Alejandro Cantarero is the Field CTO of AI at DataStax. Previously, Alejandro was founding CTO of Nami ML. He has built and run data teams at startups and large enterprises. Most recently he was the VP of Data at two large media companies, the Los Angeles Times and Tribune Publishing Company.
Apple’s subscription Offer Codes announced at WWDC 20 are now available. In this article, we discuss what exactly Offer Codes are and how you should think about using them.
What are Offer Codes?
Offer Codes are one of the simplest ways to provide promotional pricing to your customers. They are a great tool to add to your ongoing acquisition, retention and win-back programs. While Offer Codes have some limitations, they are quick and easy to use so they offer your marketing team
They are unique one-time codes you generate in App Store Connect and provide to your customers. In fact, Offer Codes are incredibly easy for the user to redeem in the App Store like a gift card or also in-app via a redemption sheet.
Who is Eligible to Redeem Offer Codes?
When you create Offer Codes, you select which cohort of your customers are eligible to redeem the offer.
Choose customer eligibility when you create Offer Codes
Your choices are:
New Subscribers
Existing Subscribers
Expired Subscribers
Let's dig into some of the use cases for each target customer group.
New Subscribers
These Offer Codes target users who have never purchased the subscription product. Here are a couple ways you might want to use this type of offer:
Use as an acquisition tool to bring new users into your app's funnel
Use as an acquisition tool to convert users who have already downloaded/used your app into your subscription
Existing Subscribers
These Offer Codes target users who are current subscribers of the subscription product with auto-renew turned on. Here are some ways you might want to use this type of offer:
Use as a loyalty-building tool to reward your best subscribers with discounted pricing for a period of time
Use as a customer service tool to for user(s) who encountered a negative experience with your app or brand
Use as a retention tool with existing subscribers who are showing the early warnings signs for churn
Expired Subscribers
These Offer Codes target users who are a former subscriber of your subscription product. Here are some ways you might want to use this type of offer
Use as a win-back tool to encourage former subscribers to re-subscriber to your subscription product
What Promotions are Possible with Offer Codes?
In addition to targeting specific eligible customer cohorts, Offer Codes support three offer types:
Pay as you go
Pay up front
Free
Let's look at each of these in more detail:
Pay as you go
Pay as you go offers give you the ability to set a price for eligible customers to pay weekly for between 1 and 12 weeks. Even for a monthly or annual subscription product, this gives you the power to charge a customers a small amount more often.
Pay up front
Pay up front offers let eligible customers pay one flat price for a certain duration. For example, even for a monthly subscription product you may find that a promotional offer of one price for the first 3 months is the best way to keep the subscriber from churning out 30 days.
Free
Free offers give you the ability to offer between 3 days and 1 year free. This type might be used in customer service situations or as part of your acquisitions efforts.
Offer Code Limitations
Only available on auto-renewable subscriptions type in-app purchases
Generated on a by product SKU basis
Generated for one of three potential eligible customer types: new, existing, and expired (former) subscribers.
Customers can only redeem one code per offer
Customers may redeem multiple different offers, even if they are for the same subscription product
Offers can be redeemed in-app or on the App Store with a URL
Offer Codes expire on a specific date, maximum 6 months from the time they were created
You can have a maximum of 10 active offers per subscription and 150,000 codes per app per quarter
They only work with devices on iOS 14 and iPadOS 14 and later
How are Offer Codes Different from Introductory Offer & Promotional Offers?
While Introductory Offers can have time bounds, these are best used for your "business as usual" offers. For example, use Introductory Offers for your standard Free Trials for a subscription product. Introductory Offers apply to anyone buying the product, so there is no redemption event that needs to take place.
Tip: Please note depending how you setup your Offer Codes, they can combine with Introductory Offers so keep that in mind when you are considering what you want to offer.
Promotional Offers can be used to deliver some of the same strategies as Offer Codes for Existing and Former Subscribers. When you find an Offer Code strategy that works well for those customer types, you can use Promotional Offers to operationalize the strategy inside your subscription business logic. While more complex to adopt, Promotional Offers have the benefit of delivering the same business impact, but without requiring Offer Code distribution and redemption.
Final Thoughts
Use Offer Codes as a useful for marketing and customer service purposes.
For marketing, they are a great tool for acquisition, retention, and win back campaigns. They are easy to setup, so they are a great way to experiment with different subscription marketing strategies in meaningful numbers. Once you find a strategy that works, use Promotional Offers to operationalize at scale.
For customer support, they can be utilized on a case-by-case basis to help resolve customer service issues.
For end users, while some frictions exists to redeem, it's not any more so than an App Store or iTunes gift card.
This week Google had its Google I/O conference. A number of announcements were made about in-app purchases (IAPs), subscriptions, the Google Play Store, and the Google Play Billing Library.
We’ve found all the major announcements related to selling digital products with your apps on the Google Play Store so you don’t have to go watch all the talks.
Google Play Billing v4
The single biggest announcement for in-app purchases and subscriptions is the release of v4 of the Google Play Billing Library. Release notes for Play Billing v4 can be found here. While the library is available immediately, the new capabilities it provides have not been released yet and details are pretty scarce on exactly how all the features work.
We’ll continue to updated this blog as more information is released on these exciting new ways to sell products on Google Play.
Multiline Subscriptions
Coming later this year, Google teased how you can bundle together multiple different subscription products and sell them as a single purchase.
Currently, if you want to bundle up multiple subscriptions in your app, you have to create a new subscription product in the Play Console. You might call it Bundled Subscription, set a price, and then internally in your app grant the correct access to the content and features unlocked by the set of subscriptions that were accessed via the purchase. This logic all has to be created in your app code.
This new approach potentially offers some advantages over the old method of selling bundles:
The customer can see a line item breakdown of each subscription they are purchasing.
Presumably, Play Billing will grant purchases on each included subscription, simplifying your in-app logic for granting access to paid content and features.
Hopefully, Google will offer a mechanism to offer a bundled purchase discount, though they did not show that capability in their talks.
Multi-Quantity Purchases
Another exciting announcement is the support of multi-quantity purchases. This enables Play Billing to work in a manner similar to a shopping cart. For one-time purchases, customers will be able to add multiple quantities of an item during the checkout process and buy them with a single purchase.
Prepaid Plans
Google also announced Prepaid Plans. These will allow you to sell access to content or features for a fixed period of time. Google will prompt the customer to renew for more time as their prepaid plans expire, but there are no details yet on how that will work.
As announced at Google I/O last year, each major version of the Google Play Billing Library will be supported for 2 years. Google is officially sunsetting AIDL for in-app purchases as well as Play Billing Library versions 1 and 2 this year.
All new apps must use version 3 or 4 of the Play Billing Library by August 2, 2021. All existing apps must switch by November 1, 2021.
For more information on migrating from AIDL to Google Play Billing, consult this migration guide from Google.
Comparative Revenue Metrics
Google started rolling these out earlier this year. 15 new metrics covering both engagement and monetization of your app have been added to the Play Console. The most interesting part is that they’ve created comparative benchmarks to help you understand how well your app is performing versus similar apps. This can help you quickly see where you might need to spend effort on improving your monetization efforts.
Google has created over 250 categories of apps and games to help you find your correct peer set. They have excluded small, underperforming, and abandoned apps to improve the accuracy of the benchmark reporting.
In the Play Console, select your app, click on Statistics in the left navigation, and then click the Compare to peers tab. You can then click on the Metric Name, select Monetization, and see the list of metrics available.
You can also click on the Peer group to limit the comparison to specific categories of apps. Clicking on the Country / region will allow you to further filter by location.
Lower Priced IAPs in Some Markets
In many markets around the world, Google is introducing sub-US dollar pricing. This will help you better market your app in places where the current price points do not align with the spending power in the local market. A full list of price points and countries is not available yet, but Google did share which countries will be getting new price points for IAPs on the map below.
Play Billing and Progressive Web Apps
Play Billing support for Progressive Web Apps (PWAs) was launched earlier this year. You can now integrate Play Billing into a PWA and sell in-app purchases and subscriptions on Chrome OS.
Purchases made with Play Billing will be shared between Chrome OS and Android, which is very exciting. Integrating Play Billing with a PWA requires using 2 APIs, the Digital Goods API and the Payments Request API. See Google’s documentation on how to use both these APIs to enable purchases in PWAs.
Google has also provided an example app to show how this all works.
