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Sub Club by RevenueCat
Achieving Mission & Profit with Freemium — Erin Webster-Shaller and Paul Apollo, Lose It!
Jul 12, 2023
45:08
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Introduction
In this episode of the Sub Club Podcast, host David Barnard interviews Thomas Petit, an independent consultant focused on subscription app growth. They discuss the challenges of paid user acquisition (UA) and provide insights on setting goals, measuring results, and optimizing campaigns.
Setting Clear Goals
Before diving into paid UA, it's crucial to set clear and realistic goals. Thomas advises app developers to ask themselves why they're turning to paid UA and what they expect to achieve. It's important to define specific return goals and minimum acceptable outcomes to avoid unnecessary setbacks and disappointment. Thomas suggests digging deep into the goals and objectives and understanding the motivations behind them.
Cash Availability
Another important factor to consider is cash availability. Thomas recommends evaluating how much money you can afford to invest in paid UA. It's essential to have enough funds to finance the acquisition before any returns start coming in. Thomas suggests starting with a monthly ad budget between $10,000 to $20,000 to see meaningful results. Having sufficient cash enables experimentation and learning.
Revenue Per Install Analysis
Understanding the revenue per install (RPI) is crucial while planning for paid UA. Thomas discusses the importance of analyzing the revenue generated from each install and how it varies across different platforms and countries. RPI helps determine whether paid UA will be profitable and identifies the viability of different channels. Thomas emphasizes the need to be realistic and take into account the complexity and nuances of the app's revenue model.
Tooling and Measurement
When it comes to measuring the results of paid UA, Thomas recommends having the right tools in place. Using a mobile measurement partner (MMP) is advisable for unified data and tracking across multiple channels. However, if your budget is limited and you're starting with channels like search ads or influencer marketing, an MMP may not be necessary initially. It's essential to have a way to see and understand the results of your campaigns, whether through MMPs, ad network consoles, or internal analytics tools.
Blended Subscriber Acquisition Costs and Funnel Analytics
Measuring the effectiveness of paid UA involves looking at both high-level metrics and specific campaign analytics. Thomas suggests analyzing blended subscriber acquisition costs as they provide a comprehensive view of your overall acquisition efforts. It's important to align incentives by focusing not only on paid UA but also on organic channels and optimizing the entire funnel. Incrementality testing is essential to identify the impact of specific channels and campaigns on user behavior, conversion, and retention.
Conclusion
Paid UA requires a strategic approach and thorough analysis of goals, cash availability, revenue per install, and measurement. It's crucial to set clear goals, understand the limitations of budget, evaluate revenue potential, and use the right tools for measurement. Balancing high-level metrics like blended subscriber acquisition costs with specific campaign analytics helps optimize user acquisition efforts. While attribution is never exact, continuous monitoring and testing enable informed decision-making and successful paid UA campaigns.
On this episode: balancing mission and monetization, the challenges inherent to referral programs, and why Lose It! had to abandon a big push into paid user acquisition.
Top Takeaways
🆓 Excellent free products need a large user base to upsell — messaging millions of users about special offers can deliver fantastic returns. (10:32)
🚂 Extend onboarding for increased trial engagement by asking more personalized questions to boost trial start rates and tailor the user experience. (14:43)
👏 Celebrate user success to drive word-of-mouth marketing and organic growth, while strengthening the bond between users and your brand. (25:47)
🥇 Encourage setup of premium features during trials while carefully A/B testing each feature for user resonance. (31:49)
🏃 Identify key actions to boost user conversion with the power of data analysis: Target users with discounts or special offers to entice them to upgrade to a premium subscription. (36:29)
About Erin Webster-Shaller
👨💻 VP of Marketing at Lose It!, one of the first health and wellness apps on the App Store.
💪 Erin has been responsible for determining whether new features should be premium or free, as well as running A/B testing for messaging.
💡 “There’s a lot of gimmicks in the weight loss industry: We try to be authentic and real with what this product can help you do — but also not oversell it [and] promise something that isn’t realistic.”
About Paul Apollo
👨💻 Senior VP of Operations at Lose It!.
💪 Paul has been with the company for nine years and has spent nearly that entire time in growth marketing.
💡 “We want to make sure that there is an excellent free product available for anybody who wants access to it.”
Links & Resources
‣ Connect with Erin on LinkedIn
‣ Connect with Erin on Twitter
‣ Connect with Paul on LinkedIn
Episode Highlights
[1:45] Mission-driven: Lose It! founder JJ Allaire was tracking calories on a spreadsheet when the App Store was born. Increasing satisfaction for happy users aligned perfectly with the app’s growth.
[6:18] No monetization: The app went from being totally free to freemium. The team didn’t even dabble with ads until very late in the game.
[7:28] Buying out Series A investors: Lose It! was so profitable it became fully founder- and employee-owned when it was acquired in 2022 by Ziff Davis.
[9:22] The feature adoption journey: The team doesn’t test locking features, but they do A/B test messaging and positioning. Apps and Devices is a big crowd-pleaser, Paul explains.
[14:02] Loss aversion onboarding: When Lose It! noticed inexplicably longer onboarding, they tested with more questions, which snowballed into significant success. Adding premium features to onboarding didn’t have the same effect.
[20:58] 135 million-pound loss: 50 million users came primarily from consistent word-of-mouth growth and organic acquisition. Experimenting with paid acquisition in 2019 didn’t work out.
[25:47] Pushing word of mouth: Erin explains how the company gets people to “spread the good word” to lose more, although experimentation showed that referrals aren’t a silver bullet.
[31:49] Lifecycle messaging: Paul jumps into the strategy of exposing freemium users to premium and keeping premium users engaged.
[38:07] In-app messaging: Lose It! experimented with in-app messaging versus email blasts.
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