Apple is taking proactive steps to make the App Store more attractive to developers in anticipation of the upcoming deadline to comply with the EU’s Digital Markets Act (DMA). The DMA will allow developers to distribute apps through their own channels for the first time. In a bid to retain developers, Apple has initiated pilot tests of “contingent pricing,” a new marketing strategy for App Store subscriptions.
Key Takeaway
Apple has launched pilot tests of “contingent pricing” to retain developers on the App Store ahead of the EU’s Digital Markets Act (DMA). This new feature offers discounted subscriptions to customers who are actively subscribed to another subscription from the same or different developers, providing opportunities for upselling and cross-promotion.
What is Contingent Pricing?
The recently announced feature offers customers a discounted subscription as long as they’re actively subscribed to another subscription from either the same developers or two different developers. This presents an opportunity for individual developers to upsell to their existing loyal customers by offering them a deal on another app in their portfolio. Additionally, two developers can utilize this option to attract customers to their respective subscriptions, especially if the two apps offer integrations or complement each other in some way.
The Debut Pilot Test
The debut pilot test of contingent pricing involves two apps: Structured and one sec. Structured is a daily planner offering a visual calendar and to-do list, while one sec is a productivity app designed to help users break their social media habits. Interestingly, this pairing comes amidst the ongoing dispute between Apple and Meta over App Tracking Transparency, which Meta claims has impacted its business.
How the Pilot Test Works
During the pilot, customers who subscribe to one of the apps can receive a discount if they subscribe to the other. This offer is prominently featured in the App Store’s “Events & Offers” section, showcasing the new, lower price alongside the original subscription price, which is crossed out. The savings are also highlighted to entice potential subscribers. The deal is advertised on the product pages of both apps and will also be promoted through separate placements in the App Store. Additionally, developers have the option to advertise the offer on their own social media or websites.
Implications and Future Outlook
While it is too early to gauge the impact of these offers on conversions, a well-matched pairing of integrated apps could potentially perform well. Apple has assured developers that the implementation of contingent pricing will be seamless for customers purchasing through the App Store. This move comes on the heels of Apple’s announcement of new rules for app developers in the EU, including reduced commissions, the ability to sideload apps, new security checks, and updated fees. With increased competition in the EU, Apple is seeking ways to retain developers on the App Store. By offering a program that enables co-marketing of apps to boost subscription conversions, Apple aims to entice developers to continue using the App Store instead of exploring other options.
