Use Apple iOS Offer Codes to Acquire, Retain & Winback

Apple’s subscription Offer Codes announced at WWDC 20 are now available. In this article, we discuss what exactly Offer Codes are and how you should think about using them.

What are Offer Codes?

‍Offer Codes are one of the simplest ways to provide promotional pricing to your customers. They are a great tool to add to your ongoing acquisition, retention and win-back programs. While Offer Codes have some limitations, they are quick and easy to use so they offer your marketing team

They are unique one-time codes you generate in App Store Connect and provide to your customers. In fact, Offer Codes are incredibly easy for the user to redeem in the App Store like a gift card or also in-app via a redemption sheet.

Who is Eligible to Redeem Offer Codes?

When you create Offer Codes, you select which cohort of your customers are eligible to redeem the offer.

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Your choices are: 

1. New Subscribers
2. Existing Subscribers
3. Expired Subscribers

Let's dig into some of the use cases for each target customer group.

New Subscribers

These Offer Codes target users who have never purchased the subscription product. Here are a couple ways you might want to use this type of offer:

• Use as an acquisition tool to bring new users into your app's funnel
• Use as an acquisition tool to convert users who have already downloaded/used your app into your subscription

Existing Subscribers

These Offer Codes target users who are current subscribers of the subscription product with auto-renew turned on. Here are some ways you might want to use this type of offer:

• Use as a loyalty-building tool to reward your best subscribers with discounted pricing for a period of time
• Use as a customer service tool to for user(s) who encountered a negative experience with your app or brand
• Use as a retention tool with existing subscribers who are showing the early warnings signs for churn

Expired Subscribers

These Offer Codes target users who are a former subscriber of your subscription product. Here are some ways you might want to use this type of offer

• Use as a win-back tool to encourage former subscribers to re-subscriber to your subscription product

What Promotions are Possible with Offer Codes?

In addition to targeting specific eligible customer cohorts, Offer Codes support three offer types:

1. Pay as you go
2. Pay up front
3. Free

Let's look at each of these in more detail:

Pay as you go

Pay as you go offers give you the ability to set a price for eligible customers to pay weekly for between 1 and 12 weeks. Even for a monthly or annual subscription product, this gives you the power to charge a customers a small amount more often.

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Pay up front

Pay up front offers let eligible customers pay one flat price for a certain duration. For example, even for a monthly subscription product you may find that a promotional offer of one price for the first 3 months is the best way to keep the subscriber from churning out 30 days.

Free

Free offers give you the ability to offer between 3 days and 1 year free. This type might be used in customer service situations or as part of your acquisitions efforts.

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Offer Code Limitations

• Only available on auto-renewable subscriptions type in-app purchases
• Generated on a by product SKU basis
• Generated for one of three potential eligible customer types: new, existing, and expired (former) subscribers.
• Customers can only redeem one code per offer
• Customers may redeem multiple different offers, even if they are for the same subscription product
• Offers can be redeemed in-app or on the App Store with a URL
• Offer Codes expire on a specific date, maximum 6 months from the time they were created
• You can have a maximum of 10 active offers per subscription and 150,000 codes per app per quarter
• They only work with devices on iOS 14 and iPadOS 14 and later

How are Offer Codes Different from Introductory Offer & Promotional Offers?

Offer Codes compliment Apple’s other offer types: Introductory Offers and Promotional Offers.  

While Introductory Offers can have time bounds, these are best used for your "business as usual" offers. For example, use Introductory Offers for your standard Free Trials for a subscription product. Introductory Offers apply to anyone buying the product, so there is no redemption event that needs to take place.

Tip: Please note depending how you setup your Offer Codes, they can combine with Introductory Offers so keep that in mind when you are considering what you want to offer.

Promotional Offers can be used to deliver some of the same strategies as Offer Codes for Existing and Former Subscribers. When you find an Offer Code strategy that works well for those customer types, you can use Promotional Offers to operationalize the strategy inside your subscription business logic. While more complex to adopt, Promotional Offers have the benefit of delivering the same business impact, but without requiring Offer Code distribution and redemption.

Final Thoughts

Use Offer Codes as a useful for marketing and customer service purposes.

For marketing, they are a great tool for acquisition, retention, and win back campaigns. They are easy to setup, so they are a great way to experiment with different subscription marketing strategies in meaningful numbers. Once you find a strategy that works, use Promotional Offers to operationalize at scale.

For customer support, they can be utilized on a case-by-case basis to help resolve customer service issues.

For end users, while some frictions exists to redeem, it's not any more so than an App Store or iTunes gift card.

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