Navigating in-app subscription policies with Recurly
The evolution of subscriptions leads us to a web of advancements. From digital wallets to omnichannel experiences, subscriptions are a sign of the changing times and consumer demands.
Mobile apps are just one of the many avenues subscription businesses explore to sell their products and services. While having your subscription app available to download for users worldwide is beneficial to your business, it’s essential to understand everything that entails.
In this article, Hannah Wheeldon, a Strategic Customer Success Manager at Recurly, shares what it takes to get your app into Apple’s App Store.
Why in-app subscriptions make sense
Subscription businesses are not short of options when it comes to how and where they sell their products or services–a website, a third party, an affiliate–just to name a few. But as modern-day consumers rely on their mobile devices more and more, the app store marketplace can become a big revenue driver for subscription businesses.
While many of Wheeldon’s experiences are with the Apple App Store and Google Play, the requirements of app submissions are largely universal. Wheeldon defines a mobile app as a “native app that [consumers] install from the App Store versus just a web app or a really great responsive website.”
In the UK, 80% of consumers’ time is spent within an app and not on mobile web. Consumers are on their phones to work, shop, and find entertainment–expecting large brands to have their own apps.
Not only does it make a business seem more reputable and legitimate, but it also improves the accessibility and convenience of that product or service. Having an entire app dedicated to a brand allows the business to control the consumer experience, and subscribers demand a native, personalised experience, or they will churn.
Pros of subscription apps
One-click wonders. Consumers can subscribe and make purchases faster since personal information and payment data are saved in apps on their devices, expediting the purchase conversion. Moreover, when subscriptions are purchased in an app, access to the product or service is immediate.
Trustworthy payments. Consumers are loyal to their mobile devices and the makers of these mobile devices. Web experiences, however, may put shoppers through slow load times and page crashes, leaving them to worry about the exposure of personal data.
Easy management. Because of regulations surrounding consumer experiences, Apple and Google require recurring revenue businesses to be upfront about the terms of their subscriptions. Steps for auto-renew, cancellations, and all consumer settings must be easy for consumers to locate and process.
Recommended reading: App payments are changing: 3 ways subscription app businesses should prepare
Cons of subscription apps
Fees. The App Store, for example, takes a percentage of your revenue. In the first year, the App Store takes 30% of revenue from new subscriptions, which drops to 15% after year one.
Slow progress. For years, businesses have faced numerous challenges in the app marketplace space: Functionality was limited when deploying new app features. Free trials, promotional pricing, and more were unavailable until the last two years.
Policies and limitations. Selling in an app marketplace means you must follow the owner's rules. Frequently, policies are limiting and designed to encourage consumers to purchase (and keep earned revenue) in the app.
The future of in-app subscriptions
Today, the app marketplace has become a more welcoming place for subscription businesses. For businesses that earn less than $1 million USD in the App Store, the small business program will cap your app-level revenue fees at 15%.
Additionally, websites and apps operate more seamlessly together, offering app users and website users access to products and services easily, regardless of the channel.
It’s important to understand the full picture when it comes to offering an app for your subscription service. While it’s easy to continue selling subscriptions on your website as you always have, there is a great opportunity to expand your audience and revenue channels by offering a subscription app.
Previously, businesses were only able to offer subscriptions through the app marketplace’s payment framework, which took a cut of the revenue. Now, if your app falls under the Reader category–apps whose primary function is to provide digital content such as audio, books, video, etc.–can choose to sell subscriptions externally, meaning the app opens an external link for users to subscribe and bypasses the app marketplace payment.
However, there are some downsides–this is not an ideal user experience, and if you choose this route, you can’t also offer in-app subscriptions. Regardless, subscription apps are fulfilling the consumer demand for quick and easy access to mobile shopping.
