions to see how many users are activating your offer. Additionally, monitoring offer code conversion rate will show you how many customers that begin their subscription with an offer code convert to fully-paid subscribers. Note that all the KPIs mentioned in today's presentation are available for your reference in Sales and Trends. In this section, I'll cover the best practices you'll need to consider when implementing these acquisition strategies into your app.

Let's take a look at one acquisition strategy example for each of the subscription offers, as well as what you'd need to consider when planning and implementing the subscription offers into your app and server. When providing introductory offer for a longer term on subscription plan, something that you'll need to consider when merchandising an introductory offer is that a customer may have previously redeemed an introductory offer and may not be eligible, so this copy will need to be dynamically merchandised to only eligible customers. This will help you to ensure that the merchandising is in sync with the App Store payment sheet. Let's see how you can do that. With StoreKit 2 you can check customer's eligibility on device by using the isEligibleDorIntroOffer Property.

The value for this property will return true if the customer's eligible for an introductory offer per subscription group. Optionally, on server side, you can use either JWSTransactions, available with the history API and check for the field offerType = 1, or use the latest receipt info array to check for the field is_trial_period and is_in_intro_offer_period. This will help you determine if an intro offer was consumed. If any of these fields indicate that the customer has not previously redeemed an introductory offer, then you can merchandise them the introductory offer.

Now to merchandise offer detail accurately and verify if your products in App Store Connect have the introductory offer available, you can do this with introductoryOffer property for StoreKit 2 and introductoryPrice property for original StoreKit. If they're available, the introductory offer details are returned.

StoreKit will prevent you from merchandising an offer that is not available.

It is important that this is not hard coded and you should instead leverage StoreKit, which uses the start and end date configured in App Store Connect.

To speed up your testing in Sandbox, and to avoid creating multiple Sandbox Apple IDs, you can take advantage of the reset eligibility feature in the Sandbox subscription management page. This can easily be accessed within your app if you implement the showManageSubscription method. Otherwise, you can navigate to your Sandbox Apple ID in App Store settings. For more information on testing best practices for Xcode and Sandbox enhancements, you can check out the introducing StoreKit Testing and Xcode session on the Apple Developer website.

Now, let's take a look at the personalized messaging strategy example. We're using offer codes as our recommended tool. This is a great feature for two reasons. First, it'll provide you with the flexibility to create multiple offers, and second, you can leverage your existing SKU and subscription group.

Let's walk through the complete redemption flow. You can embed the offer code link in claim offer button once the customer taps on it.

They'll be presented with the App Store offer redemption sheet which will represent the configured offer code details in App Store Connect.

Now, when the user taps on redeem offer, they will be provided with payment confirmation sheet and the transaction will be processed once the customer completes the purchase.

After successfully completing the purchase, the customer will be presented with the offer redemption message. Now, you need to ensure that your app handles external transactions gracefully and provides a smooth onboarding experience. To do this, you can use StoreKit 2 Transaction.updates, and for original StoreKit, it would be SKPaymentTransactionObserver.

These are critical to be initiated at app launch because offer code redemption can occur outside of your app.

It's also important to call finish() transaction after products or services have been delivered to the customers. These unfinished transactions will remain in the queue to help your app keep track of any purchases that are yet to be delivered to customers.

This is also critical in case there was any interruption on device. You can do this with StoreKit testing on Xcode and iOS 15.4 and later. The supported redemption experience uses the presentCodeRedemptionSheet(). If you're not familiar with StoreKit testing with Xcode already, it allows you to test fully offline without App Store Connect. You can create and manage your in-app purchase locally in the StoreKit configuration file, where you can also set up subscription offers such as offer codes. This will allow you to test a successful redemption and how your app handles new transactions as a result of an offer code redemption. On backend systems, you can easily identify offer code redemptions using JWSTransactions which will contain offerType value equals 3 and the offerIdentifier. The offerIdentifier will contain the value which you configured in App Store Connect when setting up the offer code, and you will also receive the notification type OFFER_REDEEMED in near-real time when the customer redeems an offer.

For more information on offer codes, you can check out our session Subscription Offer Codes on the Apple Developer website. Next, on the reporting side, we have a report for subscription offer code redemptions and App Store Connect Sales and Trends.

This report contains all offer codes that have been redeemed, whether they're in effect currently or will be at the next billing period.

The offer code redemptions are aggregated by territory and the offer code column includes specific custom codes, while for one-time codes, it'll remain blank for customer privacy.

For more information on getting started with subscriptions or details about our subscription acquisition tools, introductory offers, or offer codes, you can visit our auto renewable subscription documentation on the Apple Developer website as this contains all resources and applicable links for your reference in one place. Thanks for watching.