💎 Growth Gems #82 - Paid UA, Onboarding and Monetization
Hey,
This week I’m sharing gems on:
These insights come from Naomi Ionita, Samuel Hulick, and Ryan Thorpe.
Enjoy!
🥇 TOP GEM OF THE WEEK
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This an exciting opportunity to work on multiple channels with a great team, led by one of my favorite Babbelonians, Nicole Labo!
👉 Growth Marketing Associate (NYC only - hybrid)
If you know anyone that might be a good fit, please share!
Monetization: mistakes, processes, stack
Lenny Rachitsky had Naomi Ionita (Partner at Menlo-Ventures) on his podcast to discuss one of my favorite topics: pricing.
So you know I had to mine it ⛏️
The focus of this How to price your product episode is on SaaS, but most of it applies well to other products/apps as well.
💎 Pricing mistakes companies make:
Waiting too long to monetize
Underpricing (having the default price too low and/or not having different plans that cater to different segments)
Setting prices and forgetting about it (not revisiting it, not evolving it)
Naomi Ionita (Partner at Menlo-Ventures)
at 09:13
💎 There are “Day 1” and “Day 100” features.
Day 1 feature: you can get value from it the very first time you engage with the product
Day 100 feature (higher price point): more advanced functionalities, maybe deriving value from having a particular scale of data in the platform, etc.
Don’t waste users’ cognitive load by trying to get them to understand or appreciate Day 100 features when they get started. Instead, monetize more advanced users down the road by upselling them.
Naomi Ionita (Partner at Menlo-Ventures)
at 14:18
💎 Matching price to value to create alignment with your users is often a good pricing model. It helps you understand who you’re building for and better monetize different segments. Example: number of API calls, messages sent, etc. The #1 reason people were paying the annual Evernote subscription was that they felt guilty, which was suboptimal, and left money on the table.
Naomi Ionita (Partner at Menlo-Ventures)
at 15:50
🤔 My 2 cents: this makes a lot of sense for several verticals but less for others. Try charging people per workout, and watch how that goes!
💎 Think about your pricing just like you do your roadmap. Every 6 to 12 months, you’re probably launching something meaningful product-wise for your users. This is the opportunity to revisit your monetization strategy to ensure you’re compensated appropriately.
Naomi Ionita (Partner at Menlo-Ventures)
at 19:10
💎 Put together a cross-functional pricing committee (e.g., PMs, data scientists, etc.) that owns and iterates on pricing over time. That committee is responsible for talking to customers to understand who your customers are, why they pay you, what they want or value, and how much they are willing to pay.
Naomi Ionita (Partner at Menlo-Ventures)
at 19:50
⛏️ Going Deeper: below are examples of customer-facing initiatives around pricing.
Pricing surveys (e.g., using the Van Westendorp model, like chatGPT just did - here is a course for it, if needed) and interviews to understand how much you could push the envelope on pricing.
Having customers rank features to understand the relative value of each and learn which are the one or two features that are the main “carrots”. Example: have people assign to features if they are must-haves, nice-to-haves, or not necessary; or a 100 points system like this “100 Tokens” template that Jenny Pollock recently shared in an App Masters episode.
💎 Monetization is really under-appreciated as a growth lever. The impact of improved monetization is 4x that of acquisition (source: ProfitWell).
Naomi Ionita (Partner at Menlo-Ventures)
at 24:00
💎 If you know that you have a bridge to move-up markets, then “giving up” monetizing the long tail of individual users can be worthwhile. Example: Figma’s free usage at the individual level was the way to drive community and love for the product, and then if they start collaborating within a business, it’s monetized. This gave a massive top-of-funnel user base, but with the knowledge that, at one point, some would be monetized.
Naomi Ionita (Partner at Menlo-Ventures)
at 32:40
💎 Benefits of the modern growth stack:
1. Data: more data access and interoperability, less siloed data (e.g., with reverse ETL like Hightouch or Census)
2. Workflow: enablement of people and processes by building bridges so the business side can self-serve without relying on engineers or data scientists. Efforts to drive growth require new tools, and it’s now best to buy vs. build, which is made easier thanks to more purpose-built products.
3. Impact: driving hard ROI by cost reductions thanks to automation and by better engaging/monetizing customers
Naomi Ionita (Partner at Menlo-Ventures)
at 37:15
💎 A critical layer of the modern growth stack is experimentation: you need to test hypotheses and measure the impact on the business. Example: Optimizely was game-changing. Now, there are companies like Eppo that automatically ties experiments to metrics in your data warehouse, etc.
Naomi Ionita (Partner at Menlo-Ventures)
at 42:10
Onboarding: value paths
To balance things a bit, here are some more product-focused growth gems.
While what he shares tends to be a little more “Meta” than most talks, insights from Samuel Hulick (UX & Strategy Consultant at UserOnBoard) always get me thinking.
In this Value Paths 30min walkthru video, he shares his Value Paths concept and essential considerations when designing an onboarding experience.
I tried my best to do it justice!
💎 Be specific about the success state you define when looking into activation. This can vary, but “first revenue” is often the strategic activation milestone.
Samuel Hulick (UX & Strategy Consultant)
at 04:01
💎 Bother to measure! A lot of companies are not paying attention to this crucial part. You want to be getting better at improving your onboarding/product experience, week over week, to improve your key metrics. You can’t do that without measurement.
Samuel Hulick (UX & Strategy Consultant)
at 04:48
💎 There are value paths all the way down: you can always “zoom in” to find each action's beginning and end states, then zoom in on each state of that value path, etc. Value paths are composed of value paths, which are also composed of value paths.
Samuel Hulick (UX & Strategy Consultant)
at 15:17
⛏️ Going Deeper: Samuel shares that you’re the expert, so you shouldn’t leave things up to chance (i.e., to the user to figure out). This means you must think about the little actions between the main steps. And then again, about the actions that happen between these actions👇
💎 Your product’s value path is only a part of the USER’s value path. This means you want to be clear about which USER value path(s) drive users to go through your offering.
Samuel Hulick (UX & Strategy Consultant)
at 18:00
⛏️ Going Deeper: we often forget that an entire world is happening outside our product. A user is trying your product to achieve a specific “job to be done” which is most likely a small part of what they’re trying to achieve overall.
💎 Orient your workflows within the context of users’ outcomes: frame things in a way that shows that the things they’re doing (e.g., provide email, address, complete profile, etc.) helps them make progress towards what they want. This can be through success states, encouragement, etc.
Samuel Hulick (UX & Strategy Consultant)
at 19:39
💎 Pay close attention to the areas before and after your converting-to-paid workflow. Essentially, those relating to Acquisition and Retention.
Samuel Hulick (UX & Strategy Consultant)
at 20:32
It’s the third time I feature Samuel in Growth Gems. If you’re interested in learning more about his approach, check out Growth Gems #73 (Product) and #76 (User Research).
For a step-by-step approach to optimizing onboarding/activation from scratch, watch his Value Paths - Project Walkthru.
Paid UA: web acquisition, less popular influencers
This discussion between Ryan J Thorpe (CMO at Reflectly) and Jonathan Fishman (VP Marketing & Growth at Storemaven) was mostly about TikTok, and some interesting experiments were discussed.
The gems below are primarily about other things, though 🙃
💎 You can run Facebook campaigns that send traffic to the web, where you optimize for an on-page web event, then send it to the app store. Downloads will be cheaper, and it prevents you from paying MMPs for attribution.
Ryan J Thorpe (CMO at Reflectly)
at 08:13
💎 Because tracking is now so difficult, there will be periods of the year when it’s worth spending more money and others when it’s not worth spending at all. Example: holding off from spending in the summer.
Ryan J Thorpe (CMO at Reflectly)
at 11:40
🤔 My 2 cents: I like the idea, maybe for smaller apps/companies. Otherwise, if you have the right unit economics and the funds to keep spending, I see spending when others aren’t like more like an opportunity.
💎 What’s more valuable than working with influencers is to work with people that look like the customers and act like the customers. Create ads with people that might have 400 to a few thousand followers, let them publish it on their account, and boost it.
Ryan J Thorpe (CMO at Reflectly)
at 20:11
💎 Follow which apps are going viral and try to understand how they did it, especially if it’s acquisition-related. Ryan listens to Ariel’s This Week in Apps (AppFigures) to spot these and sometimes reaches out to the founder/marketing person.
Ryan J Thorpe (CMO at Reflectly)
at 28:45
And before I leave, here is a quote on product from a video on the Biggest App Building Mistakes:
“Too many features is where we end up because we don’t want to face the truth” - Jakob Brøgger-Mikkelsen (Founder & CEO at Reflectly)
See you next time. Stay savvy!
⛏️ Sylvain
🔗 sources: