When there's a free alternative to just about everything digital, how do you convince users to upgrade to a premium plan?
When Steve Jobs introduced mobile applications with the launch of the iPhone in 2008, few people could have predicted the integral role they’d come to play in our everyday lives.
In the beginning, apps were mainly utilitarian in nature. And they were pretty basic, too—camera, calculator, etc.
Now, apps help us accomplish everything from streaming media to learning a new language to banking. And while the digital era has led to a popular belief that content should be free, the fact of the matter is that maintaining a first-class app is costly. Delivering an exceptional user experience requires revenue—and that means getting at least some of your users to pay for your app.
But because mobile users are reluctant to pay for apps, converting them to paying customers is no easy feat. Upselling on mobile is both an art and a science—we’ll take a look at both aspects below.
Mobile app upselling—challenges and opportunities
When you think of mobile apps with upselling potential, the first ones that come to mind are probably streaming apps like Spotify or news apps such as the New York Times. But really, any app that offers content or a unique service is a great contender for upselling.
There are 3 approaches to getting users to pay for your app—you can provide a free trial, offer a limited freemium product, or gate your app from the get-go. The right moment and way to upsell will depend on which approach you choose.
1. Free trial
Free trials grant new users access to all content for a limited time in the hopes that they get hooked and choose to continue paying at the end of the trial period. In order for this strategy to be successful, an app has to deliver value quickly and effectively. A short time to value is critical for free trial apps.
A freemium strategy gives users access to key app features but reserves certain features and functionalities for paid users. The idea is to introduce users to the core value your app while keeping the best features gated and prompting them to upgrade to enhance their already valuable experience.
3. Premium subscription
Subscription-based apps fully gate all of their content and prompt you to pay right up front. The opportunity a subscription-based model presents is simple: It allows you to have a steady, predictable revenue stream that, in turn, means you can make better investments in your app.
The challenge, is getting enough users to subscribe. Competition is fierce, and it seems there’s always a free alternative.
Note that while they're normally distinct strategies, the 3 approaches aren't mutually exclusive. For example, the streaming service Viki (above) offers a freemium product, along with a free trial of their premium subscription.
How to upsell like a boss
Before we dive into examples of great mobile upselling, it’s important to note that upselling success lies in how (and when) you present the offer. There are 2 key things to consider when creating your upsell strategy:
Audience: Be mindful about who you’re talking to. You’ll get a higher upsell conversion rate by targeting your power users, or those who frequent your app most often.
Timing: Prompting a user to upgrade while they’re actively engaged with your app is key. Trigger upsell prompts based on in-app behavior. With the right product analytics, you’ll be able to hone even further in on the behaviors that correlate with the intent to buy (or upgrade). The better your timing, the better your conversions will be.
Targeting, timing, data—that’s all part of the science of upselling. Now let’s take a closer look at the art, which lies in the content itself and how its presented.
Here are 3 great examples of upselling in action:
Slack’s upsell strategy is simple yet effective. Users attempting to search for something in their chat history receive a gentle nudge letting them know that some results may be hidden because their workspace has exceeded 10,000 messages—the maximum available to search on a free plan. The timeliness of this message is key, since a user can’t find what they need in that moment due to the limitations of their subscription tier.
Dropbox also limits their freemium plan by product usage. But they’re a little more proactive about prompting an upgrade—rather than waiting for users to hit their storage limit, Dropbox uses a persistent but subtle in-app message.
A fun illustration combined with simple copy lets users know they can resolve their storage space issue with Dropbox Business. And a prominent “Try it free” call-to-action button makes upgrading feel like a low-stakes choice.
(This example comes from Dropbox’s web app, but its simplicity would translate well to mobile, don’t you think?
iHeartRadio’s upsell in app-message uses a nicely branded and mindfully worded modal to entice freemium users to take the next step. The message is simple—their premium app allows users to fully control their music streaming experience—and the call-to-action keeps the stakes low by emphasizing that users can test out a premium plan with a free trial.
Conveying the benefits of premium
App users tend to believe that upselling is only advantageous to the app owner—but this just isn’t true. Apps give users access to an abundance of content and capabilities. And in order to keep delivering value, apps need to generate revenue.
Many app users come to understand this notion over time, once they’ve had the chance to see the value in your app and build habits around it. That’s why timing upsell prompts correctly is critical—ask users too early in their journey and you risk pushing them away.
Messaging is equally important. While nobody likes paying extra, they’re unlikely to appreciate a money grab dressed up as a valuable opportunity. Be honest about the features and capabilities your premium tiers offer, and how they’ll benefit the individual user.
If you’ve demonstrated real value at the free or lower-priced level, the right-fit customers will convert—and stick around long enough to make a real difference to your app's success.