4 Expert Insights on Monetization Models, Paywall, Pricing and Trial Periods
Looking at the sheer number of Health & Fitness apps in the German app stores, one might come to the conclusion: Market saturated, revenues shared between the big players, no business case for another “Me-too” app. Well, we recently analysed the Top 50 Health & Fitness apps by revenue in the German market and we’d like to prove you wrong.
We analysed the Top 50 Health & Fitness Apps by Revenue in the German App Market
stanwood is a Berlin-based international app development agency with 10 years experience in the Health & Fitness market. Stanwood built successful fitness apps like Sophia Thiel, Mach dich krass by Daniel Aminati, XTREME KRASS and Shape Republic for ProSiebenSat.1 subsidiary 7NXT Health, and is currently working on two new Health & Fitness apps for a German publishing house and a well-known German athlete. Today, I’m going to share our key findings on what makes Health & Fitness apps successful.
We identified four main levers to increase app revenues
- Monetization: Which monetization model performs best?
- Paywall: How does the right paywall position increase your conversion rate!
- Pricing: Where is the sweet spot between subscription price and number of subscribers that maximizes your revenues?
- Trial periods: Do free trial periods have any proven effect on your conversion rate?
But first, let’s have a quick market overview to understand the full potential of the German Health & Fitness app market.
3 Reasons To Build Yet Another Health & Fitness App
1. Continuing High Market Growth Expected
The volume of the global Health & Fitness app market was $1.778bn in 2016, and is expected to grow to $4.1bn in 2021. Although the market for wearables like bracelets and watches, trackers and smart clothes is larger in volume than the fitness app market, the latter is growing faster and is projected to catch up with the physical devices market in 2021. (allcorrect group: THE TOP TEN MOST PROFITABLE FITNESS APPS MARKETS) In the last three years alone, the usage of health & fitness apps grew by over 330 percent. (Flurry Analytics: Health & Fitness App Users Are Going the Distance with Record-High Engagement)
2. High User Engagement and Willingness To Pay
Users are highly committed to their Health & Fitness app once they chose one. 96 percent of all active users are using only one app for their fitness routines. Over 75% of active users open their app at least two times a week, more than 25% are using their app more than 10 times a week. That high frequency drives up overall engagement and increases users’ willingness to pay for their benefits. (Flurry Analytics: Health & Fitness App Users Are Going the Distance with Record-High Engagement)
3. Attractive Market Potential for New Health & Fitness Apps
To quote ABBA: “The winner DOES NOT take it all!” Unlike the Social Networks market, where a few key players dominate the field and generate most of the revenue, revenues of the German Health & Fitness app market are more equally shared. We analysed the German market and found the following: Although the #1 fitness app by revenue creates around 500,000 EUR in revenues per year, other average performing apps in the same categories still make 120,000 EUR in the same period. That’s not too bad. (Revenues reverse engineered by 2017 app ratings by revenue)
So our conclusion is
Yes, there are already a number of successful players in the German Health & Fitness app market.
BUT: The market is big enough and still growing, so there is enough room for new players to secure a piece of the revenue cake.
1 Original, many Me-toos
Let’s have a closer look at the Top 50 Health & Fitness Apps by revenue in Germany. We identified four main subcategories that make for 95% of its total revenue and cater to slightly different user needs.
Mobile Fitness Coaches & Videos
The #1 app by revenue in this category is Sweat: Kayla Itsines Fitness. It offers short video workouts, customisable meal plans, global fitness challenges and special programs designed for weights, yoga and post-pregnancy. The app is free with In-App subscriptions of 1 month, 3 months or 12 months.
The #1 app by revenue among calorie trackers is YAZIO. Users can manage their daily food diary, track their activities and create a personal plan to lose weight or build muscles. YAZIO is free with subscription options of 3 and 12 months.
Meditation Coach & Audio Clips
Headspace: Meditation is the #1 meditation coach app by revenue. It offers audio-guided meditations and mindfulness techniques, animations with tips and other wisdom to keep users on track. The basic version is free with auto-renewing subscription options for 1 or 12 months.
Running Buddy Maps & Tracking
STRAVA: Run, Ride or Swim is the #1 app for tracking sports activities and sharing them with the community. Users can record and analyse their training, create maps with their personal routes, compete with other users and share their achievements in their social networks. STRAVA is free with subscription options of 1 or 12 months.
4 Key Findings To Increase Revenues
1. Which monetization model performs best?
There are various ways for Health & Fitness apps to generate revenue, among them single payment options, subscription models and advertising. We found that 90% of all German Top 50 Health & Fitness app revenues come from subscriptions. Looking at the preferred subscription period, 74% of all users choose a 12-month subscription.
2. Where Do You Put Your Paywall To Increase Your Conversion Rate?
We analysed the onboarding process of all Top 50 German Health & Fitness apps and found a correlation between the position of the paywall and the app’s rank in the app store. Most Top 50 apps show a hard paywall right with the app start. Our conclusion: The earlier users are confronted with the paywall, the higher your conversion rate will be.
3. Where is the Sweet Spot Between Subscription Price and Number of Subscribers?
The math is simple: The higher your subscription price, the fewer subscriptions you’ll get. In our own apps — and we developed 60 iOS and Android apps in the last three years alone — we experimented a lot with pricing models. We found that the sweet spot between price and number of subscribers in Health & Fitness apps lies somewhere between 20 and 70 EUR per year.
4. Trial Periods Do Not Increase Conversion Rates!
Some of you might feel that you need to give your users a free trial period to get them hooked, before they convert into paying subscribers. Looking at the Top 50 German Health & Fitness apps, we found that 80% of these apps do not offer free trial periods. The simple truth is: Most of those apps offer a free basic version anyway, so users can experience the main benefits before they subscribe. So, it seems that free trials do not have any impact on your conversion rate.
If you want to build commercially successful Health & Fitness apps, just stick to those four rules:
- Offer a 12-month subscription for your app, as 73% of all converting users choose that timespan for their subscription period.
- Build your onboarding process as lean as possible: The less screens between app start and paywall, the higher your conversion rate, the higher your revenues, the higher your app store rank.
- Set the right price! The sweet spot to maximise your revenues on a long-term basis lies somewhere between 20 and 70 EUR. So choose your 12-month subscription price somewhere in that range .
- Trial periods have no proven impact to increase conversion rates.