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  • Improve your subscriber retention with App Store features

    Learn how to minimize churn and win back subscribers on the App Store. Explore App Store data, review different types of subscriber churn, discover tools you can use to enhance your retention efforts, and learn implementation best practices.

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  • Bryan: Hello and welcome.

    Today we're going to discuss how you can improveyour app's subscription retention strategyusing the App Store features.

    I'm Bryan and I'm part of the App Store Monetization team.

    And I'll be joined by Hemant,a developer advocate on our App Store Commerce team.

    We'll start by sharing key insights to help you think aboutmanaging your approach to subscriber retention.

    We'll then walk through the featuresthe App Store provides to help you improveyour subscriber retention and provide some sample strategiesyou can consider to elevate them.

    I'll then hand it over to Hemantto discuss engineering considerations.

    So, let's get started.

    For over 15 years, the App Store has been a safeand trusted place for people to discover and download apps.

    You can use in-app purchasesto support a variety of business models on the App Store.

    Customers trust that purchases made through the App Storeare held to high privacy standards,and are encrypted and protectedto keep their personal information safe.

    Auto-renewable subscriptions have proven to bea popular way for developers to grow their businesson the App Store, as evidenced by the continued growthin new subscription starts each year.

    Since auto-renewable subscriptionsare a recurring revenue model, they have a unique customerlife cycle that require monitoring and trackingat all stages.

    A customer must first discover your app,either organically on the App Storeor through your own marketing channels,before downloading it to their device.

    Once in your app, you need to acquire paid subscribersby informing customers of your subscriptionand communicating the value of the service.

    And once they become paying customers,you need to ensure they're consistently engagingwith the service and provided with ongoing value.

    While these stages are important for scaling your business,we've observed the most successful subscriptionsto have thoughtful strategies in placeto make sure they're retaining customers longer.

    The classic way to think about thisis by imagining your subscription serviceas a leaky water bucket that's been punctured with holes.

    If you spent all of your time and resourcesfilling up your bucket or acquiring new subscribers,you would slowly lose water, or subscribers, over time.

    However, you can help remedy and address thisby focusing your efforts to plug some of these holesto effectively help retain more of your subscribers.

    And one of the big benefits of retaining customers longeris that it increases your revenue.

    When a customer acquired on the App Storestays subscribed to your app for more than one year,your proceeds increase from 70 to 85 percent in year two.

    One of the main metrics you can monitorto understand your subscriber retention is your churn rate.

    Churn occurs when a customer's subscription comes to an endand does not auto-renew.

    This can occur for a variety of reasons,which fall into two categories.

    Voluntary, which is when a customer chooses to canceltheir subscription themselves.

    And involuntary, which occurs when a customer doesn't intendfor their subscription to end.

    Customers may voluntarily churn from your subscriptionfor a variety of reasons.

    For example, if your service isn't consistentlyadding new content or features,or if it's intended for shorter-term use.

    It can also occur if a customer is no longer ableto justify the financial commitment.

    Involuntary churn primarily occurs when a customerexperiences a billing issue, such as when their credit cardexpires and their billing details haven't been updated.

    There are a number of factors that can contributeto an app's voluntary churn rate,such as where a subscriber is located.

    For example, we can see that compared to the United States,churn rates tend to be higher in mainland China,where the concept of an auto-renewing paymentis less common.

    Similarly, churn can vary depending on an app's category.

    Let's take a look at the differencesbetween a few sample categories.

    On the lower side of the spectrum,health and fitness apps tend to have lower median churn ratesbecause customers oftentimes commit to servicesfor longer periods of time to help achieve their goals.

    And music apps come with a deep library of contentthat customers can consistently find value and engage with.

    On the other hand, some categories might seeslightly higher median churn, like entertainment,which customers oftentimes churn fromwhen their favorite shows have ended.

    And lifestyle apps, which is a category primarily made upof dating apps that are designed to no longer be neededonce a romantic goal is met.

    However, involuntary churn is not necessarily correlatedto factors like region and category,as it's not linked to customer behavior.

    Here you can see the involuntary churn ratesfrom some of our top worldwide apps.

    As we'll discuss in a moment, the App Storedoes a number of things on your behalfto help combat involuntary churn and keep these numbers low.

    Keep in mind that these data benchmarksare directional and include a wide range of apps.

    Each subscription is unique,and metrics for your specific app may vary.

    So now you might be wondering how to quantifythe impact of improving your retention.

    Let's look at an example to visualize.

    This app starts out the yearwith a cohort of 10,000 subscribers.

    If they observe an 85 percent retention rate for the cohortevery month through the end of the year,they'll end the year with 1,673 subscribers.

    This equates to a loss of nearly 83 percent of these subscribers.

    If they improve their retention rate to 90 percent each month,they'd end the year with 3,487 subscribers.

    And if they improved it to 95 percent each month,they would end the year with 5,688 subscribers.

    This means they would end the yearwith triple the subscribers they would have hadat an 85 percent retention rate.

    While this visual is meant to serve as a helpfuldirectional representation, do note that it does not accountfor every variable in the subscriber life cycle.

    Apple provides you with a number of tools to help youtrack and grow your business on the App Store.

    Within App Store Connect, you can use Sales & Trendsto view data related to your subscriber retention rate.

    You can also download your subscription reportto track information about your total paid subscribersand the subscription events report to help understandaggregated subscriber updates.

    And App Analytics provides you with retention benchmarks.

    This can help you understand how your specific appperforms against a cohort of similar apps in usage retention,which can help you directionally understand how much timeyour customers spend engaging in your app.

    Now that we've discussed the importance of retention,let's talk about some of the featuresthe App Store offers to help you minimize churnand support retention.

    The App Store has a number of featuresto help you retain your subscribers for longer.

    Billing retry and billing problem messageare two tools that are automatically initiatedfor all subscriptions and don't requireany additional implementation work.

    And billing grace period and subscription offersare tools you can choose to adoptto help amplify your subscriber retention strategy.

    Let's start with an overview of the featuresthe App Store does on your behalf.

    Billing retry is a feature that Apple automatically providesto help you to recover failed renewalsand prevent involuntary churn.

    In the event of a payment failure,a customer is automatically enteredinto the billing retry state,where they have 60 days to recover their subscription.

    During this window, Apple attempts to collect paymentfrom the customer through a number of communication methods,such as the App Store push notification shown here.

    If the customer is recovered within 60 days,their subscription resumes and they continue to accruetheir days of paid service,which can help you increase your proceeds to 85 percent.

    Here's a visual to help explain this furtherusing a customer on a monthly subscription.

    Let's say at the end of the term,their credit card information on file has expired.

    Without a valid payment method, their renewal failsand they automatically enter the billing retry statefor up to 60 days.

    It then takes the customer 10 daysto update credit card information.

    And after they've done so, their subscriptionis successfully recovered and a new billing dateis established on the date of recovery,which is what all subsequent renewal dates will be based on.

    During the 60-day billing retry window,Apple attempts to notify customers of their billing issuethrough email, push notification,and an App Store banner.

    If a customer selects any of these methods,they will be automatically taken to their device settingsto update their payment details.

    And Apple has developed a methodologyto effectively use these channels to notify customersof the billing issue at multiple pointsthroughout the entirety of the 60-day window.

    As you can see here, customers are notifiedby email and push notificationat multiple points throughout the window,while the App Store banner goes live at the start of the period.

    The billing problem message takes the functionalityof billing retry a step further by providing customersin the billing retry state a low-friction solutionto update their payment instrument detailswithin the app that also prevents involuntary churn.

    If a customer tries to use your service after enteringthe billing retry state, they will automaticallybe notified of the billing error and be promptedto update their payment details.

    This both alerts the user of the issueand provides a simple way to resolve itwithout needing to leave your app and navigate to Settings.

    Now that we've covered what Apple doesto help you keep subscribers, let's discuss featuresyou can implement to help elevate your retention strategy.

    Billing grace period helps you prevent lost revenuewhile improving your involuntary churn rate.

    This feature builds on the functionality of billing retry,allowing customers who have encountered a billing issueto retain access to their subscriptionwhile the App Store tries to remediate the issue with them.

    This means that rather than immediatelylosing access to your service, customers can still access itwhile Apple attempts to recover the subscription on your behalf.

    This can be helpful for you since customers that resubscribeduring the grace period retain their original renewal date,meaning you won't accrue any unpaid days of service.

    Best of all, billing grace periodcan easily be implemented within App Store Connect,which Hemant will walk you through in a moment.

    Billing grace period is also configurableto help fit the needs of your business.

    You can apply the grace periodto all of your active subscription plans,or choose to exclude customers in a free trialso that it only applies to those on a paid plan.

    You can also choose to set the grace periodto be 3, 16, or 28 days long.

    Keep in mind that the more timeyou give a customer to resolve their billing issue,the higher your chances will be of reestablishing a subscriptionduring the grace period.

    In fact, when looking at successful subscriptionrecoveries over time, we see that 40 percent of customerscorrect their billing information within three daysof the billing issue being recognized.

    The number of billing recoveriesjumps to 75 percent within 16 daysand up to 90 percent within 28 daysof the billing issue being recognized.

    Let's use another visual to explain how this feature works.

    As with our previous example,the customer's credit card information has expired,causing the renewal to fail.

    With billing grace period, the developer has nowcarved out the first 28 days of the billing retry periodto reengage customers without impacting billings.

    During this time, customers will still be ableto access their subscription.

    It then takes the customer 14 daysto update their credit card information.

    After they've done so, their subscription is reestablished,and they will remain on the existing billing cycleso you won't lose any days of paid service.

    We've seen developers successfully usebilling grace period to recover and save subscription plans.

    And in the past year,we successfully recovered nearly 80 millioninvoluntarily churned subscriptions for developerswho have enabled the billing grace period feature.

    Finally, subscription offers can be an effective wayto retain customers for longerand improve your voluntary churn rateby surfacing free content or enticing discounts to your app.

    App Store has two distinct offer featuresto help retain your customers for longer.

    Promotional offers is a feature that allows you to givecustom cohorts of existing or previous subscribersa free or discounted subscriptionfor a specific duration distributed inside of your app.

    And offer codes equip you with additional flexibilityfor merchandising offers both inside and outside of your app.

    There are a few key scenarios to considerin order to create relevant subscription offersthat entice customers to stay subscribedto your service for longer.

    You can use offers to save low-engaging customersfrom canceling their subscription.

    And you can also use offers to try and reengage customersthat have already turned off auto-renewal for your service.

    Some of these customers might still haveremaining days of service to enjoy your subscription,while others might have fully churnedfrom the subscription already.

    Let's now discuss some strategiesto help engage customers in each of these three scenarios.

    You may have active customerswho still have auto-renew enabled,but are at risk of canceling their subscriptiondue to low engagement in the product.

    This is a critical opportunity to save customersfrom turning off auto-renew and churning from your service.

    You can use these offers as opportunitiesto communicate the value of your service,or point customers to new features and capabilitiesthat they may not be aware of.

    You can provide them with a free period or offerto upgrade or downgrade them to a different productthat may be more suitable for their desired usage.

    It's most effective to distribute these offersoutside of your app,such as in emails or push notifications,to improve your chances of the customer seeing them.

    Here's an example from the hypothetical app Ocean Journal.

    They've sent an email to a low-engaged customerwith an offer to enjoy the next month of service for free.

    They've contextualized the messagewith an announcement of a new subscription featurethat allows customers to access content offline.

    If a customer has already turned off auto-renewbut still has access to your subscription,you can surface offers to attempt to prevent themfrom fully churning and losing service.

    Many customers find themselves in this scenario,as they tend to cancel their plans in advanceof their renewal date.

    In fact, over 90 percent of customers cancel planswith at least two days of service remaining,and many continue to return to the appwhile throughout the remainder of the term.

    You can leverage this window to provide offersfor discounted service that motivate customers to continuesubscribing while showcasing the value of your subscription.

    Consider distributing these offers in your appto reach the customers who are still utilizing aspectsof your subscription.

    Here's another example from Ocean Journal.

    They're presenting an offer for 50 percent offof a customer's next month of servicein the home screen of their app.

    In the message,they've highlighted the customer's progresstowards their monthly surfing goal, and clearly communicatedthe subscription's impact in helping them achieve it.

    In the event that a customer fully churnsfrom your subscription and loses access to your service,you can use subscription offers to try and win them back.

    However, it's important to determine the optimal timeafter a customer churns to begin providing discountsfor your specific app.

    Keep in mind that providing discountsas soon as your customer's subscription endsmay lead to unintended behavior,as users may cancel their plans in order to receive discounts.

    Once you begin distributing these offers,consider giving deeper discounts as the amount of time churnedcontinues to grow.

    And since these customers are likely no longer using your app,the most effective method to distribute these offersare through emails and push notifications.

    Here's how this might look if Ocean Journalsurfaced preexisting customers with an offer.

    They're using push notifications to distribute an offerfor 50 percent off the next three months of service.

    If the customer dismisses it,they can consider sending another offer in the future.

    But they should avoid sending the customer too many offersto prevent the behavior from feeling spammy.

    So billing retry, billing problem message,billing grace period, and subscription offersare some of the ways the App Storehelps retain your customers for longer.

    Now that we know what these features areand how to use them,Hemant will discuss how to successfully engineer them.

    Hemant: Thank you, Bryan.

    In this section, we'll discuss the best practices you'll needto consider when implementing App Store featuresto prevent churn and retain subscribers for your app.

    Before the subscription renewal,the App Store checks for any billing issuesthat might delay or prevent the subscriptionfrom being automatically renewed.

    These checks include ensuring a customer has an activeand valid payment method on fileto process the subscription renewal.

    In case they do not, the App Store proactivelynotifies the customer to update the payment method on filebefore the subscription renewal.

    To deter fraud, the App Store conducts fraud and risk checkson the customer profile and payment method on file.

    And lastly, when applicable, the customers are also notifiedabout upcoming subscription renewal.

    In addition to all these checks,App Store provides a set of features to prevent churnand retain subscribers, which Bryan covered earlier.

    Let's begin by taking a look at the best practicesyou need to consider when implementing these features,starting with features such as billing retryand billing problem message.

    These features are a platform benefit and are enabledfor you by default to prevent involuntary churn.

    A subscription automatically enters a billing retry periodfor 60 days when it fails to renew due to payment issue.

    During this period,Apple attempts to recover a subscription.

    And depending upon the scenarios,the subscription status may change.

    Let's cover scenarios that you need to account forwhen a subscription is in a billing retry period.

    Here, we have a customer whose subscription failed to renewdue to payment issue and is in a billing retry period.

    To identify a subscription in billing retryand to stop providing service,you can use the StoreKit renewal state propertyinBillingRetryPeriod.

    This allows you to identify subscription statusand determine access to service without a need for a server.

    However, to receive updated subscription status in real timeyou can choose to enable App Store server notifications.

    Once enabled, you'll receive a notification typeDID_FAIL_TO_RENEW when a customer enters billing retry.

    Now, a subscription in billing retry can be recovered anytimeover the period of 60 days.

    And once recovered,you need to start providing service to the customer.

    So in this scenario, consider the customerhas updated their payment method on file,which renewed their subscription.

    Once a subscription is recovered,the renewal state will be updated to subscribed.

    And you'll receive notificationDID_RENEW with subtype BILLING_RECOVERYindicating a successful renewal.

    Since the subscription is recoveredin the billing retry period,you'll have a new subscription expiration date.

    Now, for a scenario when the App Store reachesthe billing retry limitand is unable to recover the subscription,the subscription expires and the renewal statewill be updated to EXPIRED.

    And you'll receive App Store server notification EXPIREDwith subtype BILLING_RETRY.

    In addition, some of the best practicesyou need to consider for subscriptionin billing retry include:is to not merchandise a customer if they arealready in billing retry since the App Storeis in process of recovering the subscription.

    This is also important if you provide service cross platform.

    As Bryan mentioned earlier, if the customer is recoveredwithin 60 days, they continue to accruetheir days of paid service, which can help you increaseyour proceeds to 85 percent.

    It's important to know that the customer can opt outof billing retry by cancelling the subscription.

    In this case, App Store stops the billing retry attempts.

    A subscription can also enter a billing retry when you removean auto-renewal product from sale.

    This subscription is not recoveredunless the auto-renewal product is cleared for sale againwithin 60 days.

    You can use the StoreKit property expirationReasonand expirationIntent on a serverto identify subscriptions in this state.

    And to summarize, you can validate your appand server implementation using App Store sandboxfor a subscription in the billing retry state.

    To further accelerate the subscription recovery,App Store sends a billing problem messageto customers in app to help them resolve the issue.

    You can choose to defer the billing problem messagefor a customer if you do not want to interrupttheir specific app experience.

    To do so, you can useStoreKit Message API, property .reasonand value .billingIssue.

    For more information, see WWDC23 sessions"What's New in StoreKit 2 and StoreKit Testing in Xcode"and "Explore testing in-app purchases."Now, let's discuss the featureyou as a developer can adopt to handle the impactof involuntary and voluntary churn.

    We'll start by looking into the billing grace period.

    To enable grace period configuration for your app,navigate to your App Subscription sectionin App Store Connect.

    This will open up a dialog which will allow youto configure a billing grace periodfor your app.

    You can then select from available grace period duration.

    You can also select the eligibilityfor the billing grace period and select the environment.

    You can choose to enable it first in the sandboxor choose to enable it in both sandbox and production.

    Your selected configuration will be visible in App Store Connectonce you confirm.

    Once enabled, a billing grace period beginswhen subscription fails to renew.

    Here are all the billing retry scenariosthat we previously discussed.

    When you enable the billing grace period,you need to account for additional scenariosin the subscription life cycle.

    Now, let's illustrate the scenario for the customerafter enabling the billing grace period.

    Here, since the grace period is enabled, the customerwill retain full access to your app's paid contentwhile Apple attempts to recover the subscription.

    To identify a subscription in a billing grace periodand to continue providing service,the renewal state will be updated to inGracePeriodand you'll receive notification type DID_FAIL_TO_RENEWalong with subtype GRACE_PERIOD.

    A customer can recover in the billing grace periodwith no interruption to your paid days of serviceand the subscription expiration date remains the same.

    Once the customer recovers, the renewal statewill be updated to subscribed, and you'll receive notificationDID_RENEW with subtype BILLING_RECOVERY.

    A customer may not recover in the billing grace period,after which you can stop providing them the serviceas the customer enters in billing retry.

    And the renewal statewill be updated to inBillingRetryPeriodand you'll receive notification GRACE_PERIOD_EXPIRED.

    Similarly, these additional use cases can also be validatedin the App Store sandbox for both your app and server,when you enable a billing grace period.

    Lastly, now let's discuss subscription offers.

    We'll take a look at these two scenarios.

    And I'm going to cover things you need to considerwhen implementing a relevant subscription offerinto your app and server.

    In this first scenario, we try to reengage a customerwho has turned off auto-renewal,but still has remaining days of serviceto enjoy your app.

    Here we are using promotional offersas our tool to create subscription offersfor the cohort of existing subscribers.

    To identify subscription in this cohort, you can useStoreKit "RenewalStateProperty = subscribed"and renewal info property "willAutoRenew = false."On the server side, you can useSubscription Status API properties "status = 1"and "autoRenewStatus = 0."In addition, if you haveApp Store Server Notification enabled,you'll receive notification type DID_CHANGE_RENEWAL_STATUSand subtype AUTO_RENEW_DISABLEDin real time when the customer turns offthe subscription renewal.

    Now, some of the best practices you need to considerwhen implementing a promotional offeris to merchandise the offer details to the customerusing the promotionalOffers property of StoreKit,instead of hardcoding or fetching it from your server.

    For promotional offers, it's important to send a signatureat the time of purchase,for example, right before merchandising offer.

    This will help you to ensurethat you have a recent time stampand are using up-to-date offer configuration.

    To streamline the processand to help you generate signature,we have introduced App Store Server Library,which provides you with a frameworkto securely generate signature on your server.

    In addition, it helps you easily adoptApp Store Server API and notifications.

    To identify promotional offer redemption, you can useJWSTransaction, which will contain offerType value = 2and the offerIdentifier.

    The offerIdentifier will contain the valuewhich you have configured in App Store Connectwhen setting up the promotional offer.

    You'll receive the notification typeOFFER_REDEEMED in real time when the customer redeemsan offer along with all applicable subtypes.

    For more informationon promotional offer best practices,watch the WWDC sessions "Meet App Store Server Library"and "Subscription offers best practices."Now, for a scenario when a customer is churnedand may not be actively using your app.

    To identify subscribers in this cohort,you can use StoreKit: RenewalState property = expiredand renewal info property: willAutoRenew = false.

    On the server side, you can useSubscription Status API properties "status = 2"and "autoRenewStatus = 0."On App Store Server Notification,you'll receive notification type EXPIREDand subtype VOLUNTARY when the subscription expires.

    For this scenario, we are using offer codeas a tool to win back the customer for two reasons.

    First, it will help you merchandise and provide offersto customers within your app or outside the app.

    Second, you can embed the offer code deep linkin push notification or emailsto begin the offer redemption flow and win back the customer.

    For more information on offer code implementationand best practices, watch our Tech Talks"Subscription Offer Codes"and "Optimize subscription for success: acquisition."Now, the App Store provides youwith all the helpful transaction information on the deviceand server that enables you to entitle customers accuratelyand provide service.

    Expanding on that, we introduce new propertiesin transaction information to help you knowyour App Store product and offer configuration,which includes properties such as price, currency,and offerDiscountType.

    You can leverage these properties to understandyour offer redemption details.

    You can also leveragethe recentSubscriptionStartDate propertyto calculate the total period the customer was subscribedto a subscription.

    This will help you get an idea about customer loyaltyand make the decision to provide subscription offer.

    Let's take an example.

    A customer purchased a monthly subscription on January 25and continuously renewed over a monthly period.

    However, on December 5, the customer decidedto disable the subscription renewal, which may resultin the subscription getting churned on December 25.

    We'll consider this period as a safe period.

    During the period, you can make a proactive decisionto present a subscription offer to the customerbased on their length of the subscribed period.

    If the customer chooses to accept the offer,they will renew on December 25.

    To summarize, Apple initiated featureslike billing retry and billing problem message --and in addition, adopting featureslike billing grace period and subscription offers --will help you prevent churn and retain subscribers for your app.

    For more information on getting startedwith subscriptions or details about our subscription tools,you can find auto-enable subscription documentationon developer.apple.com.

    This documentation contains all resourcesand applicable links for your reference in one place.