Price Power 12: Price Testing for Subscription Apps with Michal Parizek
Michal Parizek, pricing and growth lead at Mojo, explains how to predict long-term revenue from short-term price test data, why Apple's automatic regional pricing is wrong for most apps, and how to sequence pricing, packaging, and paywall tests for maximum impact.
Michal walks through the 13-month revenue projection model he built at Mojo, which uses seven-day cancellation rates as a proxy for annual renewal rates. He shares how his team raised yearly prices by 50% in the US and Germany with minimal conversion drop, how they tested free trial lengths and found almost no difference between three-day and seven-day trials, and why the ratio between monthly and yearly plan prices matters more than the absolute price point.
What you'll learn:
- How to use seven-day cancellation rates to project 13-month revenue
- Why Apple's exchange-rate-only pricing leaves money on the table
- How to sequence price tests: price first, then packaging, then paywall design
- Why the monthly-to-yearly price ratio drives plan share more than absolute price
- How hiding the monthly plan pushed yearly share from 60% to 80%
- Why free trials still matter for new users, despite advice to remove them
- How three-day trials performed as well as seven-day trials at Mojo
- Why your first price test should have big price gaps, not small ones
- How traffic source mix can distort price test results
- Why a 100% price increase was a short-term winner but long-term loser
Key Takeaways:
- Seven-day cancellation rate is a reliable early signal. 20-30% of cancellations happen in the first seven to ten days. Measure that rate per variant, project renewal rates from it, and you can evaluate a price test without waiting months. Mojo validated this against real data and it held.
- Apple's regional pricing is just exchange rate math. No purchasing power, no local context. Look at your top five markets individually, compare conversion funnels by country, and cross-reference competitor pricing.
- Pricing and packaging beat paywall design in impact. Changing price points, plan structures, and introductory offers had more effect than design or copy. Start with pricing, then plan mix, then layout.
- The monthly-to-yearly price ratio drives plan selection. Changing only the monthly price shifted yearly subscriber share significantly. The perceived deal relative to monthly is a strong behavioral lever.
- Don't remove free trials for new users without testing. Mojo tried it based on popular advice and saw revenue decline. Test it for your app.
- Start price tests with big jumps. Test $40 vs $60 vs $80, not $50 vs $48 vs $52. Find the zone first, refine later.
- Revisit cohorts months after shipping. Mojo's 100% price increase looked great short-term but cancellation rates spiked. The 13-month projection caught it.
Links & Resources
- Michal Parizek's Botsi blog post: https://www.botsi.com/blog-posts/pricing-experiments-the-backbone-of-mojos-monetization-success
- Michal Parizek on LinkedIn: https://www.linkedin.com/in/michalparizek/
Timestamps
0:00 Intro
1:03 Using seven-day cancellation rates to predict 13-month revenue
3:25 Building the report template and data pipeline
6:13 Validating the renewal rate prediction model
10:03 Benchmarks for new apps without renewal history
12:09 Why Apple's automatic price tiers are wrong
13:33 How to research and set regional prices
17:10 Relationship between pricing, packaging, and paywall design
21:15 Sequencing: price first, then packaging, then design
23:55 Why paywall layout tests that touch plan visibility are most impactful
26:41 Free trial strategy and length testing
31:03 Paid trial options as an emerging trend
33:16 The biggest mistake: not having enough data volume
35:56 Raising prices 50% in the US and Germany
38:46 Start with big price gaps, refine later
40:11 Don't be afraid to test prices