Data revealed by mobile app marketing company Liftoff shows setting app subscription costs too low might actually cause developers to lose loyal users.

Liftoff divided subscription apps into three groups based on cost-per-month: low ($0.99 to $7), medium ($7 to $20) and high ($20 to $50).

It examined the rates at which users subscribed to these apps and found those in the medium price range had the highest install-to-subscription rate (7.16 per cent), and the lowest cost to acquire a subscriber ($106).

In fact, apps falling in the mid-price range typically enjoy a conversion rate which is five times higher than low-cost subscription apps.

This may be because users don’t like to give up on things into which they have already sunk time and money.

Liftoff’s data indicates subscription app providers may do better to charge a higher price, but the company warned companies not to “overdo it” as apps in the high-price category see a drop-off in conversion rates, averaging 0.73 per cent.

The study, hailed by Liftoff as the “first-ever report dedicated entirely to trends around subscription apps”, also found the more time that lapses after an app is installed, the less likely it is that users will go on to subscribe.

Time
Apps at the low end of the pricing scale took the shortest time to convert users, with customers taking 15 minutes to decide if they wanted to commit to a monthly fee, given it is not a huge investment.

On the flip side, users of apps at the high-end of the pricing scale typically take 22 hours to commit to a subscription.

Those in the mid-range price group are not far behind the low-cost group, with users taking 25 minutes to move from install to subscription.

“For mobile marketers, better engagement and re-engagement tactics may have the potential to shave precious minutes off the install-to-subscription conversion time, and thus gain even more loyal subscribers,” Liftoff stated in its report.

Gender breakdown
The research found women are more likely to install and subscribe to an app, but it costs $4.43 to acquire a female who will install the app, which is 14.3 per cent more than the cost to acquire a male.

What’s more, the cost to acquire female users who then go on to subscribe is an additional 14.4 per cent higher than men.

“[M]ale users appear to be the low-hanging fruit for mobile marketers. Men are the less expensive gender to acquire, yet convert at a rate similar to that of female users. As such, marketers should direct more efforts toward male users”.

Liftoff collected data from 45 subscription apps between June 2016 and June 2017. The study analysed data across more than 1 billion ad impressions.