Life is a subscription. We subscribe to services that cover our housing (mortgage, rent), health (gym, insurance), transportation, education, entertainment and more. These subscriptions have seamlessly blended into everyday life. This year, we’re expecting consumer app businesses to take another step in the same direction. The key app growth trends we’ve identified share a core value: the customer is at the center of it all.

The Netflix way

App-based subscriptions have some work to do when it comes to learning from non-app-based businesses — and how they’ve become a ubiquitous part of life. This year, we’ll see top apps make advancements toward providing seamless subscriptions by taking a page from Netflix. With cross-platform and family subscriptions built into pricing and packaging, consumer apps can better integrate into users’ busy lives and cater to the flexibility they need.

Reports show that nearly 70% of the US population is comprised of households containing two or more and the average US household has 10 connected devices. It doesn’t make sense to limit access to a single platform or user when consumer lifestyle and behavior reflects one of community and multiple devices.

Also important to note: don’t underestimate the long-term value that greater access provides. Users who engage with your app across platforms and share access with family members are high-value users (and so are members of a shared subscription). More users bring more data points that can better inform your product roadmap and content creation.

Hybrid monetization model

There will be more apps leveraging a hybrid monetization model. Similar to the blended subscription and in-app monetization strategy that we saw early on from dating apps, more consumer apps will implement a hybrid monetization model — where there’s a recurring fee for baseline access (subscription) with additional value-added services available for purchase in-app.

We saw a great example of this recently. Lensa saw a 631% spike in monthly downloads of its new “Magic Avatars” tool, an in-app purchase. The company also offers paid monthly memberships.

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Off-app payments

App stores have created an uphill battle for developers when it comes to payments and privacy. Standard Apple and Google commissions start at 30% with subscription commissions falling to 15% after one year. Forced to forge new paths, developers are starting to experiment with off-app payments; by pointing users to their website and using payment portals like Stripe, Paypal and Braintree, they can keep more of their recurring revenues.

More money in the bank means more to reinvest back into the business. As businesses focus on building sustainable practices that keep users engaged long-term, this added cash flow provides the flexibility to test and optimize new experiences and value-added services.

”There’s an app for that”…no really!

If you remember the 2009 Apple iPhone commercial, it was touted that there was an app for essentially everything we could imagine. Fast forward a decade and some change, even more niche apps and sub-niche apps have hit the market. With big category saturation, there is an opportunity for sub-niche apps to carve out their slice of market domination.

You may not have imagined, but there really is an app for hyper-personalized segments like:

• For the best catch of their life fishers now have apps like BassForecast and TroutRoutes that help forecast the best fishing routes for specific fish species.
• Geocaching has been around since 2000, but with the official Geocaching app treasure hunters can now break out their maps on the go.
• For the musically curious, apps like Skoove provide interactive lessons that allow you to follow along in the app while playing on your own keyboard or piano. The app recognizes notes played and tells you what’s right and where to improve.

New frontiers in tech

Looking again to the Lensa example, we couldn’t imagine the extent of the AI functionality that we saw with “Magic Avatars” just a decade ago. New frontiers in technology are exciting and timely opportunities for businesses of all shapes and sizes — but they deserve immediate attention.

When Lensa had its 631% bump, they weren’t the only app showcasing the cool new AI tech. Mass adoption is actually an optimal outcome and the key for businesses comes down to timing — it’s everything. Jump on new technology opportunities early. Being on the earlier side of the adoption curve means a greater opportunity to position yourself as a leader and capture more market share.

A focus on brand building

Brand marketing will take center stage, while performance marketing takes a backseat. Consumer apps are prioritizing lifetime value (LTV) over customer acquisition cost (CAC) performance — and for good reason. LTV paints a bigger picture. It tells you how much each user adds to your overall revenue, which you can then use to justify your CAC.

With a focus on LTV, the priority is to create a complete lifecycle (multi-touch) experience. The relationship between app and user becomes less transactional and more so focused on the long game. This is where brand building comes into play. From the education provided before download to the ongoing value provided month-over-month, app businesses will need to ensure their brand is strong enough to attract and retain users.

Connecting it all to funding: a bet on retention and real value

Whether raising equity or debt funding, investments and valuations have grown increasingly conservative. The key takeaway here is that despite economic shifts, it’s always wise for businesses to focus on building sustainable business models. This can be tough in a down market when it’s harder to put money to work on riskier investments. The good news is that there are still things you can do to protect your business:

• Make improvements in operating efficiencies.
• Focus on value indicators like product-based KPIs and user virality.
• Consider revenue-based funding options like Braavo to help reach short-term goals.

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