Welcome to the Sub Club Podcast, a show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors, and builders behind the most successful apps in the world to learn from their successes and failures. SubClub is brought to you by RevenueCat. Thousands of the world's best apps trust RevenueCat to power in-app purchases, manage customers, and grow revenue across iOS, Android, and the web. You can learn more at revenuecat.com.
Let's get into the show. Hello, I'm your host, David Barnard. Today's conversation is shorter than usual and will be featured in RevenueCat's State of Subscription Apps report. Each episode of this series will explore one crucial metric and share actionable insights from top subscription app operators. With me today, Lucas Level, VP of Product at Paddle. On the podcast, I talk with Lucas about maximizing success with web subscriptions, how web payment flexibility enables better user experiences.
and why making it hard to cancel can ultimately hurt your business more than it helps. Hey, Lucas, thanks so much for joining me on the podcast today. Thanks very much for having me, David. Looking forward to it. So this is the first year RevenueCat has ever worked with partners to include additional data in the status subscription apps report. And I actually have not looked at this data yet, but Paddle has shared some web data that will be in the report.
And so I didn't want to talk through the data today, but I know you personally and the paddle team work with a ton of apps on web to app and, you know, being successful on web payments outside of the app stores. So let's just kick it off with some of the top recommendations and what you see working on the web for subscription apps.
Yeah, sure, sure. So I guess from our vantage point, we're really excited about Web2App. So Paddle is an end-to-end billing and payments platform on the web, and we're working with lots of mobile app companies. on their web revenue channels and how to best deploy them and we've seen as you pointed out and some of this data will be shared in the report a big increase in mobile app companies who are looking at the web as an opportunity to acquire customers
Yeah, I feel like that's all I've been hearing about the last two or three years. It's like web, web, web. Like, how do we get web onboard working? Yeah. Yeah, I think it's really interesting. I think there are some key reasons why that's happening. And I won't sort of...
bore everyone with that around sort of attribution and perhaps some gross margin efficiency around costs. But I think a lot of people are coming to the web and realizing that there are actually other advantages to the web around expanding your audience types, being able to reach users who are more present on the web.
might not be searching for apps in the App Store, and also leveraging a lot of the billing flexibility that you get on the web. So web billing has been around for a long time, and it can provide a bunch of flexibility and tooling that you can use to your advantage on the web, which I think...
is really interesting. So the way I think about it is very much, it's not just a cost-saving opportunity, it's actually a growth opportunity. There's a lot of opportunity on the web in terms of deploying different billing models and deploying different types of pricing experimentation and A-B testing. in a way that you're a little bit restricted with on the app stores. So I think in terms of how to best think about it, I think the starting point for me would be thinking about...
like why people will visit your website on the web or how are people going to come to you on the web. We see companies who are driving traffic to the web through content marketing and using content marketing as a landing point and then converting users into sort of...
paid users on the web and then pushing them to the app there. But we're also seeing a lot of companies deploy web funnels. And I think especially for mobile apps that have quite a large component of personalization, we're seeing web funnels be a really effective way.
um of driving traffic to the web so the classic categories there are health and fitness we're seeing a lot of web funnels in health and fitness education as well, so language learning apps, wellness apps, who are all using that effectively and introducing the web funnel off the back of a paid ad on a social media platform, for example, and seeing really good conversion rates and then also good renewal rates.
as well on those subscriptions too. So a lot of reasons to consider the web but I think it's also how you build a really effective web channel is very much dependent on the type of mobile app that you are and the type of customers or the type of users that you're looking to acquire.
Yeah, it does seem like, and you kind of alluded to it already, is that apps that do kind of have a higher intent user coming in, health and fitness being something we talk about constantly, is that somebody looking to get fit. and or lose weight or kind of these other categories of health and wellness, there's like a very strong, deep.
personal motivation to do those things and then also a higher willingness to pay i mean people are willing to pay a lot for their health they may be spending 50 100 bucks a month on supplements and gym memberships and it can easily add up to hundreds of dollars a month
month. So these health and fitness apps are relatively inexpensive comparatively. And then education and other things. I think there's a lot of categories where you do see the web work better. And then maybe some categories where you don't. Any kind of insights?
where you've maybe seen apps struggle and then any other categories that you think have worked especially well? Health and fitness is working really well. Wellness is working well. Education and language learning is working really well. I think some areas that we're yet to see.
really take off and i probably wouldn't position this as like these companies are struggling but rather they haven't shown as much intent yet is probably in like productivity is a good example i think the lack of personalization around how you use the tool
for example, a note-taking tool or something like this, is not as interesting, I think, when you're thinking about a web funnel and building buying intent through a web funnel. So I think that's an example. Media, perhaps, is another example. I don't have a lot of great examples around.
who it's not working for i think it's more what are the categories that are leading this trend and i think there are other ways in which those categories that perhaps aren't investing in it as much to sort of start thinking about it in the future but at the moment it's very much the apps with a high component of personalization that are seeing really really good results with web funnels
What are the things, some of the things that you see working really well? You keep talking about web funnels and, you know, we've talked about this a lot on the podcast in the past, different forms of onboarding, different forms of kind of like building up intent. What are you seeing working in that? Mobile app companies that are thinking about the journey end-to-end are seeing a lot of good results. So thinking deeply about the web funnel experience.
doing a lot of experimentation on the paywall, and then also taking that through to the checkout as well are seeing great results on conversion. And I think companies that are looking at those journeys and really thinking about how we can reduce friction in that journey are seeing a lot of success.
and also understanding the routes that people are taking through the web funnels and how they can produce a buying signal and looking at that data really carefully, I think is good. You know, we very much think about, you know, your success of the web. If you had to boil it down to two key... data points or two key numbers that matter it's very much your conversion through the funnel and your renewal
at the end of the first subscription cycle. So how many users get through the funnel and convert based on a certain amount of ad spend? How many of those converted users actually end up renewing? It's easy to get distracted by the former and not think deeply about the latter. And I think the companies that are seeing a lot of success are thinking really deeply about retention and deploying retention tooling and using things like cancellation flows and downgrade flows.
to reduce churn and to drive the renewal rate in the right direction to really boost and maximize the ROI of the web revenue channel that they're working on. So I do want to dive deeper into retention here in a bit. But before we do that, I wanted to talk a little bit about some of what you just mentioned is that there is so much more flexibility on the web with how you charge the business models and the ways you approach.
monetization and one of the things i hear about constantly i've been frustrated with the app store for years is that they don't offer like per seat licensing b2b is really hard if you have a great b2c company and somebody comes and says hey we want to buy 20 licenses for all of our employees. Like there's not really a great way to do that on the app store, even like in a B2C sense where a.
employee wants to use an app for work, but they have a personal app store account. It's like they would have to like pay for it with their personal credit card and then have this whole like reimbursement process. And so the web does offer so much more flexibility.
and business model and monetization and how you do things. What are you seeing be successful there? I think it's interesting because to be honest, based on what we're seeing and we're primarily... working with b2c so sort of consumer subscription apps at the moment and most of them tend to be deploying quite similar models on the web as what they are on the app but we are starting to see signs of some companies sort of better understanding
the billing flexibility that the web provides and starting to tinker and play with some different types of models. To be honest, I think a lot of consumer apps don't know what they don't know. And so there's definitely an education piece on our part to sort of show them what's possible.
on the web and support them in exploring different pricing and packaging scenarios and how they can think about setting up their billing models. I also think we're going to go further and further in this direction because If you look at AI and how AI is starting to be embedded into different software products, that's really changing the way that we price as well. So a lot more consumption usage-based pricing, tying pricing to the value that you receive from a product as opposed to
as the standard price, irrespective of how often you use it. I think we will start to see that roll into the consumer side a little bit more as consumers start to use more of these products. I think what we're seeing, at least from our vantage point, is sort of bringing over the simplicity.
of the app store into the web. We are seeing more flexibility on the retention side, I think. But I think from the billing model and pricing model perspective, I think we've got a way to go before we see mobile apps really start to challenge some of those norms that have been ingrained in them based on some of the restrictions.
Yeah, I mean, that's part of the whole conversation the last few years around web is that it is this kind of whole new opportunity that most apps aren't used to working. And so there is like this kind of exploration phase. And I agree. I mean, I think we're.
We're just going to see a lot more experimentation over time with this different kind of pricing and packaging and B2B opportunities and company billing and stuff like that. So it's an interesting opportunity for folks to be exploring, even if you're.
not seeing a ton of it yet the other thing i do hear a lot about from a web billing perspective is winbacks is that if you're going to offer a discounted subscription to try and win somebody back a great way to do that is to go ahead and send them to the web you know it's a lot higher intent when you say hey percent off or 25 off if you go to the web are you seeing those kinds of things to be successful we are yes we are we are seeing
quite a number of examples of discounted pricing on the web and using discounts of pricing in winback campaigns, as you mentioned. We're even seeing companies choose to offer standard pricing at a lower rate on the web, just accounting for the fact that you know the fee component is much smaller on the web and choosing to pass on some of those savings to the user
I think there are lots of companies that are starting to dabble in that space. And I think consumers will start to pick up on that. And I've known everyday people sort of pick up on the fact that, you know, purchasing X is cheaper on the web than is on the app. So I'm going to go and do that. Or I'm going to cancel my subscription on the app and resubscribe. the web because of a cheaper price. There is some complexity around that.
Right around like when you can sort of link from the app store, how you sort of build those mechanisms. But it's definitely possible and something we're definitely seeing. Yeah. And, you know, I don't know that everybody's fully aware of this because I still get questions almost on a monthly basis from people.
like, wait, can I actually send people to the web? And the basic answer is that you cannot send people to the web from inside the app. Although there's even more flexibility now with both Apple and Google with special entitlements where you can't.
actually in the absence of the web, but then you still have to pay commission. It's all a bit complex. But as of, I think about two, two and a half years ago, there was a ruling. I think it was the Japan Fair Trade Commission that kind of pushed Apple on this where...
Once you have somebody's contact information, even if you collect it with inside the app, Apple tried for a while. Like, hey, if you collect an email inside of the app, you can't then use that email to send people to the web. But that's clearly very anti-competitive. And so they backed off.
on that and so any contact information that you collect within the app can be used to then push people to the web so i've even seen apps where if during that onboarding flow inside the app they do collect an email and the user does immediately subscribe. Then within minutes, they're pushing an email and maybe it even drops down as a notification while they're still in your app saying, hey, come to the web and save 30% or 40% or whatever that is. I mean, of course, Apple doesn't love that.
That happens. But like that is OK now, like they cannot and have stated in the rules that that is OK. So it can be a really powerful tactic to nudge those users and using email and text or other ways to do that. I think push notifications. are still under the rule of like, that's kind of technically in their ecosystem. Although I do still see apps doing that on occasion using push notifications instead of email or text. But yeah, I think a lot of people aren't aware of just how.
much they can use even those channels to push people to the web. And this is why we're seeing, this is why we're seeing, especially in gaming, a lot more account creation. So apps that typically didn't require account creation, so you were just in a game and you just sort of just play the game, are now asking you to create an account, put in your name, put in your email address for the purpose of being able to retarget you in different ways.
through other channels that aren't directly the app. It makes sense in gaming, right? Because you're purchasing things on the fly. So if you're playing in an app and you're purchasing gems or tokens or... swords or whatever, right, in-game, like in-game economy items. And it's not just a one-off purchase with a renewal at the start. There is a big drive to push them to a web store to make those purchases where they're offering bundled products at discounted prices.
But to do that, they need to be able to contact you through other means. And so we're seeing a lot of that through the evolution of the web store in gaming, right? The Epic Games Store is a great example of a very successful strategy that is really working for Epic Games. And there are other great examples of that as well. Brilliant point, and you're spot on. Yeah, I mean, I even saw that.
played a Pokemon go with my kids for years now. And I just got an email like a few weeks ago of web exclusive bundles that like really highlighted the deals that you can get on the web for Pokemon go. So yeah, I've been seeing it more and more as well. So I did. want to transition and start talking a little bit more about retention and churn mitigation on the web. I think it's no secret that some of the reason.
Some apps do see better retention on the web is that it is just harder to cancel. And I mean, famously, you know, New York Times and others have made you call to cancel if you have a web subscription. And it is. it is way easier to cancel on the app stores. And so some of the boosts that you're going to see on the web is just people, it's daunting. I'm going to have to go log in. I'm going to have to dig through settings and find a way to cancel. But ultimately, like you're not getting.
to build a great business on people not being able to cancel, preventing them from canceling. Those are the people who are going to be frustrated with your brand. They're going to be telling their friends not to subscribe because they had a hard time unsubscribing.
great business, you don't want to put huge barriers in the way of canceling you know you want users to be engaged with the app and actually getting value so what what are some of the ways that you've seen the web work well for retaining users and doing so in a way that actually is like consumer friendly i think this is really important and i actually agree with you like you can't build a sustainable business on dark ux patterns right we see that on both sides we don't just see that on
the cancellation side, you do see that upfront as well at the paywall around like transparency around pricing, right? Because the web is much more flexible. You're not sort of under the guise of a governance structure like Apple, well, you can push boundaries around that sort of thing, mislead consumers in certain ways, and there's just no way you're going to build a sustainable...
business out of that so like we would never ever encourage that the part that is perhaps different on the web is tooling available to you in order to prevent churn there are a number of examples of this and i think your point about like the ftc's new click to cancel
rule is spot on and on the web companies need to be really aware of that there are options for you so when someone clicks a cancel button and it might be a one click cancel button but you can present a cancellation flow which can ask some questions about why are they cancelling
and present some alternative options. You can build ways to trigger a downgrade flow or a pause flow instead of the cancel flow, which means you might be downgrading them from one plan to another, but you're not losing them entirely. You can also deploy reactivations and win back campaigns in different ways on the web, which I think is really interesting as well. So I think the web just gives you more flexibility around some of the customization you can build into.
your flows to either mitigate churn in the first place or when churn is happening perhaps get a better result than you might have been able to get on the app store and to your point i think there's an opportunity on the web too to create
better experiences than you get on the app store like yeah it's super easy to just go cancel on the app store and that is a good consumer experience like feeling like you have control over the subscription but with like being able to pause being able to refund being able to
offer more flexibility to customers on the web, I do think can actually create better customer experiences. You know, one thing I've heard from people that's actually working pretty well is instead of a free trial, offering a 30-day money... back guarantee it's like you can't do that on the app store you can't offer a money back guarantee you can't automatically like refund somebody so as an app developer you can create better experiences on the web through that flexibility where you are
driving that retention and helping people stay retained, but then offering these better experiences on the web. And I think that's, it's a huge opportunity and kind of like we were discussing earlier as kind of a... for app developers in any way. A new thing that's really been growing a lot the past few years, I think there's still a ton to explore there. Absolutely. It's really exciting. Really exciting. Lots of opportunity, as you said.
I think on both stages in the funnel, like the two most important things, as I said earlier, it's conversion through the paywall and the checkout and then keeping and holding onto that customer. And I think at both of those points in the user journey.
The web is giving you opportunity and flexibility and tooling to do things that you are unable to do in the app store. And that's the unlock that people are realizing when they come to the web. They're coming for the fees and staying for the flexibility in a way, right? The catalyst is sort of better attribution and lower cost transaction fees.
But they get here and they go, wow, I have all of this flexibility around me. I can do different things. I can experiment in different ways. I can try and build different customer experiences to support my users on their journey, to keep them, to engage them. And I think we'll continue. to see as Web2App keeps evolving, we'll continue to see mobile app companies.
push some of these boundaries, explore what's possible. And yeah, we're here along for the ride and we're really enjoying it and learning a lot, learning a lot from a lot of these mobile app companies. Awesome. Well, it's been really fun chatting through this with you and I'm similarly excited about what we'll see continue.
need to grow and change on web building for apps. Anything else you wanted to share as we wrap up? We're going to include links to your personal LinkedIn and to Paddle, of course. But anything else you wanted to share as we wrapped up?
No, I think you're good. Thanks for having me on. As you just mentioned, very happy for people to reach out to me via the typical channels, LinkedIn, X, Twitter, whatever we call it these days. But yeah, thanks very much for having me on, David. It's been a great conversation. thanks so much for listening if you have a minute please leave a review in your favorite podcast player you can also stop by chat.subclub.com to join our private community Thank you.