This article was updated on February 6, 2026


The mobile subscription economy has evolved dramatically. According to
RevenueCat’s State of Subscription Apps 2025 report, the gap between top performers and the rest is widening significantly. The top 5% of newly launched apps now generate over 400x more revenue than the bottom 25% after their first year, up from 200x just the previous year. This widening gap underscores the importance of strategic paywall optimization and pricing decisions.

2025 Freemium Conversion Rate Benchmarks:

Metric Benchmark
Freemium-to-paid conversion (self-serve) 2-5% average, 6-8% top performers
Free trial conversion (with card upfront) 8-12% good, 15-25% excellent
Monthly retention (hard paywall) 12.8% median
Monthly retention (freemium) 9.3% median
Optimal trial length 5-9 days (52% of trials in 2024)

Sources: RevenueCat State of Subscription Apps 2025, First Page Sage SaaS Freemium Conversion Rates Report

Notably, hard paywall apps see faster conversions on average, but the best freemium apps still achieve strong Day 0 conversion rates, proving that execution matters more than monetization model alone. Additionally, 35% of apps now mix subscriptions with consumables or lifetime purchases, reflecting a shift toward hybrid monetization strategies.

 

Listen along to the article with an AI-generated narrator. 

Challenges of the subscription model

With freemium apps, users have the opportunity to explore and experience a product by accessing features for free without financial commitment. However, to benefit from advanced functionalities, users need to pay for a subscription.

The freemium model serves as a powerful marketing and user acquisition strategy, providing potential subscribers with a sample of what the product offers. Users are subsequently encouraged to upgrade to a premium version to unlock additional features or enhanced benefits. When unlocking key features and functionalities within the app, users must feel that the paid experience delivers substantial added value that contributes to an enriched user experience overall. The price required to access the premium experience is the measurement of that added value. On the developer side, there are opportunities to foster user retention and drive continued revenue.

Despite its advantages, the freemium model also presents challenges, such as determining which app functionalities should be made available for free and which ones should be reserved for paid access. How then should freemium apps make this distinction, and how can they find a balance between staying competitive and without giving too much away? 

We witnessed this challenge when the New York Times switched to a $15 monthly subscription in 2011. The paper continued to offer free access to 20 articles, which ultimately diminished the attractiveness of the paid plan. Finding the right balance for a subscription-based app becomes crucial, as it entails creating a free experience that attracts new users while offering an attractive premium experience. 

Once you know how to package your subscription, it’s crucial that you set a competitive price for potential users. Finding the right price point requires sensitivity toward a variety of personas, but also an understanding of their willingness to pay for access to certain features. The subscription pricing must be reasonable—price too high and you risk alienating potential subscribers; price too low and you sabotage future revenues.

When it comes to understanding how to package your subscription plan, which features to incorporate, and what pricing models to implement, there are tools that can inform your decision: market research and competitor analysis, A/B testing, analytics, and user feedback surveys. A combination of these tools will provide you with accurate solutions. The following sections focus on mapping value drivers and capturing willingness to pay through user surveys.

Using MaxDiff Analysis for Feature Prioritization

MaxDiff analysis (also known as Maximum Difference Scaling or Best-Worst Scaling) is a survey approach that aims to identify the product features or benefits that are most valued by users, and to pinpoint the value proposition that best aligns with their specific use cases. These insights are essential for structuring your various subscription tiers and offering an appealing package.

Feature prioritization with MaxDiff forces respondents to make trade-offs, which often leads to clearer distinctions between items compared to traditional rating scales where people may rate everything similarly. Research shows that users who engage with core features within the first week are significantly more likely to convert than those who don’t, making feature prioritization through MaxDiff particularly valuable for paywall optimization.

From an analysis standpoint, this scale enables you to create a comprehensive report that considers each feature individually. It aggregates the relative preference magnitude on a scale ranging from -1 to 1. The aim is to create a scale of value for different features.

How MaxDiff Survey Analysis Works:

  1. A list of items (features, attributes, benefits) is created and grouped into sets of 3-5 items
  2. Users are asked: “Which features do you value the most and the least?”
  3. For each set, respondents select the most and least valued option
  4. Choices across all sets are analyzed to determine relative importance of each item

To analyze the results, calculate the number of times a feature was selected as ‘most important,’ minus the number of times the feature was set as ‘least important,’ divided by the number of times the same feature appeared in the responses.

Best Practices for MaxDiff Surveys:

The closer the value is to -1, the less importance users attach to the feature. The closer the value is to +1, the more important the feature appears to be to users. Once this data is available, it becomes possible to determine the features that should constitute a premium plan. Exclude features that don’t add sufficient value, while not necessarily including all of the most valued features—the freemium plan must remain attractive to retain users.

Van Westendorp Price Sensitivity Meter: Measuring Willingness to Pay

The Van Westendorp Price Sensitivity Meter (PSM) is a willingness to pay survey technique developed by Dutch economist Peter Van Westendorp in 1976. It identifies the user’s sensitivity to price in order to understand their willingness to pay to access particular features. Unlike hypothetical questions like “how much would you pay for this?” which tend to produce unreliable answers, Van Westendorp pricing asks contextual questions about cheap and expensive pricing limitations.

Research has shown that people’s estimates of their willingness to pay for products can be significantly higher when asked hypothetically compared to actual purchase behavior. The Van Westendorp model addresses this by focusing on price sensitivity rather than hypothetical purchase intent.

Using a set of four questions, this technique plots a graph that gives a price range that seems acceptable for paid access to the product. For a freemium app, the four price sensitivity questions are:

  • Too Expensive: At what price would you consider the premium subscription to be too expensive and you wouldn’t buy it?
  • Expensive/High Side: At what price would you consider the premium subscription to be getting expensive but you would still consider buying it?
  • Cheap/Good/Bargain Value: At what price would you consider the premium subscription to be a bargain and you would definitely buy it?
  • Too Cheap: At what price would you consider the premium subscription to be too cheap and you wouldn’t trust it?

Best Practices for Van Westendorp Pricing Surveys (2025):

  • Collect all four price points in a single, structured question
  • Use slider-based inputs with logical limits to prevent inconsistent responses
  • Aim for at least 100-200 completed responses for meaningful results
  • If segmenting results, each segment should meet the minimum response threshold
  • This survey technique works best on free users (analyze subscriber behavior separately)

Once the data has been collected, create a line graph representing the price on the x-axis and the number of respondents as a percentage for each of the prices on the y-axis. Key intersection points reveal the optimal price point:

Price Point Description
PMC (Point of Marginal Cheapness) Intersection of “too cheap” and “a bargain.” Prices below this risk quality perception issues.
PME (Point of Marginal Expensiveness) Intersection of “too expensive” and “not expensive.” The ceiling where value perception drops.
IPP (Indifference Price Point) Intersection of “too expensive” and “a bargain.” Price perceived as neither cheap nor expensive.
OPP (Optimum Price Point) Intersection of “too cheap” and “too expensive.” The sweet spot for maximum conversion.

The range of acceptable prices lies between PMC and PME. Consider using the Newton-Miller-Smith (NMS) extension, which adds purchase probability questions to connect price perception with actual buying behavior.

Which Features Should Be Behind Your Paywall?

The Van Westendorp pricing model is valuable for understanding the overall willingness to pay for a product. However, to create the desired final matrix for subscription optimization, you need to delve into users’ willingness to pay for individual features.

To accomplish this, you can include a targeted question in the survey, such as: “How do you feel about paying for that specific feature?” The respondents would be presented with answers that require them to make choices, ranging from being entirely willing to pay to completely unwilling to pay for access to a particular feature. Unlike Van Westendorp’s sensitivity model, this type of question can be asked to both free and premium users.

AI Features and App Pricing Strategy (2025-2026):

AI-powered features present unique pricing challenges due to their unpredictable and expensive cost-per-user from GPU compute. Many apps are shifting from one-size-fits-all subscription pricing to usage-based, hybrid, and value-aligned models. When surveying users about AI features specifically:

  • Consider creating separate premium tiers for AI capabilities (like Duolingo Max at $29.99)
  • Evaluate user willingness to pay for usage-based AI features vs. unlimited access
  • Higher tiers for AI help ensure users generating highest server costs subsidize them directly

This approach is optional for non-AI apps. It could be enough to identify value drivers and then the overall product willingness to pay. But by having more granularity in the willingness to pay, you can construct a comprehensive feature value matrix, which will be instrumental in better optimizing subscription models.

Best Practices for Pricing Research Surveys

There are some important prerequisites for creating effective, unbiased pricing surveys that all researchers must take into account. Modern platforms like Qualtrics, SurveyKing, Reforge, and SurveySparrow offer templates and automated analysis for both MaxDiff and Van Westendorp studies.

Determine the Focus of Your Research

Carefully identify the critical aspects of your product and consider which specific features you’ll inquire about. To ensure the surveys are intelligible and the responses focused, avoid designing lengthy surveys. If you’ve already questioned your users, you can get an idea of their past level of engagement and build your survey accordingly. Stay within the scope of the research and do not mix the value driver and willingness to pay questions with another questionnaire.

Consider Your Audience and Segmentation Parameters

This step is critical for several reasons. Depending on factors such as the demographics of your users, their specific use cases, their stage in the customer lifecycle, and their level of engagement, the insights obtained can vary significantly. By adopting a segmentation approach, you can understand how different user segments perceive the value of features.

It’s important to avoid mixing too many different demographics together, as this can lead to counterproductive and potentially misleading insights. The minimum segmentation should be your paid and free users, as their level of engagement and commitment already differs and the survey structure will vary.

Include Screening Questions

Including screening questions in your survey is advised. They can help ensure the accuracy and consistency of respondent samples by identifying any potential errors or false answers. They also serve as a preliminary filter to verify that respondents meet specific criteria, or have a certain level of understanding or experience related to the survey’s objectives.

By incorporating such screening questions, you can mitigate the risk of collecting unreliable or irrelevant data. For example, you can start the survey with basic demographic questions, but also how long they use the app, how frequently, etc. When it comes to the features, it’s better to screen between users who don’t know about the feature in question or use it very rarely versus users who use it on a regular basis.

Other Considerations

Avoid formulating difficult or guided questions. Keep the survey free of bias. Spend time testing and reviewing the survey. The survey flow may vary from one respondent to another—for example, if a respondent doesn’t know a feature exists, you might decide to skip the value questions about that feature and go directly to the next section.

Conclusion: Building Your App Pricing Strategy

How to cultivate a proposition that feels relevant and impossible for potential customers to overlook?

It’s a fine balance between gathering user insights from your apps and products and encouraging engagement through subscription models that generate revenue and promotion for your brand(s) and product(s). As every app developer knows, subscription pricing presents frequent but navigable challenges.

Key Takeaways:

  1. Use MaxDiff analysis for feature prioritization: This method leverages users’ most valued elements against value propositions of their needs. Use this survey to structure your subscription tiers and determine what belongs behind your paywall. 
  2. Apply Van Westendorp’s Price Sensitivity Meter to find optimal pricing: How much are users willing to pay for freemium-meets-subscription apps? This technique plots user sensitivity to price and indicates the optimal price point where your target audiences are willing to pay. 
  3. Evaluate individual feature willingness to pay: A simpler survey technique that shouldn’t be overlooked—implement a deep-dive into paywalled features. Find out what features should sit firmly behind the paywall, and which features are out in front attracting target users. 
  4. Consider hybrid monetization for AI features: With 35% of apps now mixing subscriptions with consumables or lifetime purchases, survey users about their preferences for different monetization approaches, especially for AI-powered features with variable compute costs. 

Useful Resources

Before You Go

  • The Reach Audit Framework is for Growth Marketers wanting to understand their reach to ensure they’re connecting with more users and generating a bigger impact. This resource will help you understand your opt-in rates and benchmark them against industry standards, in order to identify possible drop-offs and opportunities to win-back users.
  • Both surveys and interviews are great tools to understand what people perceive as important. It is important to make a distinction between a user’s perceptions and their actions. In this article we show how user research can inform on why people are – or aren’t – converting into installs.

Dynamic pricing is the practice of having multiple price points based on a few critical factors. In this article we run you through the do’s and don’ts of such pricing strategies, and show how to set one up using Braze.

Frequently Asked Questions:

What is the difference between a freemium and a hard paywall subscription model?
A freemium model allows users to access core features for free while reserving advanced functionality behind a subscription. A hard paywall requires users to subscribe before accessing meaningful features. Hard paywalls often convert faster, but freemium models can achieve strong results when feature packaging and pricing are executed well.

How can I decide which features should be behind a paywall?
Feature placement should be guided by user research. Methods like MaxDiff analysis help identify which features users value most, while willingness-to-pay questions reveal which features users are prepared to pay for. The goal is to protect high-value features without weakening the free experience.

What is MaxDiff analysis and why is it useful for subscription apps?
MaxDiff analysis is a survey technique that forces users to choose the most and least valuable features from small sets. This produces clearer prioritisation than traditional rating scales and helps teams structure subscription tiers based on real user preferences.

How does the Van Westendorp Price Sensitivity Meter help with pricing decisions?
The Van Westendorp model measures how users perceive price by identifying thresholds where a product feels too cheap, too expensive, or good value. It provides an acceptable price range and helps identify the optimal price point for maximising conversion.

How should apps approach pricing for AI-powered features?
AI features often have variable and higher per-user costs. Many apps address this by introducing higher-priced tiers, usage-based pricing, or hybrid monetisation models. Surveying users separately about AI features helps ensure pricing reflects both perceived value and operational costs.

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