In this episode of Out of the Box, our host Jess Overton, Sr. Director of Sales and Partnerships at ironSource Aura, sits down with Alice Muir, Senior Growth Consultant on the Retention Team at Phiture, a Mobile Growth Consultancy.
They discuss key guidelines for perfecting the mixed model strategy to reach different audiences, how to ensure all teams plug into the work of monetization, and how to mitigate risks when you begin A/B testing your strategy.
“There are some products and business models where there’s definitely friction between the product and a subscription model. A really good example of that is dating apps and I’m actually working with a dating app right now where this is an ongoing conversation. The success of a dating app, for example, from a product perspective, lies in the ability to match people with a compatible partner and then remove the users’ need to have that dating app. So, a long term repeat subscription doesn’t resonate in the minds of users.”
“A mixed monetization model can work really, really nicely because you're looking at the different cohorts of users and different use cases and then tying monetization models to the different use cases rather than taking a blanket approach, like one size fits all users approach.”
“I think another thing that's really important, particularly if you've got a subscription business, is to understand (and this sounds obvious but a lot of people miss this) what your baseline conversion to membership rate is. So, whatever experimentation you do around that, you can understand whether you're increasing that baseline or not…
I was working on optimizing subscriptions for this company and I kept asking this question, 'what is the baseline conversion to membership?' I kept getting sent these dashboards that had things like click through rates and blended revenue and all this kind of stuff, and I'm thinking this seems like a really simple question to answer. But I think a large part of that is just making sure that you've got the right tooling and setup. Data visualization is super important and a lot of teams, when they're strapped on resources, don't actually realize how impactful it can be to have the right visualization in front of you to understand those metrics.”
“One is to make sure that you understand your segmentation, right? So make sure to segment by the different use cases of the app and the monetization model that you're targeting with those use cases. Then you would focus on those metrics that are relevant looking at that use case. That's one way of doing it. Instead of a blended approach where you're trying to keep an eye on all of these metrics for all things at all times, split it out by use case attaching the metric to the right use case and the right monetization model that matches.”
“I'm a great believer in that all of the different teams in a product plug into the work of monetization.
In high growth companies or high growth startups, sometimes it's as simple as creating those relationships, right? If people are not talking to each other and they don't really know that each other exists, they also don't really know what each other are working on. That sounds like such a simple thing but with a lot of the companies that we work with we see these silos where teams have no idea what marketing or CRM does. I think step one is relationship building…
The second is, and I think Phiture has always been really good at this, is to continue to evolve and investigate technology that makes the facilitation of relationships easier. We use Airtable a lot and one thing that we really love about Airtable is that you can have a lot of different things that are related to the work of a product in one place and have it shared and everybody has access to it."
“The most important thing for any product is to find the product market fit first. If you have a product that fits into people's lives and solves a problem that they then use repeatedly and can't live without, people will pay. There is a window of what people would be willing to pay within reason. Obviously, if your favorite app just jumps overnight and starts charging thousands, you would notice that and most people would churn. I think people get really bogged down on, 'we need to make it like $12 versus like $14 or whatever.' If you've got product fit and you've got scale, pricing in itself is probably not really gonna make that much of a difference…
“We’re trying to encourage some of the teams that we work with to not just jump into A/B testing, but also be asking the question, 'is an A/B test the right strategy for what we want to do and for this type of product?' And when I mean this type of product, I mean like thinking about who is your user base, are people gonna be pissed about this? Are people gonna be speaking to each other? What kind of scale do we have? What stage of a business do we have? Do we have skill yet or not? Really asking those questions.
Another thing that we've done at Phiture, which I've always quite enjoyed as well, is we've paid a lot of attention to things like NPS. I know there's various different opinions about NPS in the industry but I think that one thing that we've been able to do through CRM is continuously collect real time responses from people within the product and have it populate in a dashboard in real time. I think that has been a great thing for really getting to the crux of what the issues are with your product and with overall happiness. The one caveat to that is you've got to be careful when relying on qualitative data because quite often users say something and then we see in the user behavior that their behavior is quite different.
Going back to your question, I think just being mindful of the type of product, asking yourself the question, 'is this something that might benefit me to get some quick learnings, but ultimately is it gonna piss off a whole lot of people and are we gonna just generate a lot of churn?' And really understanding your users and their needs and the type of community that you have. Another thing as well is if you are making any changes, what I’ve found is that people tend to be okay and reasonable with changes as long as you communicate them and have a rollout plan. To wake up tomorrow and completely change the income stream for YouTubers or something like that is not gonna be good. To have a proper rollout plan and communication plan, don’t dismiss that, it’s really important.”
