Which business model should I follow?

Question

khoury OP

Created Feb ’19

Replies 6

Boosts 0

Views 1.2k

Participants 4

Hey all,

I have an iOS app that has recently been updated to use subscriptions as the primary business model.

The subscription is for one-year, with an introductory free 7-day trial.

The previous business model was freemium.

Now, the business model is a hybrid of freemium and subscription + free trial. Since I am satisfied with the app reaching a status of a high quality product, my goal is now revenue growth.

I am considering removing the option for users to have a freemium version as an option, since we offer a 7-day free trial.

Essentially, users will enter the free trial as soon as they download the app, if they so wish to use it.

But, what's holding me back from deciding this type of model is that I've seen very few other apps do this. Most apps have a hybrid of freemium and free trial, which only makes sense if you wish to monetize with ads (which I don't with my app).

Right now, I have 97.5% of users who are non-paying, and I've made zero revenue from. There is little advantage to have most people use the freemium, regardless of the fact they may or may not share the app via word of mouth.

I can see removing freemium from my app being a good idea, since the app has great ASO and plenty of positive reviews for users to decide whether or not they would like to start a free trial. Also, the app is approaching 1M downloads, so there is promise of being popular.

Should I remove freemium and rely on a free trial to allow users to decide whether or not to purchase a subscription. Or, should I rely on growing the number of freemium users substantially, like millions, to make the 2.5% conversion rate work better for revenue growth.

Thanks,

Harry

Boost

Answer 1

KMT OP

Feb ’19

>Should I remove freemium

Don't assume that's an option for existing users. App Review tends to take a dim view when the dev takes something away that users have already been given.

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Answer 2

john daniel OP

Feb ’19

1) Release a new app in the store using the new scheme. If your current App is "MyApp", call this one "MyApp 2". Make sure to provide some new functionality that would merit the "2".

2) Release an update to your existing app that displays a start up dialog saying "MyApp 2 is now available!" with options of "Check it out!", "Ignore", and "Remind me later".

3) After updates seem to slow down on "MyApp", pull it from the store.

4) After a year or two, repeat the process with "MyApp 3" and/or "MyApp Pro".

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Answer 3

PBK OP

Feb ’19

> Most apps have a hybrid of freemium and free trial, which only makes sense if you wish to monetize with ads (which I don't with my app).

That's not true. The freemium model draws users into your app and lets them experiment with a fraction of the functions in the app. If they want more they pay for it. So in that sense it is marketing cost - and it costs nothing. Just be sure to inform users at the free level all of the great functions available if they upgrade. Hook them on your app and entice them to upgrade. If you want - add increasing offensive delays like "Please wait 10 seconds as we calculate a new XYZ - if you upgrade then new XYZ's will be downloaded in the background and you won't need to wait." Then, after the user has used it 10 times increase that to 20 seconds.

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Answer 4

khoury OP

Feb ’19

Hey John, that sounds simple enough!

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Answer 5

khoury OP

Feb ’19

That's a fair point about freemium as a marketing strategy. But the cost is that there are plenty of users that become fustrated and don't understand why they need to pay when it is freemium.

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Answer 6

PBK OP

Feb ’19

>there are plenty of users that become fustrated and don't understand why they need to pay when it is freemium.

They don't need to pay for the free features - those features are free. They need to pay for the premium features - those features are behind an IAP after, perhaps, a free trial period. That's why its called free(pre)mium.

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