5 Essential Strategies for Maximizing Mobile App Subscription Revenue

8 min readOct 5, 2023

Monetization is a crucial aspect of the mobile app industry that often takes a back seat to user acquisition. While acquiring new users is undoubtedly essential for app growth, it’s equally vital to have a well-structured and effective monetization strategy in place. After all, the success of a mobile app isn’t solely measured by the number of downloads but also by its ability to generate revenue and sustainably grow over time.

In this article, we will delve into five key strategies to enhance revenue generation through mobile app subscriptions. These strategies go beyond the conventional focus on acquiring users and shine a spotlight on the often underutilized potential within your existing user base. By optimizing your app’s monetization, you can unlock a significant revenue stream that might have been previously overlooked.

We’ll explore each of these strategies in detail, providing actionable insights and guidance. Whether you’re a seasoned app developer or a startup looking to maximize your app’s financial potential, these strategies will equip you with the knowledge and tools needed to thrive in the competitive mobile app landscape. So, let’s dive in and discover how to boost your app’s revenue through effective subscription-based monetization techniques.

1- Monetization vs. Acquisition: Balancing Growth Strategies

In the dynamic world of mobile apps, two fundamental pillars of success often vie for attention: user acquisition and monetization. While both aspects are integral to an app’s prosperity, it’s crucial to understand their respective roles and how they contribute to overall growth.

In the early stages of an app’s lifecycle, user acquisition takes center stage. Attracting a substantial user base is essential for gaining traction and visibility. A larger user base can lead to increased brand recognition, word-of-mouth referrals, and organic growth.

However, it’s important to recognize that user acquisition comes with associated costs. Marketing campaigns, advertising spend, and incentives to attract new users can be substantial. Moreover, acquiring users doesn’t guarantee that they will stick around or become paying customers. This is where monetization strategies enter the picture.

Studies, such as those conducted by Profitwell, shed light on the pivotal role of monetization in an app’s growth trajectory. Profitwell’s research findings indicate that a one percent improvement in monetization can result in four times more growth than a similar increase in user acquisition. This eye-opening statistic underscores the significance of monetization as a growth driver.

While user acquisition and monetization are often portrayed as opposing forces vying for attention and resources, they are, in fact, symbiotic. To achieve sustained success, it’s essential to strike a balance between these two aspects. Here’s how this balance works:

Initial Growth: In the early stages, user acquisition takes precedence. Attracting a critical mass of users is vital for your app to gain visibility and credibility.
Monetization Activation: As users come onboard, it’s essential to have effective monetization strategies in place. This includes offering value-added features, premium subscriptions, or in-app purchases.
User Retention: Retaining acquired users is often more cost-effective than acquiring new ones. By continuously delivering value and optimizing the user experience, you can increase user retention and, consequently, monetization opportunities.
Iterative Approach: Balancing user acquisition and monetization is not a one-time effort. It requires ongoing monitoring, analysis, and adjustment to adapt to changing market conditions and user preferences.

2- Finding the Area of Highest Impact: Unlocking Your Monetization Potential

The ability to identify and optimize the most influential areas within the monetization funnel can make the difference between moderate success and soaring profitability. To harness the full potential of your app’s monetization, let’s delve into the process of finding and leveraging these critical areas.

Charting the Funnel: The first step in this journey is to chart your monetization funnel comprehensively. This funnel typically comprises multiple stages, from user acquisition to conversion, and finally, retention and upselling. By visualizing this funnel, you gain clarity on the user journey and where revenue opportunities lie.
Leveraging Industry Benchmarks: Industry benchmarks are invaluable guides that provide insights into how your app’s performance compares to that of your peers. Benchmarks can reveal average conversion rates, subscription renewal rates, and other critical metrics specific to your industry. Access to this data helps you set realistic targets and identify areas where you might be underperforming.
Analyzing Actual Data: While industry benchmarks provide a useful reference point, your app’s actual data is where the real treasure trove of insights lies. Dive deep into user behavior patterns, conversion rates, and user drop-off points within your app. Analytics data can help you uncover which stages of the funnel are performing well and which ones need attention.
Identifying Weak Spots: Armed with the data and insights from your analysis, pinpoint the weak spots in your monetization funnel. These are the stages where users are dropping off or not converting into paying customers as expected. Weak spots can manifest as low conversion rates, high churn rates, or abandoned shopping carts in e-commerce apps.
Resource Allocation: Once you’ve identified the areas with the most significant monetization potential, it’s time to allocate your resources effectively. This may involve enhancing user experiences in these critical stages, conducting A/B tests to optimize conversion flows, or refining your messaging to encourage users to take desired actions.
Continuous Improvement: The process of finding the area of highest impact is not a one-time endeavor. It’s an ongoing journey of refinement and improvement. Regularly monitor the performance of the targeted areas, test new strategies, and adapt to changing user preferences and market dynamics.

3- Don’t Price Too Cheap: Unveiling the True Value of Your App

Setting the right price for your app subscriptions is a delicate balancing act. Underpricing your offerings is a common pitfall that can have far-reaching consequences. At TechAhead, we emphasize the importance of conducting user research to uncover the price thresholds that align with your app’s perceived value.

The Pitfalls of Underpricing: Underpricing occurs when app developers, driven by uncertainty or a desire to attract more users, set subscription prices lower than the perceived value of their offerings. While this may seem like a customer-friendly approach, it often leads to missed revenue opportunities and long-term sustainability challenges.
The Role of User Research: User research is the cornerstone of setting the right pricing strategy. Through surveys, interviews, and data analysis, you can gain valuable insights into your users’ willingness to pay, their expectations, and the perceived value they associate with your app. This data-driven approach helps you make informed pricing decisions.
Understanding Perceived Value: Perceived value is a critical concept in pricing strategy. It’s the user’s subjective assessment of the benefits and features your app provides compared to the price they’re asked to pay. By understanding what aspects of your app users value most, you can tailor your pricing to align with their expectations.
Optimizing Your Pricing Strategy: Armed with insights from user research, you can optimize your pricing strategy. This might involve adjusting subscription tiers, bundling features, or introducing tiered pricing to cater to different user segments. The goal is to find the pricing sweet spot that maximizes revenue without deterring users.

4- Don’t Price Once: The Ongoing Pricing Evolution

Pricing should never be a one-time decision in the fast-evolving world of mobile apps. To remain competitive and maximize revenue, it’s imperative to revisit your pricing strategy regularly. At TechAhead, we recommend revisiting pricing every six months to ensure it aligns with your app’s growth trajectory.

Monitoring Key Metrics: Regular price reviews should go hand-in-hand with monitoring key metrics. Metrics like average revenue per user (ARPU), conversion rates, and customer lifetime value (CLTV) provide essential insights into the health of your monetization strategy. Changes in these metrics can signal the need for pricing adjustments.
Balancing Act: Adjusting prices can be a delicate balancing act. Be prepared for potential trade-offs, such as short-term decreases in conversion rates when prices are adjusted upwards. While this may seem concerning, the overall lifetime value of customers often justifies these changes, resulting in higher revenue in the long run.
Adapting to Market Dynamics: The mobile app landscape is dynamic, with evolving user preferences and market trends. Regular price reviews allow you to adapt to these changes promptly. It’s an opportunity to respond to shifts in user behavior, competitive pressures, and emerging monetization models.

5- Segment Your Users: Tailoring Subscriptions for Maximum Impact

Segmentation is a powerful strategy for unlocking additional revenue streams within your user base. At TechAhead, we advocate for customizing subscription offerings based on user cohorts. These cohorts, such as power payers, average payers, and unlikely payers, have distinct preferences and willingness to pay.

Power Payers: Power payers are users who are highly engaged with your app and value its features. Tailor premium subscription offerings that provide enhanced value and exclusive features to cater to this segment. Consider options like premium support, early access to updates, or advanced features.
Average Payers: Average payers constitute a significant portion of your user base. Offer subscription tiers that align with their needs and budget. Ensure they perceive the subscription as a valuable upgrade rather than an unnecessary expense.
Unlikely Payers: Some users may be unlikely to subscribe due to budget constraints or a lack of interest in premium features. For this segment, explore alternative monetization strategies, such as offering a limited free trial, introducing ads, or microtransactions that allow them to pay for specific content or features.

Conclusion

In conclusion, pricing strategy is a dynamic process that requires careful consideration, ongoing evaluation, and user-centric customization. By balancing user acquisition with monetization, identifying impactful areas within the funnel, setting appropriate prices, revisiting pricing regularly, segmenting users, and prioritizing user experience, you can unlock your app’s full revenue potential.

At TechAhead, we leverage our expertise to help you find the optimal pricing strategy for your app, ensuring it aligns with user expectations, maximizes revenue, and supports long-term growth. Our commitment to data-driven decisions and user-centric approaches empowers your app to thrive in the competitive mobile app landscape.

Discover how our expertise in mobile app development and monetization consulting can enhance your app’s success. To learn more, schedule a call with our monetization experts. Our team is ready to assist you on your monetization journey.