Apple Adds Subscription Billing Grace Period

September 21st, 2019

Apple Adds Subscription Billing Grace Period
David Quinn

by David Quinn

VP of Strategy & Partnerships at Gummicube, Inc.

App subscriptions can be a great source of income for the developers, especially when the subscriptions automatically renew. However, there are instances where a user cannot pay on the exact date of renewal, whether it’s due to credit card issues or a temporary lack of funds. While this previously would have resulted in a sudden cancelation, Apple is adding a “grace period” for subscribers, which can help subscription apps keep their retention and engagement high.

Auto-Renewal Grace Period

Until now, if a user’s subscription failed to automatically renew, they would be instantly cut off from the app’s subscription-based features. This can result in a loss of usage for the app and an increase in uninstalls known as “involuntary churn.”

Now, developers can opt in to allow users extra time to fix any issues that would prevent auto-renewal. For instance, if a user’s credit card expired before they could update their App Store billing information, they can now have extra time to add a replacement card.

Depending on the duration of the subscription, users can have six to sixteen days. During that time, they will still be able to access the app’s content.

This will not require any extra programming by the developers, although they will need to manually opt in. Google Play offers a similar feature, which has helped prevent involuntary churn.

Why This Matters

Maintaining users is important to an app’s success, both in terms of income and App Store Optimization.

If a user’s subscription ends, they may uninstall the app until they can fix their payment issues. There’s no guarantee that they will reinstall the app again; losing the user can have a detrimental effect on the app’s placement in the store. Keeping users onboard as they fix their payment can keep user activity and installs up.

Uninstalls can send a negative signal to the App Store. If an app loses users, it could lose keyword rankings in turn. Gaining users is important for App Store Optimization, but retaining them is too.

There’s the monetary costs to consider as well; even if users eventually subscribe again, the potential loss goes beyond the time they spend unsubscribed. When a user first subscribes to an app, Apple takes 30% of the profits from the subscription for the first year. After that year is up, Apple only takes 15%. If a user’s subscription ends and they do not re-subscribe for 60 days, the time they’ve spent subscribed essentially resets and Apple will take 30% of the subscription price again.

Given the importance of subscription revenue to apps, preventing user loss and keeping the maximum amount of their subscriptions can make a big difference.

Subscription Services

Apple has been adding several new ways to support subscription apps over the past few months. Recently, it began allowing developers to market free trials of their apps in the App Store search. Search accounts for 70% of app installs, so this can help improve app discovery.

Apple is also helping apps maintain users with subscription discounts. This can assist with both acquiring new users and maintaining existing ones who might be on the fence about continuing their subscription. If users uninstall a subscription app before they close their account, Apple will now offer a cancelation prompt to remind them.

Of course, Apple has strict rules and regulations for subscription services. Apps with subscription services should ensure they follow the guidelines carefully, as failure to comply can result in removal from the App Store. This is more damaging to an app’s optimization than uninstalls, since being removed from the store will require the app to rebuild all its keyword indexation and rankings from the ground up.

Want more information regarding App Store Optimization? Contact Gummicube and we’ll help get your strategy started.

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