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What is Introductory pricing?

Definition, examples, and more

Definition

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.

How to Calculate

Intro Offer Revenue Impact = (Intro Conversion Rate x Intro Price x Users) + (Intro Users x Renewal Rate x Full Price x Remaining Months). For example: (2,400 x $0.99) + (2,400 x 62% x $12.99 x 11) = $2,376 + $212,773 = $215,149 first-year revenue from the intro cohort.

Example

A news app offers introductory pricing: $0.99 for the first month (normally $12.99/month). This intro offer achieves a 24% conversion rate vs 8% at full price. After the intro month, 62% of users continue at $12.99 — meaning each intro subscriber generates $96.72 in first-year revenue vs $0 if they had bounced at the full price paywall.

Why Introductory pricing Matters

Introductory pricing lowers the psychological barrier to a first purchase, and the data shows it works dramatically well. A meditation app tested $0.99/first month vs no intro offer. The intro price generated 3x more subscribers, and 58% renewed at full price. The short-term discount paid for itself within 45 days and delivered 2.2x more lifetime revenue per install than the full-price-only approach.

Frequently Asked Questions

What types of introductory pricing does Apple support?

Apple supports three types: Free Trial (full access for X days, then auto-renews at full price), Pay As You Go (reduced price for X billing periods, then full price), and Pay Up Front (one-time reduced payment for an extended period). You can only use one type per subscription group, and each Apple ID gets one intro offer per group.

What is the best introductory price for a subscription app?

The most common intro offers are: free 7-day trial (best for user acquisition), $0.99 for the first month (good for revenue + conversion balance), and 50% off the first period (good for higher-priced subscriptions). Test different approaches — the winner depends on your price point, audience, and how much value you can demonstrate during the intro period.

Do introductory pricing users churn more than full-price users?

Yes, typically 15-25% higher churn at first renewal. Users attracted by low prices are more price-sensitive. However, the higher volume of subscribers usually more than compensates. To improve retention after the intro period, focus on driving engagement during the discounted phase so users perceive full-price value before the first renewal at standard pricing.

Category
Subscription App Terminology
Related Area
Mobile App Growth & Monetization

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