In the fiercely competitive landscape of subscription apps, paywalls are a vital tool for revenue generation. As a savvy app developer or content creator, it's imperative to find the perfect paywall strategy. The two most fundamental types of paywalls, hard and soft, each offer distinct advantages and cater to diverse audiences.
In this article, we explore the differences between hard and soft paywalls — their monetization strategies, user acquisition approaches that influence user behavior. Let's dive in!
A hard paywall is a restrictive barrier, preventing users from accessing content until they convert to paid subscribers. By embracing the hard paywall approach, your subscription app sets the stage for a straightforward, revenue-driven strategy that focuses on acquiring highly engaged users. They are relatively easy to develop and maintain terms of functionality and user flows.
Monetization strategy: subscription revenue only
For subscription apps adopting the hard paywall approach, revenue generation is almost exclusively reliant on converting free users to paying subscribers. As such, the strategy is to emphasize the value and exclusivity of the premium content to entice users to subscribe.
User acquisition: mostly ASO & paid marketing
User acquisition for hard paywall apps revolves around finding highly engaged users for premium content. This is achieved through App Store Optimization (ASO) and paid marketing. Strategic ASO improves organic reach with visual teasers and showcasing the app’s benefits. Paid marketing, targeted partnerships, and sponsored content boosts the acquisition of paying users.
The need for customer engagement: relatively low
Apps with hard paywalls experience a relatively low need for customer engagement since users must pay to access the service. The customer journey from install to paid subscription is short - so customer engagement isn’t usually needed. However, customer engagement is still crucial for renewals and upsells as it influences the retention rate.
A soft paywall offers free access to some content while reserving premium features for paying subscribers. It balances revenue and user satisfaction through subscription, ad revenue, user engagement, and community building. However, it demands more development and maintenance resources due to separate feature design and development and a complex user flow.
Monetization strategy: hybrid of subscription and ad revenue
Subscription apps with soft paywalls balance revenue with both subscriptions and ad revenue. They first emphasize the app's value to installers by offering free features, aiming to convert them to paid subscribers. Additionally, they generate additional ad revenue by strategically placing ads in the free version.
The need for user engagement: relatively high
User engagement is crucial for soft paywall apps, as converting free users into paying subscribers significantly impacts revenue. The emphasis lies in nurturing a positive user experience and building an engaged community to cultivate loyalty and drive subscription conversions.
User acquisition strategies: many times referral and community-based
Soft paywall apps leverage referrals and community-based strategies for user acquisition as well as ASO and paid marketing since the power of community plays a crucial role for them. They harness the power of their user community such as social media to drive viral growth. By actively promoting free content on various platforms, they increase content discoverability, foster word-of-mouth marketing, and strengthen their user community.
Constant experiment and optimization are key to maximizing revenue potential in paywall strategies. Embrace A/B testing to analyze user behavior, identify pain points, and refine your approach. By staying attuned to your audience's preferences, you can create a seamless user experience that drives subscriptions and fosters long-term loyalty.
For further insights, explore previous articles on paywall optimization and SaaS solutions for A/B testing your paywall. Leveraging these resources will accelerate the success of your subscription app and set you on the path to sustainable growth.