Two pricing strategies for mobile apps | Starter Story

3 min

•Sep 30, 20258 months ago

Summary

The episode explores two primary monetization strategies for mobile apps: ad-based revenue for engagement-heavy games and subscription/in-app purchase models for utility-focused tools. The host shares how implementing a hard paywall with free trial conversion on Puff Count increased conversion rates to 20-25%.

Insights

App monetization strategy must align with user behavior patterns and session length expectations
Hard paywalls with mandatory free trials significantly outperform soft paywalls and ad-based models for tool apps
Conversion rates can increase 5-10x by shifting from ads to subscription models when user engagement patterns don't support ad revenue
Free-to-paid conversion requires removing friction through clear paywall positioning rather than gradual monetization

Trends

Hard paywall adoption becoming industry standard for SaaS and utility mobile appsShift away from ad-supported models for non-gaming utility applicationsFree trial with mandatory paywall as preferred conversion funnel over freemium modelsSubscription-first monetization strategy replacing ad-dependent revenue modelsUser commitment mechanisms (free trials) driving higher conversion than optional paywalls

Topics

Mobile app monetization strategiesHard paywall implementationFree trial conversion funnelsAd-based revenue modelsIn-app subscription pricingFreemium vs. hard paywall comparisonUser onboarding and paywall placementConversion rate optimizationGame monetization vs. utility app monetizationSaaS mobile app pricing

Companies

Puff Count

Tool-focused app where hard paywall with free trial increased conversion rates to 20-25%

Grid

Game app successfully monetized through ads due to high user engagement and session length

Wordle

Game app where ad-based monetization strategy worked effectively due to frequent user engagement

Quotes

"For these tool-focused apps like Puff Count, ads don't really work because you're not expecting the user to be on your app for a super long period of time."

Host

"The kind of strategy that everyone is using now is the app is free. You go through the onboarding and then you hit what is called a hard paywall."

Host

"A hard paywall is unskippable. When I changed Puff Count to a hard paywall and I made users commit to a free trial before they could use any features in the app, it changed my business overnight."

Host

"My conversion rate shot through the roof upwards of 20-25%."

Host

Full Transcript

What's the best strategy to turn these eyeballs into paying customers? Yeah, so there's many different ways to monetize apps. In my first games, I monetized through ads because people were on the app all the time. They were playing the game a lot, so the ads worked well for Grid and Wordle. But for these tool-focused apps like Puff Count, ads don't really work because you're not expecting the user to be on your app for a super long period of time. So the way you monetize that is through in-app purchases. You need the user to either buy your app or commit to monthly, yearly, weekly subscription. The kind of strategy that everyone is using now is the app is free. You go through the onboarding and then you hit what is called a hard paywall. This is essentially a screen that asks you to pay, and if you don't pay, you can't access the features in the app. A hard paywall is unskippable. When I changed Puff Count to a hard paywall and I made users commit to a free trial before they could use any features in the app, it changed my business overnight. My conversion rate shot through the roof upwards of 20-25%.