This week, the makers behind a popular iPad app announced a switch from a paid upfront to a freemium subscription business model, and in the process, they totally screwed it up.
I have nothing against subscriptions models for apps. I actually encourage it! Our own app Astropad Studio app is a paid subscription after making the switch a few years back. So I’m not writing this to pick on anyone, rather I think there are useful lessons for others making the switch to subscription. Let’s dive in...
Lesson 1: Be extra generous with your existing customers
Word of mouth is the most powerful marketing channel, full stop. Think about it, you probably value the opinions of your friends and family above anything you read online. If you know multiple people that recommend a product, you’re likely to buy it too.
That’s why pissing off your existing customer base is so dangerous. With any switch to subscription, some customers are going to be upset – consumers don’t like subscriptions, a topic for another article – but you want to minimize it as best you can.
So grandfather in existing customers. What exceptional deal can you give them? Be so generous that they will continue to spread how much they love your tool. Your original customers are what got you here, respect them or else.
Lessons 2: Don’t remove features with a switch to subscriptions
The worst thing you can possibly do to existing customers is to take away features they’ve already paid for and put them behind a subscription. Everyone hates that, don’t do it! An app maker that recently did this faced such intense backlash that they had to reverse course.
What I didn’t know until now, is that not only is this bad practice but it’s against App Store rules:
If you are changing your existing app to a subscription-based business model, you should not take away the primary functionality existing users have already paid for. For example, let customers who have already purchased a “full game unlock” continue to access the full game after you introduce a subscription model for new customers.
So if you remove features and put them behind a subscription, you could potentially be rejected by App Review as well.
A better alternative is to let users keep access to the features they’ve already purchased and make the new subscription features so compelling they can’t not subscribe! – You want to be adding not taking away with a subscription.
Lesson 3: Be very deliberate about your communication
Making the switch to subscriptions is not the time to move fast and break things. You need to be very methodical and deliberate. Don’t rush it!
When switching to subscriptions, talk to lots of people about it. You want to ensure that you don’t have any blind spots. Talk to some existing customers one on one, see how they react to the news. Put together a message announcing the switch, share it with your team and others you trust. Ask them what they take away from the message. Rinse and repeat this process until you’re happy with the reaction.
More apps should switch to subscription
Despite all of this, I still think consumer subscriptions are the right choice for most productivity apps on the market – paid upgrades would also be another good option, but I highly doubt Apple is ever going to give those to us. Just be careful when making the switch!
Hopefully, these lessons help you switch your app to subscriptions. ✌️
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