How to Maximize Web Subscriptions for Sustainable Growth — Lucas Lovell, Paddle

0:00hello I'm your host David Barnard today's conversation is shorter than usual and will be featured in Revenue cat state of subscription apps report each episode this series will explore one crucial metric and share actionable insights from Top subscription app operators with me today Lucas level VP of product at paddle on the podcast I talk with Lucas about maximizing success with web subscriptions how web payment flexibility enables better user experiences and why making it hard to cancel can ultimately hurt your business more than it helps hey Lucas thanks so much for joining me on the podcast today thanks very much for having me David looking forward to it so this is the first year

0:43Revenue cat has ever worked with Partners to include additional data in the stateus subscription apps report and I actually have not looked at this data yet but paddle has shared some web data that will be in the report and so I didn't want to talk through the data today but I know you personally and the paddle team work with a ton of apps on web to app and you know being successful on web payments outside of the app stores so let's just kick it off with some of the top recommendations and what you see working on the web for subscription apps yeah sure sure so I

1:21guess from our vantage point we're really excited about web to app so paddle is an endtoend billing and payments platform on the web and we're working with lots of mobile app companies on their web Revenue channels and how to best deploy them and we've seen as you pointed out and some of this data will be shared in the report a big increase in mobile app companies who are looking at the web as an opportunity to acquire customers yeah I I feel like that's all I've been hearing about the last two or three years is like web web web like how do we get web on boring

1:47working and yeah yeah I think it's really interesting I think there are some key reasons why that's happening and I won't I won't sort of bore on with that around sort of attribution and perhaps some gross margin efficiency around cost but I think a lot of people are coming to the web and realizing that there are actually other advantages to the web around expanding your audience types being able to reach users who are more present on the web and might not be searching for apps in the App Store and also leveraging a lot of the a lot of the billing flexibility that you get on the web so web billing has been around

2:16for a long time and it can provide a bunch of flexibility and tooling that you can use to your advantage on the web which I think is really interesting so the way I think about it is very much it's not just a cost-saving opportunity it's actually a growth opportunity there's a lot opportunity on the web in terms of deploying different billing models and deploying different types of pricing experimentation and AB testing in a way that that you're a little bit restricted with on the App Stores so I think in terms of like how to best think about it I think the starting point for me would be thinking about like why

2:48people will visit your website on the web or how are people going to come to you on the web we see companies who are driving traffic to the web through through content marketing and using content marketing as a landing point and then con converting users into sort of paid users on the web and then pushing them to the app there but we're also seeing a lot of companies deploy web funnels and I think especially for for mobile apps that have quite a large component of personalization we're seeing web funnels be a really effective way um of driving traffic to the web so the classic categories there are health

3:20and fitness we're seeing a lot of web funnels in health and fitness education as well so language learning apps um Wellness apps who are all using that effectively and an reducing the web funnel off the back of a paid ad on a social media platform for example and seeing really good conversion rates and then also good renewal rates as well on those subscriptions too so a lot of reasons to consider the web but I think it's also how you build a really effective web channel is very much dependent on the type of mobile app that you are and the type of customers or the type of users that you're looking to

3:50acquire yeah it does seem like and you kind of alluded to it already is that apps that do kind of have a higher intent user coming in health and fitness being something we talk about constantly is that somebody looking to get fit and or lose weight or or kind of these other categories of of Health and Wellness there's like a very strong deep personal motivation to do those things and then also a higher willingness to pay I mean people are willing to pay a lot for their health they may be spending 50 100 bucks a month on supplements and gym memberships and it can easily add up to

4:25hundreds of dollars a month so these health and fitness apps are relative ly inexpensive comparatively and then education and other things I I think there's a lot of categories where you do see the web work better and then maybe some categories where you don't any kind of insights of where you've maybe seen apps struggle and then any other categories that you think have worked especially well health and fitness is working really well Wellness is working well education and language learning is working really well I think some areas that where yet to see it really take off and I probably wouldn't position this as like these companies are struggling but

4:59rather they haven't shown as much intent yet is probably in like productivity is a good example I think the lack of personalization around how you use the tool for example a notetaking tool or something like this is not as interesting I think when you're thinking about a web funnel and building buying intent through a web funnel so I think that's an example media perhaps is another example I don't have a lot of sort of great examples around who it's not working for I think it's more what are the categories that are leading this trend and I think there are other ways in which those categories that perhaps

5:30aren't investing in it as much to sort of start thinking about it in the future but at the moment it's very much the apps with a high component of personalization that are seeing really really good results with web funnels what are the things some of the things that you see working really well you keep talking about web funnels and you know we've talked about this a lot on the podcast in the past different forms of onboarding different forms of kind of like building up intent what are you seeing working in that mobile app companies that are thinking about the journey end to end are seeing a lot of

5:59good results so thinking deeply about the web funnel experience doing a lot of experimentation on the pay wall and then also taking that through to the checkout as well are seeing great results on conversion and I think companies that are looking at those Journeys and really thinking about how we can reduce friction in that journey I seeing a lot of success and also understanding the routs that people are taking through the web funnels and how they can produce a buying signal and looking at that data really carefully I think is good you know we very much think about you know your success of the on on the web if you

6:29had to boil it down to two key data points or two key numbers that matter it's very much your conversion through the funnel and your renewal at the end of the first subscription cycle so how many users get through the funnel and convert based on a certain amount of AD spend how many of those converted users actually end up renewing it's easy to get distracted by the former and not think deeply about the latter and I think the companies that are seeing a lot of success are thinking really deeply about retention and deploying retention tooling and using things like cancellation flows and downgrade flows to reduce churn and to drive the renewal

7:06rate in the right direction to really boost and maximize the ROI of the web Revenue channel that they're working on so I do want to dive deeper into retention here in a bit but before we do that I wanted to talk a little bit about some of what you just mentioned is that there is so much more flexibility on the web with how you charge the business models and the ways you approach monetization and and one of the things I hear about constantly I've been frustrated with the app store for years is that they don't offer like per seat licensing B2B is really hard if you have

7:38a great b2c company and somebody comes and says hey we want to buy 20 licenses for all of our employees it's like there's not really a great way to do that on the App Store even like in a b Toc sense where a employee wants to use an app for work but they have a personal App Store account it's like they would have to like pay for it with their personal credit card and then have this whole like reimbursement process and so the web does offer so much more flexibility in business model and monetization and how you do things what are you seeing be successful there I

8:11think it's interesting because to be honest based on what we're seeing and we're primarily working with bet C so sort of consumer subscription apps at the moment and most of them tend to be deploying quite similar models on the web as what they are on the app but we are starting to see signs of some companies sort of better understanding the billing flexibility that the web provides and starting to Tinker and play with some different types of models to be honest I think a lot of consumer apps don't know what they don't know and so there's definitely an education piece on our part to sort of show them what's

8:43possible on the web and support them in exploring different pricing and packaging scenarios and how they can think about setting up their billing models I also think we're going to go further and further in this direction because if you know if you look at Ai and how AI is starting to be embedded into different software products that's really changing the way that we price as well so a lot more consumption usage based pricing tying pricing to the value that you re see from a product as opposed to it's a standard price irrespective of how often you use it I think we will start to see that roll

9:13into the consumer side a little bit more as consumers start to use more of these products I think what we're seeing at least from our vantage point is sort of bringing over the Simplicity of the App Store into the web we are seeing more flexibility on the retention side I think but I think from the billing model and price model perspective I think we've got a way to go before we see mobile apps really start to challenge some of those Norms that have been ingrained in them based on some of the restrictions in app store billing yeah I mean that's part of the whole conversation the last few years around

9:41web is that it is this kind of whole new opportunity that most apps aren't used to working and so there is like this kind of exploration phase and I agree I mean I think we're just going to see a lot more experimentation over time with those different kind of pricing and packaging and B2B opportunities company building and stuff like that so it's it's an interesting opportunity for folks to be exploring even if you're not seeing a ton of it yet the other thing I do hear a lot about from a web billing perspective is winb backs is that if you're going to offer a discounted subscription to try and win somebody

10:18back a great way to do that is to go ahead and send them to the web you know it's a lot higher intent when you say hey 50% off or 25% off if you go to the web are you seeing those kind of things to be successful we are yes we are we are seeing quite a number of examples of discounted pricing on the web and using discounts of pricing in winback campaigns as you mentioned we're even seeing companies choose to offer standard pricing at a lower rate on the web just the counting for the fact that you know the fee component is much smaller on the web and choosing to pass

10:50on some of those savings to the user I think there are lots of companies that are starting to double in that space and I think consumers will start to pick up on that and I've known Everyday People sort of pick up on the fact that you know purchasing X is cheaper on the web than is on the app so I'm going to go and do that or I'm going to cancel my subscription on the app and resubscribe on the web because of a cheaper price there is some complexity around that right around like when you can sort of link from the App Store how you sort of

11:14build those mechanisms but it's definitely possible and something we're definitely saying yeah and you know I don't know that everybody's fully aware of this cuz I still get questions almost on a monthly basis from people like wait can I actually send people to the web and the basic answer answer is that you cannot send people to the web from inside the app although there's even more flexibility now with both Apple and Google with special entitlements where you can actually in the apps into of the web but then you still have to pay commission it's all a bit complex but as of I think about two two and a half

11:45years ago there was a ruling I think it was a the Japan Fair Trade Commission that kind of pushed apple on this where once you have somebody's contact information if even if you collect it with inside the app Apple tried for a while like hey if you collect an email inside of the app you can't then use that email to send people to the web but that's clearly very anti-competitive and so they backed off on that and so any contact information that you collect within the app can be used to then push people to the web so I've even seen apps where if during that onboarding flow

12:18inside the app they do collect an email and the user doesn't immediately subscribe then within minutes they're pushing an email and and maybe it even drops down as a notification while they're still in your app saying hey come to the web and save you know 30% or 40% or whatever that is I mean of course Apple doesn't love that that happens but like that is okay now like they cannot and have stated in the rules that that is okay so it can be a really powerful tactic to nudge those users and using email and text or other ways to do that I think push notifications are still

12:53under the rule of like that's kind of technically in their ecosystem although I do still see apps doing that on occasion using push notifications instead of email or text but yeah I think a lot of people aren't aware of just how much they can use even those channels to push people to the web and this is why we're seeing this is why we're seeing especially in gaming a lot more account creation so apps that typically didn't require account creation so you just in a game and you just s just play the game and now asking you to create an account put in your name put in your email address for the

13:25purpose of being able to retarget you in different ways through other channels that aren't directly the app it makes sense in gaming right because you're purchasing things on the fly so if you're playing in an app and you're purchasing Gems or tokens or swords or whatever right ing game like like in-game economy items and it's not just a one-off purchase with a renewal at the start there is a big drive to push them to a web store to make those purchases where they're offering bundled products at discounted prices but to do that they need to be a to contact you through other means and so we're seeing a lot of

13:55that through the the evolution of the web store and gaming right the Epic game store is a great example of a very successful strategy that that is really working for epic games and there are other great examples of that as well but yeah it's a brilliant point and you're and your spot on yeah I mean I even saw that I've played Pokémon go with my kids for years now and I just got an email like a few weeks ago of web exclusive bundles that like really highlighted the deals that you can get on the web for Pokémon go so yeah I've been seeing it more and more as well so I did want to

14:24transition and start talking a little bit more about retention and turn mitigation on the web I think it's no secret that some of the reason some apps do see better retention on the web is that it is just harder to cancel and I mean famously you know New York Times and others have made you call to cancel if you have a web subscription and it is it is way easier to cancel on the app stores and so some of the boosts that you're going to see on the web is just people it's it's daunting I'm going to have to go log in I'm going to have to

14:57dig through settings and find a way to cancel but ultimately like you're not going to build a great business on people you not being able to cancel preventing them from canceling you know those are the people are going to be frustrated with your brand they're going to be telling your friends not to subscribe because they had a hard time unsubscribing and so to build a great business you don't want to put huge barriers in the way of cancelling you know you want users to be engaged with the app and actually getting value so what what are some of the ways that you've seen the web work well for

15:30retaining users and doing so in a way that actually is like consumer friendly I think this is really important and and I actually agree with you like you can't build a sustainable business on dark ux patterns right we see that on both sides we don't just see that on the cancellation side you do see that up front as well in at the pay wall around like transparency around pricing right because the web is much more flexible you're not sort of under the guys of a governance structure like apple well you can push boundaries around that sort of thing mislead consumers in certain ways and there's just no way you're going to

16:01build a sustainable business out of that so like we would never ever encourage that the part that is perhaps different on the web is tooling available to you in order to prevent churn there are a number of examples of this and I think your point about like the ftc's new click to cancel rule is spot on and on the web companies need to be really aware of that there are options for you so when someone clicks a cancel button and it might be a one-click cancel button but you can present a cancellation flow which can ask some questions about why are they canceling and present some alternative options you

16:32can build ways to trigger a downgrade flow or a pause flow instead of a cancel flow which means you might be downgrading them from one plan to another but you're not losing them entirely you can also deploy reactivations and winback campaigns in different ways on the web which I think is really interesting as well so I think the web just gives you more flexibility around some of the customization you can build into your flows to either mitigate CH in the first place or when churn is happening perhaps get a better result than you might have been able to get on the app store and to your point I think

17:06there's an opportunity on the web too to create better experiences than you get on the App Store like yeah it's super easy to just go cancel on the App Store and that is a good consumer experience like feeling like you have control over the subscription but with like being able to pause being able to refund being able to offer more flexibility to customers on the web I do think can actually create better customer experiences you know one thing I've I've heard from people that that's actually working pretty well is instead of a free trial offering a 30-day money back guarantees like you can't do that on the

17:39App Store you can't offer a money back guarantee you can't automatically like refund somebody so as an app developer you can create better experiences on the web through that flexibility where you are driving that retention and helping people stay retained but then offering these best better experiences on the web and I I think that's it's a huge opportunity and kind of like we were discussing earlier as kind of a for app developers anyway a new thing that's that's really been growing a lot the past few years I think there's still a ton to explore there absolutely it's really exciting really exciting lots of opportunity as you said like I think on

18:17both stages in the funnel like the two most important things as I said earlier it's conversion through the pay wall and the checkout and then keeping and holding on to that customer and I think at both of those points in the user Journey the web is giving you opportunity and flexibility and tooling to do things that you are unable to do in the App Store and and and that's the unlock that people are realizing when they come to the web they're coming for the fees and staying for the flexibility in a way right it's the catalyst is sort of better attribution and lower cost transaction fees but they get here and

18:49they go wow I have all of this flexibility around me I can do different things I can experiment in different ways I can I can try and build different customer experiences to support my users on their journey to keep them to engage them and I think we'll continue to see as web to app keeps evolving we'll continue to see mobile app companies push some of these boundaries explore what's possible and yeah we're here along for the ride and we're really enjoying it and learning a lot learning a lot from a lot of these mobile app companies awesome well it's been really fun chatting through this with you and

19:18and I'm similarly excited about what we'll see continue to grow and change on uh Web building for apps anything else you wanted to share as we wrap up we're going to include links to your personal LinkedIn in and to paddle of course but anything else you wanted to share as we wrapped up no I think you're good thanks for having me on as you just mentioned very happy for people to reach out to me via the typical channels LinkedIn X Twitter whatever we call it these days but yeah thanks very much for having me on David it's been it's been a great conversation thanks so much for

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