💎 Growth Gems #59 - Revenue Growth, LiveOps
Hi there,
I started a thing on Twitter.
If you read this newsletter, I’m guessing you’ll like it: follow @growthgems to get #1GemEveryday 💎
Onto this week’s gems! We have insights on growing subscription revenue and LiveOps. These gems come from Ron Schneidermann, Ashley Faucet and Christopher Fady.
🥇 TOP GEM OF THE WEEK
💎 From qualitative research in 2015 (App Store reviews, Reddit, blog posts, etc.) they learned that people found $50/year to be too expensive. So they tested $15/year vs. $30/year and had pretty much the same revenue. But they went with the higher $30/year because it allowed some flexibility with promos, discounts, etc. They’re still experimenting with this.
by Ron Schneidermann (CEO at AllTrails)
at 25:00 in Growing Your App to 1M Paid Subscribers
Revenue Growth: pricing, UGC flywheels and bundling
Another great episode from the Sub Club podcast.
Ron Schneidermann (CEO at AllTrails) has been growing the app since 2012, when AllTrails launched with a $3/month premium tier.
In Growing Your App to 1M Paid Subscribers, Ron shares insights on experimenting, scaling and growing revenue.
💎 For AllTrails, fast progress came down to relentless prioritization. They triaged a different funnel metric for each quarter: laser-focus on bounce rate, then signup rate, then pro conversion rate, then retention, etc.
at 16:43
💎 One of the big bets that AllTrails took was to focus on more “casual” segments: users that know they like to be outdoors but are maybe a bit scared to go. It’s not mutually exclusive with more serious users, but it does require making choices on the language you use, on the visuals you show, etc.
at 19:55
💎 From qualitative research in 2015 (App Store reviews, Reddit, blog posts, etc.) they learned that people found $50/year to be too expensive. So they tested $15/year vs. $30/year and had pretty much the same revenue. But they went with the higher $30/year because it allowed some flexibility with promos, discounts, etc. They’re still experimenting with this.
at 25:00
💎 AllTrails’s business is driven by a UGC flywheel: ratings, reviews, photos, recordings, curate/create trail content. It comes from both subscribers and free users, but they could damage this if they put too much behind the paywall.
at 27:44
⛏️ Going Deeper: having a User Generated Content growth loop is pretty rare (Strava also comes to mind). But not matter your subscription app, there is a balance to find between how aggressive you are with monetizing features (i.e. prioritizing immediate revenue) and alienating free users. Like Thomas Petit shared, focusing only on paid subscribers can have a negative impact on organic and ASO. You’re also limiting the potential network effect.
💎 An under-appreciated aspect of raising funds is the network of other companies. VCs oversell it but founders often underestimate it. Example for AllTrails: being able to talk with Headspace.
by Jacob Eiting (CEO at RevenueCat)
at 33:54
What could you learn from experiments on 200 consumer apps?
Maple Media has a huge portfolio, and Ashley Fauset (VP Marketing at Maple Media) discussed what she learned with John Koetsier and Peggy Ann Salz.
Below the gems from Segmentation & subscriptions: 200 apps & hundreds of millions of users at the last CleverTap Engage.
💎 Price elasticity has been very beneficial to Maple Media: they incrementally increase or decrease a subscription’s price based on the data and conversion rate they’re seeing.
at 15:52
⛏️ Going Deeper: in Growth Gems #44, I shared insights from Kate Nezhura (MobilityWare) on “How to Figure Out the Right Price Point”. Once again, learnings from the gaming world can be brought into apps. On the same topic, you might like Building Offers Your Customers Can't Refuse by Yavuz Acikalin (N3TWORK).
💎 A challenging thing about yearly subscriptions is that you have to wait a whole year for the data to understand renewals and LTV.
at 17:37
⛏️ Going Deeper: this makes the case for an initial launch with only a monthly plan in order to improve the product first (one of the several insights by Matthieu Rouif from PhotoRoom that I shared in Growth Gems #53).
💎 The optimal free trial and subscription durations vary by types of apps. In PicStitch they don’t offer a free trial because the value prop is pretty clear. But in SwitchScan they tested taking the free trial out and conversion dropped because people need to experience the app first.
at 18:04
💎 Maple Media is starting to look at adding tiered subscriptions to some of the apps through additional features. Example: Netflix allows you to watch content on 2 screens, and at Maple Media it would be a premium tier with news and stock analysis for StockPlus.
at 22:18
💎 Maple Media started building out their own payment platform in the spring. It’s partly to avoid the app store fees but also to be able to communicate around and offer their different products across their user base. They’ve launched https://appbundles.com/ where they bundled five of their premium apps. They have a productivity bundle, a gaming bundle, etc.
at 23:04
Product: motivations & LiveOps
“Once you’re live in a free-to-play game, you need to be running LiveOps and keep the content coming”
How long before this also applies to apps?
We’re already starting to see this shift with apps partnering with celebrities for content (e.g. Calm & Lebron) and with In-App Events.
In Live Ops – Maybe we were born to run? from the GameDev Seminar, Christopher Fady (Director of Product at Scopely, previously Gameloft) emphasizes that you have too many competitors to allow your game to be idle and shares tips on creating a flow to run Live Ops.
💎 To know what to add to your game, you first need to understand the product motivations: what’s working inside of the game, beyond preconceived ideas. At Gameloft, they identified 6 core product motivations (see below).
at 01:06
⛏️ Going Deeper: if you’re interested in exploring the motivation aspect further, check out the Gamer Motivation Profile and A Deep Dive into the 12 Player Motivations talks by Nick Yee (Co-founder & Analytics Lead at Quantic Foundry - Game Analytics Consulting Practice). Reach out if you want the gems from these talks, I’m happy to share.
💎 If you think in terms of the 6 product motivations, you start to think differently when comparing/benchmarking games (even if the games look very similar!). This helps you come up with new features.
at 04:00
💎 You need to plan a progressive rollout of your LiveOps content, taking into account your team’s capabilities. So even though you eventually want to make your LiveOps plan work for everyone, roll it out gradually.
at 10:29
💎 Your Live Ops tooling needs to be friendly to non-tech people and:
Have a simple layout, with easy naming and flexible targeting
Not require client updates
Allow for fast delivery at scale with support for automation
Empower LiveOps teams to change and test fast
at 12:15
💎 When you create new Live Ops, variations are key. It’s not so much about modifying the core gameplay but more about presenting something that feels new and fresh. Example: Asphalt 9 made it look like the game was hacked (“Blue Rabbit” event), The Magical Girl event in Fate/Grand Order had the same gameplay but a new theme.
at 14:57
💎 Everything that changes in the game should be considered LiveOps. There should be no division between the feature component of the game and the LiveOps component of the game. You need your best designers working on LiveOps.
at 20:14
And before I leave, a quote related to the LiveOps topic above:
“Almost any product can learn from how games run LiveOps, the same way gaming learned from retail” - Sasha MacKinnon (CEO at Mino Games) in Insights on Improving LTV (Growth Gems #29)
See you next time. Stay savvy!
⛏️ Sylvain