Sub Club: The Hidden Cost of Underpricing Your Subscription

Guest: Patrick Rills, Chief Product and Technology Officer at Lose It!
Hosts: David Barnard, Jacob Eiting
Date: March 3, 2026

Episode Overview

This special episode features Patrick Rills from Lose It!, diving deep into the pivotal decision to double the app’s subscription price for the first time in over a decade. Patrick and David explore the market pressures behind this move, the rigorous price testing process, the impact on user retention and acquisition, and the psychological and operational factors shaping their monetization approach. This episode is packed with actionable insights for anyone scaling a subscription app amid changing market dynamics.

Key Discussion Points and Insights

1. Background — The Pricing Dilemma

• Lose It! maintained its $39.99 annual premium pricing since 2012 (even before auto-renewing subscriptions were mainstream).
• Market and platform changes dramatically increased customer acquisition costs (CAC), pushing the team to reconsider pricing.
• Recent changes by Meta further restricted advertising options for health and wellness apps, further increasing CAC.
  • Quote:

    "The biggest push for this has been the cost of acquisition has gone up, especially since CACs are going up on all channels because of increased competition and there's been some restrictions."
    — Patrick, [02:30]

2. Shifting from Organic to Paid Acquisition

• Historically, Lose It! relied on strong organic App Store presence due to its longevity and reputation.
• Increased competition reduced organic install dominance, necessitating more aggressive paid user acquisition.
• At the old $40 price point, paid campaigns struggled to achieve a positive ROAS; raising prices enabled more headroom for paid spend.
  • Quote:

    "...as competition grows, that's going to happen less and less. So we are looking to really ramp up our paid acquisition and we need the economics for that to be a little bit better. At a $40 price point it's...much harder than at an $80 price point to get the ROAS that you need."
    — Patrick, [04:09]

3. Extensive Price Testing Insights

• Over the years, the team experimented with price points from $5/year to $120/year.
• Until recently, higher pricing always reduced net revenue due to lower conversions, but by late 2024 new tests at higher price points broke even.
• Multiple cohort tests across platforms validated that increasing price wouldn’t lose money, opening the door to investment in paid acquisition and advanced features.
  • Quote:

    "We kept getting similar results. We felt pretty confident that raising the price, we were not going to lose any money. If this is really going to unlock paid acquisition and some other things...then why not do it?"
    — Patrick, [05:45]

4. Retention and the Freemium Model

• Lose It!’s retention rate stayed stable post price increase.
• The robust free tier ensures continued value for users, even if conversion to premium slows.
• The premium upgrade remains for users requiring extra motivation or advanced features.
  • Quote:

    "Our free product has always been very useful to people... The premium product is just that much better."
    — Patrick, [07:34]

5. New Pricing Unlocks: Discounting & AI Features

• Higher price point enables deeper and more aggressive discounting strategies within the app’s sale mechanism.
• The ability to fund AI-driven features is critical, as the marginal cost of such offerings rises.
  • Quote:

    "At $80 we can do more steep discounting. Everyone knows about the sale psychology. You know, the bigger the percent, usually, the higher the conversion."
    — Patrick, [08:28]

6. Internal Buy-in and Team Perspective

• The product team advocated for price increases, recognizing that competitors charge comparable amounts and that Lose It! delivers equivalent value.
• Price also acts as a signal of product quality and worth.
  • Quote:

    "They felt like they were doing work that was just as valuable to users as our other competitors' work. But it wasn't being reflected in the price. And what are prices if not information about how something valuable is?"
    — Patrick, [09:39]

7. Pricing Psychology and Pandemic Lessons

• For a time, being the lower-priced option helped the brand, especially during COVID-19 when consumer uncertainty was high.
• As acquisition has shifted to paid channels, price comparison is less frequent or relevant.
  • Quote:

    "I don't think there's too much comparison shopping going on either, which is another reason why this is working."
    — Patrick, [11:23]

8. Exploring Further Monetization (Tiers, Ads, Partnerships)

• Higher subscription tiers are under consideration, alongside ad monetization, in-app purchases, and affiliate partnerships.
• Future changes will be data-driven and designed to unlock more value for the most loyal users.
  • Quote:

    "We're considering all options. Higher tier is not off the table."
    — Patrick, [11:49]

9. The Decision to Grandfather Existing Subscribers

• Existing subscribers kept their original price; only new/returning users saw the increase.
• UX was central: Apple’s mechanism for price hikes on existing iOS subscriptions is clunky and risky.
• The team values fairness and tradition, regularly grandfathering loyal users into favorable legacy terms.
  • Quote:

    "We've always had just a tradition of doing that just because, again, we love our users and we feel like whatever bargain they entered into whenever they came to us, we try to keep as much as possible."
    — Patrick, [14:13]

Notable Quotes & Memorable Moments

• Patrick Rills (on price as value signal):

  "What are prices if not information about how something valuable is?" [09:39]

• On the risk of raising prices on existing users:

  "It was just too big of an unknown for us... We've always had just a tradition of [grandfathering]... we love our users and we feel like whatever bargain they entered into whenever they came to us, we try to keep as much as possible." [13:44]

• On experiment vs. reality:

  "So far, the results have been exactly our experiment results, which hardly ever happens... so far it's been holding up very, very well." [16:06]

Key Timestamps for Important Segments

• Intro and background on Lose It! price history: [01:54 – 02:30]
• CAC and advertising shifts in app economy: [02:30 – 04:46]
• Details on price testing and findings: [04:46 – 06:41]
• Impact on retention and free/premium model: [07:19 – 08:07]
• Unlocking deeper discounts and new features: [08:07 – 09:22]
• Product team’s view on raising price and signaling value: [09:22 – 10:18]
• Monetization alternatives and future plans: [11:49 – 12:31]
• Grandfathering decision and user loyalty philosophy: [12:56 – 14:59]
• First month’s results post-price hike: [15:52 – 16:36]

Conclusion

Patrick Rills offers a behind-the-scenes look at the complexities and opportunities in subscription app pricing. Lose It!’s evidence-driven approach—balancing business imperatives, user experience, and team philosophy—proves that bold pricing moves can unlock growth and product innovation, especially when combined with loyalty to long-term users and openness to test new strategies.

Are you an iOS developer?
Patrick is hiring: “Please seek me out on LinkedIn!” [16:49]