- Using behavioural economics to convey the value of paid APP subscriptions
- Originally written by Jeni
- The Nuggets translation Project
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- Translator: ALVINYEH
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Use behavioral economics to communicate the value of paid app subscriptions
Tips for better turning free users into subscribers
One of the key challenges facing the subscription industry is that many users do not realize the value of paying. Google Play has partnered with behavioral designers to explore how behavioral economics can be used to better communicate the value of upgrading to paid app subscriptions to free users.
The team teamed up with two mobile app developers — Peak, a popular brain-training app, and Freeletics Bodyweight, a high-intensity fitness app — to explore alternative growth strategies to current in-app monetization strategies. By capturing users’ thoughts and behaviors about these different changes, as well as in-depth analysis of users’ motivations for using mobile apps, the researchers have provided important references for understanding users’ reactions.
Understand the barriers to app subscriptions
Based on previous Google Play subscription research, this project highlights the relationship between free users and paid app subscriptions:
To overcome these barriers, users must clearly understand the value of paid content. The first step in implementing this transformation is to make sure users know exactly what they are paying for!
The role of behavioral economics in upselling
This research suggests that behavioural economics can play an important role in promoting paid subscriptions by optimizing the communication of interests, particularly in:
- Make paid content and features more attractive
- Explore users’ motivations for using mobile apps
The three most promising potential concepts for motivating users to subscribe are: power of the moment, reciprocity, and prominence:
The power of the Present
When it comes to achieving long-term goals, people tend to downplay future rewards in favor of putting in less time and effort now. The power of the present helps counter this tendency by bringing long-term goals and intentions to the present moment.
Freeletics has harnessed the power of the present by showing users a date by which they can reach certain fitness goals in the near future and lose x percent of their body fat.
Freeletics users can clearly imagine the future benefits of a “here and now” subscription that is very motivating. One respondent commented: “I like having a calendar. Setting small goals makes the final goal more attainable. The power of the present is particularly effective for many apps and categories where the results won’t be visible anytime soon: fitness, language, or education, for example.
reciprocity
In this project, Freeletics finds reciprocity by offering users a “free coaching tip.” Letting users know about paid content and giving them a “warm glow” is especially useful in many apps, because it’s a feeling they don’t get in the free version.
“I like that… I never noticed my legs because they were so muscular. It really helped me to know that… But it’s a small price to pay for what I’m about to become… That’s paying for good knowledge.” — A male Freeletics user
highlighting
Peak discusses the influences that make it monetize subscriptions, such as rapid brain map development and playing the professional version of the game. More prominent is the up-selling content in a constantly changing view, so that users can vividly imagine the experience after using the Professional version:
Using different animations also helps to increase user engagement through push notifications, lowering the barrier to entry. Striking visuals are a great way to distract users from pricing at the bottom of the screen, generating emotional excitement about content and features before they can pay.
Two other potential concepts:
- Authority bias
- Social norms
Authority bias
The authority of Peak’s partners has increased confidence in the game’s success in finding out why users download the app — actual brain training, not “just a game”.
“Hearing from qualified professionals… [Help] develop games… Make people think the app will work.” — A female Peak user
Social norms
- By leveraging the social norms of the global community
The different approaches that Freeletics and Peak have taken to upselling suggest that messages about social norms among a community of loyal users resonate with more exciting apps that feature large user groups, such as social health or online dating apps.
One of the features of Peak is the ability to compare scores between different users. The idea that a global community of users was playing Pro games sparked even more interest. Showing others the current and growing number of Peak Pro users helps highlight the popularity of the mobile app and creates a feeling of not wanting to miss out — Fomo!
For Freeletics, on the other hand, the idea of a global community is less important because it has nothing to do with the features of the Pro version. This is especially true for those who view their health as a personal experience.
- Social norms evaluated by users
We also looked at the response to recommendations from loyal users when selling more. While social proof through recommendations may lack the comprehensiveness of App reviews, it may be an opportunity to leverage more subscriptions to feature reviews in the App Store, where the Play Store is seen as a more trusted source of user feedback.
Peak and Freeletics users are fairly skeptical of such pop-ups. People are especially cautious when reviews are too good to be true, such as too many five-star reviews!
Pricing considerations
By observing the instantaneous reactions of users under different changes, you can see how much they care about pricing when they open the sales increase page. As a result, non-price-related information is hard to catch people’s eye:
- If price options take up too much screen space, there is a risk that free users will focus too much on spending and not enough on other messages.
- Information processing is most efficient by visualizing simple information, because users will only glance at large, dense blocks of text.
We often rely on reference points (or “anchors”) to help us make decisions. Our perception of the value of something new can vary depending on which reference point we choose, so by comparing the cost of a Peak Pro subscriber to the cost of a cup of coffee per day, we can easily find the pricing anchor for Peak users. Active users reported that anchoring subscription fees to relatively cheap daily fees in this way increased the value of free users.
“A monthly subscription costs only one cup of coffee… __ on the phone [screen], [costs] are really lower.” — A female Peak user
The key points
Hopefully the behavioral economics theory discussed above will give you a deeper understanding of the difficulties you may have in growing subscribers, as well as some ideas on how to overcome these difficulties, and tips on how to highlight the value of your application. If you’re interested in learning more, please check out the full report for more insight and recommendations to help you better demonstrate the value of your app and encourage users to subscribe.
What do you think?
Do you have any other ideas on how to use these principles to better convert your free users into subscribers? Let us know in the comments below, or tweet with the hashtag #AskPlayDev and we’ll respond at @googleplaydev. Here, we regularly share news and tips on how to succeed on Google Play.
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