Mobile App Terminology

Subscription revenue model

What is a subscription revenue model?

A subscription revenue model is a type of business model in which customers pay for a product or service on a recurring basis, which is typically monthly or annual. Subscription revenue models have long been a popular business model for software as a service (SaaS) businesses, and more recently have become popular in other online businesses such as eCommerce and digital media.

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How do marketers increase the ROI of subscription-based businesses?

Given that subscription revenue models aren’t one-off payments, one of the most important factors when it comes to ROI and the customer lifetime value is churn

Churn rate is an essential metric to track for mobile apps as it plays a key role in other key metrics such as lifetime value (LTV), retention rate, profitability, and so on. For a mobile app to grow, the number of users staying on the app must be higher than the number of users that uninstall it. And for an app to be profitable, its churn rate must stay low.

This means that marketers need to not only optimize for customer acquisition costs (CAC) but also acquire the right customers that are likely to have a higher LTV, largely by not churning. To do so, marketers should consider the following factors:

  • Targeting & segmentation: As mentioned, a higher LTV and lower churn can make all the difference between a profitable and unprofitable subscription business, which means that targeting and audience segmentation are essential to acquiring the right customers. 
  • Customer retention: Marketers can also use subscription data to improve retention by identifying and reaching out to at-risk customers and offering them incentives to stay.  

As you can see, tracking and analyzing customer data is essential to improving the ROI of subscription-based businesses.

How does Singular support subscription revenue models?

As a leader in marketing analytics and mobile attribution, Singular provides subscription-revenue businesses the tools they need to to expose new optimization opportunities that maximize ROI with granular performance insights. 

Specifically, a few insights for subscription-based businesses include:

  • Attribution & reporting: Singular provides accurate attribution and reporting for subscription-focused campaigns to optimize CAC and increase retention.
  • Cost aggregation: Singular also provides a suite of cost aggregation tools to help businesses understand how every marketing dollar impacts their growth.
  • Customer lifetime value (LTV): Singular also aggregates data across channels and calculates LTV in order to identify more profitable target audiences.

In summary, the recurring nature of subscription revenue models makes them very attractive, although without the right customer and acquisition data in place, they can be notoriously challenging. With Singular’s suite of analytics tools, marketers can make the most of their customer data and optimize their subscription marketing campaigns and improve their ROI.

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