Subscription App Dictionary

A method of product experimentation in which users are randomly split into two or more cohorts (e.g., Group A and Group B), with each group exposed to a different variation of a feature such as copy, design, or pricing. A primary success metric is established before the test begins, and the outcome is typically measured using frequentist statistics and confidence intervals to determine if one version outperforms the other — or if results are inconclusive.

A performance metric that represents the average revenue generated per user over a defined period. ARPU is calculated by dividing total revenue by the number of active users during that time frame (e.g., monthly). It can be segmented by platform, geography, or acquisition source to assess the value of different user cohorts. While related to LTV, ARPU is time-bound, whereas LTV spans the full customer lifecycle.

Annual Recurring Revenue (ARR) is a financial metric used by subscription-based businesses to measure and forecast the total revenue expected from their subscriptions over a year. It's essentially the predictable income a company anticipates receiving from existing customers, renewing their subscriptions at the same rate, and any new subscriptions obtained throughout the year.

A key stage in the customer lifecycle that occurs after acquisition. Activation is defined by a user completing a high-value action for the first time — such as starting a trial, making a purchase, or engaging with a core feature. The exact definition depends on the app’s monetization model and business goals.

A user who currently has an active, paid subscription. This excludes users in a grace period, trial, or lapsed state, and is typically the core population used when calculating MRR or churn rate.

The process of improving an app’s visibility in app store search results and browse sections (e.g., on Apple’s App Store or Google Play). ASO involves optimizing elements like the app name, description, keywords, icon, screenshots, and video preview to drive organic installs and improve conversion rates from page views to downloads.

Apple’s paid user acquisition channel that displays targeted ads at the top of App Store search results. ASA allows marketers to bid on keywords, define demographic and behavioral targeting, and optimize campaigns based on user value post-install, such as subscription conversion or trial start.

The process of identifying which marketing source (e.g., paid ad, referral, email) led a user to install the app or subscribe. Accurate attribution is essential for measuring ROI, optimizing campaign performance, and understanding how different channels contribute to growth.

A subscription setting that automatically charges users at the end of each billing cycle unless manually canceled. Auto-renewal is the default for most in-app subscriptions and contributes to predictable recurring revenue. It’s important to actively engage and retain these users, as churn typically occurs when auto-renew is disabled.

The server-side system that determines which features or content a user can access based on their subscription status. Typically integrated with app store receipt and tools like like Botsi, it ensures consistent access across devices and platforms.

User engagement that occurs without directly launching the app, such as interacting with push notifications, widgets, or voice assistants. While less visible, this activity can influence retention and should be factored into engagement metrics.

A statistical approach that updates probabilities based on new evidence, often used in A/B testing and predictive modeling. Unlike frequentist methods, Bayesian models provide a more flexible framework for interpreting test results and making probabilistic decisions — useful in pricing tests, LTV projections, and paywall optimization.

The practice of grouping users based on in-app behavior — such as content viewed, session frequency, or purchase history — to tailor messaging, paywalls, and retention strategies. Behavioral segmentation enables personalized user experiences and drives more efficient monetization.

The interval at which a subscription renews and the user is charged — typically monthly, quarterly, or annually. Understanding billing cycles is important for tracking revenue recognition, renewal trends, and user lifetime value.

The automated process by which subscription platforms (e.g., Apple, Google, or a backend service) attempt to recover failed payments due to issues like expired cards or insufficient funds. Effective retry logic is essential for reducing involuntary churn and maintaining revenue continuity.

The moment when a user’s revenue (LTV) surpasses the cost to acquire them (CAC). Hitting break-even is an inflection point in a subscription app’s growth journey, marking the shift from investment to profit on a per-user basis.

A unique identifier assigned to an app by its developer, used primarily in iOS/macOS ecosystems. The bundle ID ensures proper linking between app store listings, analytics platforms, and third-party services like push notifications, attribution, and entitlement management.

The act of ending a subscription, either by the user or automatically due to billing failure. Understanding cancellation timing and reasons is key for designing retention strategies, deflection flows, and win-back campaigns.

A short feedback form presented during the cancellation process to understand why a user is choosing to leave. These insights inform product improvements, pricing strategy, and targeted win-back efforts.

The percentage of subscribers who cancel or do not renew their subscription over a given time period. Churn can be voluntary or involuntary and is a core metric for measuring retention health and forecasting revenue growth.

The ratio of users who click on a specific call-to-action (e.g., email link, push notification, paywall button) versus those who viewed it. CTR is a key engagement metric for evaluating creative performance and funnel effectiveness. Click-through-rate originated in the email and banner ad world, where everything was on a desktop. With mobile, some companies now call this same metric tap-through-rate since people are tapping on their phone vs clicking on desktop, but at the end of the day it's really the same type of measurement.

A method of analyzing user behavior by grouping users based on shared characteristics — most often the date they first installed or subscribed. This allows teams to compare retention, LTV, and monetization trends across cohorts over time.

The practice of limiting access to premium content — such as videos, lessons, or tools — behind a subscription paywall. Content can be fully locked (hard paywall) or partially accessible (soft paywall) depending on the monetization strategy.

Real-time user data (e.g., device type, behavior, location, time of day) used to personalize messaging, pricing, or feature access. Contextual targeting helps improve conversion and engagement by tailoring the experience to the moment.

The percentage of users who complete a desired action, such as starting a trial, subscribing, or upgrading. Common funnel examples include install → trial, trial → paid, or view paywall → subscribe. Conversion rate is a critical KPI for acquisition and monetization performance.

The average cost to acquire a new customer or subscriber, typically calculated by dividing total acquisition spend by the number of new users acquired. Keeping CAC lower than LTV is essential for profitable growth.

The total time a user remains subscribed before churning. Often used in combination with revenue data to calculate lifetime value (LTV), and forecast future earnings per subscriber.

The systems and strategies used to manage interactions with users across their lifecycle — including onboarding, engagement, upsell, and retention. Tools like Braze, Customer.io, and Iterable are commonly used to deliver personalized, event-driven messaging.

The set of policies and regulations that govern how user data is collected, stored, and used. For subscription apps, compliance with standards like GDPR, CCPA, and Apple’s App Tracking Transparency (ATT) is essential, particularly when dealing with personal, behavioral, or payment data.

Links that direct users to specific in-app locations rather than simply opening the app. When combined with attribution and deferred deep linking, they enable seamless experiences across channels and platforms — valuable for re-engagement, referrals, and onboarding.

A technique that routes users to a specific screen or piece of content in the app after installation — often used for campaigns, referrals, or personalized onboarding. It enables seamless user flows from ad click to in-app action, even when the app isn't already installed.

A promotional code that offers users a reduced subscription price, often used during onboarding, seasonal campaigns, or win-back efforts. Codes can drive urgency, personalize offers, or reward referrals.

Offering a lower-priced plan or reduced feature set to users who show signs of canceling or resisting a premium offer. Downselling helps preserve revenue and reduce full churn by keeping users subscribed at a lower commitment level.

The percentage of users who abandon a process before completing it — such as leaving onboarding, exiting at the paywall, or quitting checkout. Drop-off analysis helps identify friction points and optimize the user journey for higher conversion.

A lifecycle system for managing failed payments. Dunning flows often include retries, reminders, grace periods, and in-app nudges — all aimed at recovering revenue and minimizing involuntary churn from billing issues.

A paywall that adapts based on user behavior, engagement level, or user segment. Dynamic paywalls are used to tailor messaging, pricing, or feature framing — typically to improve conversion rates and reduce friction at the moment of intent.

A pricing model where subscription prices are adjusted in real time based on variables like user location, engagement behavior, platform, or purchase intent. It’s often used to align perceived value with user segments and improve global conversion rates.

The rules — often enforced by Apple or Google — that determine whether a user qualifies for specific offers such as introductory pricing or free trials. These are typically based on the user’s subscription history within a subscription group or platform account.

The process of collecting a user’s email address during or before account creation. Email capture enables lifecycle communication across channels like onboarding emails, upgrade prompts, and win-back campaigns — and is particularly important when a user does not convert immediately.

A metric that measures how frequently and deeply users interact with your app over time — including actions like sessions, feature use, and content consumption. Higher engagement is typically correlated with improved retention, trial conversion, and LTV.

The specific features, content, or access levels a user is granted based on their subscription status. Entitlements are typically managed through server-side systems like StoreKit, or Botsi, and are essential for maintaining access across platforms and devices.

Trackable in-app user actions such as app open, paywall view, subscription start, cancellation, or feature use. Events are the building blocks of behavioral analytics and are helpful for measuring funnel performance, targeting lifecycle messaging, and powering experimentation.

The systems and methodologies used to run A/B or multivariate tests on key subscription elements — such as pricing, onboarding, messaging, and paywalls. A strong experimentation framework supports continuous optimization of conversion and retention through rigorous data collection and analysis.

An Apple feature that allows a single subscription to be shared with up to five additional family members, reducing acquisition friction and increasing perceived value. Apps must opt in to support this and often adapt entitlement logic accordingly.

Restricting certain features behind a paywall or subscription tier. Gated features serve as upgrade drivers and help communicate the value of paid access. This is a common tactic in both freemium and trial-based models.

Data collected directly from users by your app — such as behavior, preferences, and purchase history — rather than through third-party platforms. First-party data is more accurate, privacy-compliant, and essential for personalized messaging and retention strategies.

A time-limited offer (e.g., 7 or 14 days) that grants users access to premium features at no cost. Trials are used to build trust, increase perceived value, and reduce barriers to subscription. Managing trial-to-paid conversion is a key monetization lever.

A monetization model where the core app experience is free, but advanced features, content, or tools require a paid subscription. Freemium strategies allow broad top-of-funnel reach while monetizing the most engaged and high-intent users.

The process of tracking user behavior through defined conversion stages — such as install → trial → paid → renewal. Funnel analysis helps identify where users drop off and where to optimize onboarding, pricing, or messaging to improve performance.

Incorporating game-like elements—such as points, streaks, badges, or level progress—into the app experience to increase user motivation, engagement, and long-term retention. Gamification is often used to reinforce daily habits or reward subscription milestones.

A Google Ads campaign type that automatically promotes your app across Google Search, Play Store, YouTube, and the Display Network. GAC uses machine learning to optimize ad placements and creative variations for installs, in-app actions, or subscription conversions.

Google's official framework for handling in-app purchases and subscriptions on Android devices. It provides APIs for managing trials, renewals, grace periods, and refunds, and is required for processing payments through Google Play.

A limited time window following a failed renewal attempt during which a subscriber retains premium access while payment retries occur. Grace periods help reduce involuntary churn and provide a softer billing experience for users with temporary payment issues.

The total subscription income earned before deducting app store platform fees, refunds, or taxes. Gross revenue provides a top-line view of monetization performance and is often contrasted with net revenue for financial analysis.

A compounding system where actions from existing users (like referrals, content sharing, or community engagement) lead to new user acquisition, which in turn fuels more engagement and further growth. Growth loops are more sustainable than linear acquisition models and often enhance LTV over time.

A metric that tracks users who complete a specific high-value action that strongly correlates with long-term retention or monetization such as starting a trial, subscribing, or completing onboarding. Unlike soft engagement signals, hard activations typically reflect clear product-market fit at the user level.

A monetization model where core app features or content are fully locked behind a subscription and users must pay to proceed. Hard paywalls are effective for apps with clear, high-value offerings and are often paired with a free trial to mitigate upfront friction.

Users who demonstrate strong signals of purchase readiness, such as frequent sessions, return visits, or multiple paywall views. These users are prime targets for personalized offers, upsells, and onboarding nudges to drive subscription conversion.

A behavioral design framework that explains how products create habits by cycling users through four stages: Trigger, Action, Reward, Investment. In subscription apps, the hook model is often used to design daily engagement loops that drive retention and deepen value perception. This was popularized by Nir Eyal.

A strategy that combines multiple revenue streams such as subscriptions, in-app purchases (IAPs), and advertising. Hybrid monetization allows apps to capture value from both paying and non-paying users, optimizing ARPU across segments.

A native message displayed within the app interface (e.g., banners, modals, full screens) used to guide user actions - such as starting a trial, updating payment info, or exploring premium content. IAMs complement push notifications for mid-session engagement.

A transaction made within the app to unlock content, features, or virtual goods. For subscription apps, IAPs can be used for one-time purchases alongside recurring plans, and must comply with Apple and Google's platform rules for digital goods.

The process of determining which marketing source or campaign drove an app install. Accurate attribution is needed for measuring CAC, optimizing performance marketing, and analyzing subscriber LTV by channel.

The percentage of users who install the app and ultimately start a paid subscription. This is a key funnel metric for evaluating onboarding effectiveness, paywall performance, and the overall value proposition.

A user's status, tracked by the app store, that determines whether they qualify for introductory pricing. On iOS, eligibility is typically limited to one offer per subscription group per Apple ID, meaning churned users may not qualify again.

A discounted subscription offer available only to first-time subscribers for a limited time (e.g., $0.99 for the first month). It's used to lower entry barriers and increase trial-to-paid conversions, and is governed by platform-specific rules on eligibility.

When a subscription is canceled due to failed billing - often caused by expired credit cards, insufficient funds, or store payment issues - rather than a user's conscious choice. Involuntary churn is a silent but significant drag on MRR, making billing recovery tactics very valuable.

A lightweight, secure data format used to transmit verified information between systems - often employed to authenticate subscription status between a user's device, your backend, and third-party tools.

A product development and positioning framework that focuses on the core "job" a user hires your app to accomplish - such as helping them sleep better, get fit, or manage tasks. JTBD is especially useful for defining value propositions, onboarding flows, and pricing models that resonate with target users.

A dynamic paywall strategy that displays the subscription prompt exactly when a user attempts to access premium content or features. This approach increases conversion by showing the paywall at a moment of high intent, when the value of the subscription is most clearly felt.

A measure of virality that indicates how many additional users each existing user brings in — often through referral programs, content sharing, or word of mouth. A K-factor above 1.0 indicates exponential user growth without relying entirely on paid acquisition.

Core metrics used to evaluate app performance, especially across acquisition, conversion, and retention. For subscription apps, common KPIs include Monthly Recurring Revenue (MRR), churn rate, Lifetime Value (LTV), trial-to-paid conversion, and activation rate.

A legal and compliance process used to verify the identity of users, often required in finance, healthcare, or education apps. For subscription businesses in regulated spaces, KYC ensures compliance while maintaining trust and access to premium services.

A metric that shows where your app appears in App Store or Google Play search results for specific keywords. Optimizing keyword rankings is a key part of App Store Optimization (ASO) and can drive organic installs with strong conversion potential.

A key profitability metric that compares the average Lifetime Value of a user to the average Customer Acquisition Cost. A ratio of 3:1 is often cited as a healthy benchmark for sustainable growth and efficient marketing spend. But lifetime value is measured differs across apps and industries, so don't use this as a hard and fast rule

A messaging strategy that targets users at key moments in their journey - from onboarding and trial to renewal and reactivation. Channels like email, push notifications, and in-app messages are orchestrated around behavioral triggers to drive higher conversion and retention.

The total revenue a user is expected to generate over the entire duration of their relationship with your app. LTV is a foundational metric for forecasting revenue, setting CAC targets, and evaluating the long-term impact of product or pricing decisions.

The process of adapting your app's content, pricing, messaging, and visuals for different languages, regions, or cultural norms. Effective localization improves global conversion rates, user trust, and long-term retention in international markets.

User interactions that originate from lock screen surfaces - such as notifications, widgets, or Live Activities - without launching the full app. These lightweight touchpoints help boost engagement, reinforce habits, and improve retention with minimal friction.

The percentage of users who remain active and/or subscribed after extended periods (e.g., day 30, day 90, or day 180). Particularly important for subscription apps with annual plans or freemium models where monetization happens later in the user lifecycle.

The number of unique users who engage with the app at least once in a 30-day period. MAU is a top-level engagement metric and often serves as the denominator in conversion rate or retention analysis.

A metric that measures how often users return to the app by comparing Daily Active Users (DAU) to Monthly Active Users (MAU). A higher ratio (closer to 1.0) indicates stronger user stickiness and habitual usage. The usage patterns of your users will change based on the category and type of app. For example, social media and gaming apps expect a much higher MAU/DAU ratio. Apps that only make sense to use once a week or a few times a month shouldn't measure themselves the same as a game.

The party legally responsible for processing payments, managing refunds, and handling tax compliance on behalf of the app. In most mobile apps, Apple or Google act as the merchant of record, while web-based apps often use Paddle, or similar providers.

A third-party tool - like Appsflyer, Branch, or Adjust - that attributes installs, measures campaign performance, and tracks in-app behavior across paid and organic channels. MMPs can be helpful for understanding CAC, LTV, and ROI in a privacy-compliant manner.

The predictable revenue generated from active subscribers on a monthly basis. MRR is a key metric for assessing growth, financial health, and the impact of marketing or retention initiatives in subscription-based apps.

Describes apps or services that support user access and subscription syncing across multiple operating systems (e.g., iOS, Android, web). Multi-platform support improves user flexibility, increases perceived value, and helps reduce churn.

An advanced testing method where multiple variants (such as pricing, layout, and messaging) are tested simultaneously to identify the most effective combination. Multivariate testing is useful when optimizing complex paywalls, onboarding flows, or value propositions. Multi-variate testing usually makes more sense for larger apps since they have more data and can run these tests over a reasonable time frame. If you are smaller, typically starting with A/B testing with only two variants, or a control, and a new variant will lead to more reliable results.

A pricing strategy where users choose what they're willing to pay for a subscription. Less common, but it can be useful for donation-based products, early-access launches, or communities where trust and transparency are core values.

Net Promoter Score (NPS) is a measure used to understand customer satisfaction and loyalty for an app. It’s based on one simple question: “How likely are you to recommend our app to a friend or colleague?” Users rate this on a scale from 0 to 10. Scores of 9-10 are ‘Promoters’ who love your app, 7-8 are ‘Passives’ who are satisfied but not enthusiastic, and 0-6 are ‘Detractors’ who are unhappy. A high NPS indicates strong customer satisfaction and is often linked to growth and positive word-of-mouth, while a low NPS can signal potential issues and customer churn.

The number of subscribers lost over a given period, adjusted for reactivations. Net churn provides a more complete view of subscription momentum than gross churn and is especially useful for understanding long-term revenue health.

Total income from subscriptions after subtracting platform fees, refunds, taxes, and other deductions. Net revenue offers a more accurate picture of actual profit compared to gross revenue and is needed for forecasting and LTV modeling.

A subscription that ends after a set period without auto-renew.

When users become overwhelmed or desensitized by excessive push or in-app messages, leading to disengagement, opt-outs, or churn. Managing frequency, personalization, and value of notifications is important to maintain user trust.

Messages delivered to users either outside the app (push) or during app sessions (in-app). These are key channels for driving re-engagement, promoting renewals, upselling, and nudging users toward key lifecycle milestones like trial start or upgrade.

Subtle, behaviorally timed messages that encourage users to take action like, "Your trial ends tomorrow" or, "Unlock more with Premium." Nudges are effective at reducing drop-off and increasing conversion when placed at friction points or high-intent moments.

A promotional code that unlocks a discounted price or special access to a subscription. Offer codes are often used in partner campaigns, user gifting, influencer marketing, or churn recovery workflows.

A monetization and engagement tool that presents users with offers (e.g., free trial extensions, discounts) in exchange for actions like watching an ad, completing a survey, or sharing the app. Common in freemium or hybrid monetization models.

A premium feature that allows users to use the app or consume content without an internet connection. Often used in fitness, language learning, or media apps to justify subscription value and reduce churn during travel or commuting.

The structured experience that guides new users through their first interactions with the app - often including feature highlights, value reinforcement, and paywall exposure. A well-optimized onboarding flow will improve activation, trial starts, and long-term retention.

A monetization model where users pay once for permanent access to a specific feature, product, or piece of content. OTPs can complement subscriptions for users who prefer à la carte value over recurring payments.