Optimize subscriptions for success: acquisition

Bryan Eisenstadt: Thank you for joining today's session. We're excited to share some ideas around optimizing your subscription for success using the App Store's features to help you improve your subscriber acquisition. Let's begin with a brief introduction. I'm Bryan and I'm part of the App Store Monetization team based in Cupertino. Hemant Sawle: And I'm Hemant, a developer advocate on the App Store Commerce team, also based in Cupertino. Bryan: 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. We'll then spend some time walking through different acquisition strategies to consider, that utilize these features. And then I'll hand it over to Hemant to discuss engineering considerations. So let's get started. The App Store is the world's safest and most trusted app marketplace, serving over six hundred million people each week across more than 170 countries. 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 785 million active paid subscriptions across Apple services. Today, we're going to 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 "1 WEEK FREE," before the subscription autorenews into the standard price. Offer codes takes the functionality of introductory offers a step further, allowing more flexibility for how you merchandise offers both inside and outside your app. Shown here, the custom code "NEWYEAR" unlocks a special offer inside of the app. And in fact, 60 percent 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 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 up front, which gives customers a onetime 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 offer should always be utilized as part of great customer experiences. 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 autorenewing 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 the global view, you can see that nearly a quarter of active subscriptions began with a paid offer; either pay up front 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 we observe when looking at how developers are using free trials today. The length of the 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 app's category. For example, entertainment, social, music, and book apps tend to overindex on one-month free trials. Apps in health and fitness, productivity, education, and weather tend to use weeklong 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 overindex in providing seven-day trials. And three-day trials are most popular in Southeast Asia and Pan EMEIA. 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 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 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 new customers during their intro offer period. Remember that customers must opt into 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 about them so 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 can 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 so they can better customize the customer's app 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 be interested in committing to a longer term up front, 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. 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's 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 percent 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 a benefit to Ocean Journal as it enables them to engage and retain customers for a longer period of time than they might on a monthly SKU. And 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 the 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 you can market your app to drive new user acquisition.

As discussed earlier, offer codes is a feature that helps you reach potential subscribers 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 app 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 give 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 in their promoted tweet, advertising a 50 percent discount off of 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 like to distribute offers through offline media channels, consider using offer codes to promote compelling offers through events or out of home, such as on printed materials like flyers or in 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 a very effective user acquisition driver for developers of all sizes and can generate new leads at a lower cost per acquisition. Here's 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 prepopulated 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 text, they can tap the link and be taken directly into the offer code redemption flow to begin their subscription. In a little bit, Hemant will 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 began their subscription with an offer code convert to fully paid subscribers. All of the KPIs mentioned in today's presentation are available for your reference in Sales and Trends. And this concludes the first two parts of today's session. I'll now hand it over to Hemant to discuss engineering of these features. Hemant: Thank you, Bryan. In this section, I'm going to cover the best practices you'll need to consider when implementing these acquisition strategies into your app. We'll look at one acquisition strategy example from each of the subscription offers and I'm going to cover things that you need to consider when planning and implementing these subscription offers into your app and server. So let's get started. If you look at the first example, the strategy of providing an introductory offer for a longer term subscription plan, the one thing you'll need to consider when merchandising an introductory offer is that customers may have previously redeemed an introductory offer and may not be eligible. So this copy will need to be dynamically merchandised only to eligible customers. This will help you to ensure the merchandising is in sync with App Store payment sheet. Let's see how you can do that.

With StoreKit 2, you can check customer's eligibility on a device by using the isEligibleForIntroOffer property. The value for this property will return true if the customer is eligible for an introductory offer or a 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 in Foray to check for the field is_trial_period and is_in_intro_offer_ period to 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 an introductory offer. Now, to merchandise offer details accurately and verify if your products in App Store Connect has the introductory offer available, you can do this with introductoryOffer property for StoreKit 2 and introductoryPrice property for original StoreKit, where introductory offer details are returned if they're available. If it is not, then it will not be returned by StoreKit and prevent you from merchandising an offer that is not available. So it's important that this is not hardcoded and instead, your app leverages StoreKit, which uses start and end date configure in App Store Connect. In addition, 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 Sandbox subscription management page. This can be easily accessed within your app if you implement showManageSubscription method. Else, you can navigate to your Sandbox Apple ID in App Store Settings. For more information on testing best practices for Xcode and Sandbox enhancements, see the WWDC20 session, "Introducing StoreKit Testing in Xcode." Now, let's take a look at the personalized messaging strategy example. We are using offer codes as our recommended tool. This feature is a great way for you to implement this strategy for two reasons. First, it will 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 and claim offer button. Once the customer taps on it, they will be presented with App Store offer redemption sheet, which will represent the configured offer code details in App Store Connect. Now when the customer taps on Redeem Offer, they will be provided with a 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 your app handles external transactions gracefully and provides a smooth onboarding experience. To do this, use StoreKit 2 Transaction.updates and for original StoreKit, SKPaymentTransactionObserver. These are critical to be initiated at app launch because offer code redemptions can occur outside of your app. And it's important to call finish transaction after products or services have been delivered to the customer, as these unfinished transactions will remain in your queue to help your app keep track of purchases that are yet to be delivered to the customer. This is also critical in case if there was any interruption on device. Now, if you wanted to test offer code redemption experience yourself, you can do this with StoreKit testing on Xcode and iOS 15.4 device. The support and experience uses presentCodeRedemptionSheet. If you're not familiar with StoreKit testing in Xcode already, it allows you to test fully offline without App Store Connect. You'll create and manage your in-app purchases locally in StoreKit configuration file. There, 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 transaction as a result of offer code redemptions. Now, on the backend system, you can easily identify offer code redemptions using JWSTransactions, which will contain offerType value equals three and offerIdentifier. The offerIdentifier will contain the value, which you configured in App Store Connect when setting up offer code. And you'll receive the notification type OFFER_REDEEMED in near real time when the customer redeems an offer. For more information on offer codes, check out our Tech Talk sessions on developer.apple.com. Next, on reporting side. We added a new report for subscription offer code redemptions in App Store Connect, Sales and Trends. This report contains all offer codes that have been redeemed, whether they are 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 onetime code, it remains blank for customer's privacy.

For more information on getting started with subscriptions or details about subscription acquisition tools, such as introductory offers or offer codes, please see "Auto-renewable subscriptions" documentation on developer.apple.com, as this contains all resources and applicable links for your reference in one place.