Subscription App Glossary

An approach to product testing where a certain percentage of users are split into two cohorts, A and B, and each are shown a different version of the app. Variables will include things such as copy, design, and pricing. A core metric is defined at the beginning of the experiment to determine the winning version (or a tie, if the difference is too small).

Find out more about A/B price testing for mobile apps in our guide.

This is the average amount of money a single user generates within a specific timeframe. It’s similar to realized lifetime value (LTV), but whereas ARPU is revenue over a defined period of time, LTV is revenue over the entire course of a single user’s relationship. To calculate ARPU, you divide your total revenue by your number of users over the period of time you want to measure (e.g. over a month).

This is a stage of the customer lifecycle (after the “new user” stage) that involves a user performing the app’s core action for the first time, signing up to a trial, or making their first purchase. What the activation stage looks like for an app will depend on its monetization model.

Learn more about the stages of the customer lifecycle in our guide to lifecycle analytics.

App store optimization (ASO) is the process of enhancing an app’s visibility and discoverability within app stores, such as Google Play Store and Apple App Store. By optimizing factors like keywords, app title, description, and visuals, ASO aims to increase app downloads, improve search rankings, and boost user engagement.
Find out more in our comprehensive guide to app store optimization.

Apple’s platform that enables developers to reach users searching for apps on the App Store by displaying their ad in the search results. ASA allows advertisers to set up campaigns, define targeting criteria, and define bids based on user demographics, keyword searches, interests and more.

We cover ASA comprehensively in our Apple Search Ads best practices guide.

A feature that automatically renews a subscription at the end of its term, unless the user cancels it. Having a user on auto-renewal provides a stable and predictable source of income, so it’s important to have a lifecycle engagement strategy that keeps users from turning the feature off.

A soft paywall permits limited access to certain content and features while requiring a subscription for full access. Unlike hard paywalls, soft paywalls allow users some level of engagement before requiring a subscription, offering a taste of what’s behind the paywall. When using a soft paywall, it’s a balancing act — making a free experience good enough to encourage a large volume of users and making premium features tempting enough to convert subscribers.

The period of time for which a user is billed for a subscription. Subscription durations can be 1 week, 1 month, 2 months, 3 months, 6 months or 1 year.

The act of ending a subscription before its term is up. Cancellation can be initiated by the user or the app developer. Developers must provide clear and easy-to-understand cancellation policies to avoid user frustration.

Churn rate measures the percentage of active subscriptions that were lost during a given period that have not yet resubscribed. Churn rate should be viewed as a health metric for your app: a stable or declining churn rate indicates a healthy, growing business. Keep in mind that churn for mobile apps can be relatively high in comparison to web SaaS products.

RevenueCat allows you to easily monitor churn with our Churn Chart.

The amount of money spent on acquiring a single customer. It’s calculated by taking the total amount of money spent on acquiring new customers (including various marketing and sales expenses) over a given period of time and dividing it by the number of new customers acquired over the same time period. Changes in CAC can help inform decisions about specific marketing and sales initiatives.

The practice and tooling of managing customer relationships across multiple channels in an effort to develop a better understanding of customer needs, increase engagement, and improve the overall user experience. CRM can involve collecting data from several sources, building profiles of customers, and using analytics to track their behaviors, preferences, and interests in order to provide more personalized experiences.

Learn how CRM can be employed by subscription apps in our CRM optimization for subscription apps guide.

The act of offering a lower-priced subscription tier or less expensive premium features to a customer who has cancelled their subscription or is considering cancelling. Downselling is a way to retain customers who are at risk of churning. By offering a lower-priced subscription or features, developers can convince customers to stay with the app while still generating revenue.

A limited time period during which users can try out the app or a premium feature for free. Free trials are a common strategy for app developers to entice users to upgrade to premium features or subscribe to the app.

A business model where the app is free to download but users are charged for premium features or content. This approach allows users to get acquainted with the app before committing to paid subscriptions, and it enables developers to reach a wider audience by providing free access for people who are not willing or able to spend money on their apps.

A tool from Google designed to help developers promote their apps across the Google network, including Search, Display, YouTube and the Play Store. GAC allows advertisers to define their targeting criteria, create ads and campaigns, track performance, and optimize campaigns based on insights from real-time analytics.

Read our definitive guide to Google app campaigns.

Google’s set of components that enables developers to add In-App Purchases (IAPs) and subscriptions within their Android apps. Google Play Billing Library 5.0 is Google’s latest version of the library that radically changes the structure used to define subscription products and will require apps to overhaul their subscription management backend and implementation.

Read about all the changes in Google Play Billing Library 5.

A period of time after a subscription payment is due during which the user can still access premium features without penalty. Grace periods are a way for app developers to retain customers who may have missed a payment or had a payment declined. By offering a grace period, developers can avoid immediately cancelling a subscription and potentially retain the customer.

Hard activations refer to specific actions taken by users within an app that signify a higher level of engagement or commitment. These actions go beyond mere app installs or sign-ups, encompassing behaviors like completing a key task or reaching a particular usage milestone. By monitoring hard activations, app developers and marketers can gain a clearer understanding of user value and app performance, enabling more informed decision-making for acquisition and retention strategies.

A hard paywall strictly prevents access to specific content unless the user has paid for a subscription. Unlike soft paywalls that allow limited free access, hard paywalls make no exceptions, necessitating a paid subscription for access.

Read about the pros and cons of a hard paywall in our guide.

A feature allowing users to buy additional content or features within the app. In-app purchases are a common monetization strategy for app developers, as they allow users to purchase premium features or content without leaving the app. In-app purchases can be used in conjunction with other monetization strategies such as subscriptions or advertising. Developers can offer in-app purchases to unlock additional features, remove ads, or access premium content.

The ratio of the lifetime value of a customer to the customer acquisition cost. This ratio helps app developers to understand the profitability of their customer acquisition efforts. A higher LTV/CAC ratio indicates that the app is generating more revenue from each customer than it is spending to acquire them.

Learn more about metrics for subscription app growth in this blog.

The estimated amount of revenue a single user will generate for the app developer over the course of their entire engagement with the app. This is an essential metric for measuring the success of pricing experiments.

Find out how to run price experiments in our guide to mobile price A/B testing.

The total amount of revenue generated by all active subscriptions in a given month. MRR is a key metric for app devs as it provides an indication of the app’s revenue growth and stability. You can use MRR to track trends over time and identify areas for improvement. MRR is calculated by multiplying the number of active subscribers by the subscription price.

Easily measure MRR with RevenueCat’s MRR Chart.

An app that is available on multiple platforms, such as iOS and Android.

Net Promoter Score (NPS) is a measure used to understand customer satisfaction and loyalty for an app. It’s based on one simple question: “How likely are you to recommend our app to a friend or colleague?” Users rate this on a scale from 0 to 10. Scores of 9-10 are ‘Promoters’ who love your app, 7-8 are ‘Passives’ who are satisfied but not enthusiastic, and 0-6 are ‘Detractors’ who are unhappy. A high NPS indicates strong customer satisfaction and is often linked to growth and positive word-of-mouth, while a low NPS can signal potential issues and customer churn.

Further reading: How to send an NPS email to app users

App monetization approach that requires users to pay to download the app, while also offering additional in-app purchases for more features or content.

A feature that restricts access to premium features or content until the user pays for a subscription or in-app purchase. Paywalls restrict the viewing, downloading, and sharing of content until payment has been made. Effective paywalls require frequent testing and experimentation.

Get inspiration for paywall test ideas from Superwall’s Jake Mor.

The act of renewing a subscription after it has expired. Renewals are an important metric for app developers to track as they provide an indication of customer retention and satisfaction. Developers can offer incentives for customers to renew their subscription, such as discounts or exclusive content.

The percentage of customers who choose to renew their subscription. It’s an indicator of the long-term value that you provide for your customers. Our data shows that the median renewal rate for monthly subscriptions at the first renewal is 56% and this rate increases over time. For yearly subscriptions, the median renewal rate is 27% after their first year.

Find out more about monthly vs annual subscriptions in our blog.

The percentage of customers who haven’t canceled their subscription within a given time period. Not to be confused with renewal rate. Our research shows that the median retention rate for weekly subscriptions is 3%, for monthly it’s 11%, and for annual it’s 28%.

Learn more about subscription retention rates in our guide.

Mobile app subscription and analytics platform that makes it simple to implement in-app subscriptions, measure monetization performance, run pricing experiments, and more.

Sign-up for free to find out how.

A set of tools that helps developers build applications, or parts of an application, for a certain platform. SDKs typically include APIs, libraries, development tools and documentation. RevenueCat’s SDKs, for instance, allow you to implement subscriptions in your app quickly and easily, across a range of platforms.

StoreKit is Apple’s framework that allows developers to create, publish, and manage in-app purchases and subscriptions within their applications. It also provides features such as reviewing payment history, subscription management, responding to user inquiries and providing promotional codes. The latest version of StoreKit, StoreKit 2, was released in September 2021.

Learn more about how to use the framework in our StoreKit 2 tutorial.

A monetization model where users pay a recurring fee to access premium features or content within the app. Subscription models are a popular monetization strategy for app developers as they provide a predictable and recurring revenue stream. App developers must carefully balance the price of the subscription with the value of the premium features or content to ensure that users see the subscription as a good value. Other monetization models include free, freemium, paid, and paymium.

The percentage of users who convert from a free trial to a paid subscription. Trial conversion rate is an important metric as it helps you to understand the effectiveness of your trial strategy and whether users get enough value out of your app to pay for it. Our data shows that for the majority of apps, on average, 38% of users who start a trial end up subscribing.

Learn more about trial conversion rate in our guide for subscription apps.

A limited time period during which users can try out premium features or content before committing to a subscription. Trial periods are a common strategy for app developers to entice users to upgrade to premium features by allowing users to discover the app’s value.

The act of using a product or service on a trial basis before committing to a purchase. Trialing is a common strategy for app developers to entice new users to try out their app. By offering a free trial period, developers can create a sense of urgency and convince users of the value of the app.

The old name for Google App Campaigns (GAC).

The act of convincing a customer to upgrade to a higher-priced subscription tier or purchase additional premium features. Common incentives include offering additional features, discounts, or exclusive content.

The measure of how easily an app can be shared and recommended by users. Viral user growth is very powerful as your users are doing the hard work for you and the growth can be exponential. Virality is generally measured by K-factor — one calculation for K-factor is i*c = k, where i = the number of app invites sent per customer and c = conversion rate per invite.