Focusing on the Right Metric to Drive Subscription Growth

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7

Brennan Clark (Product Manager at Sago Mini - Kids App) shares with Peggy Anne Salz the ins and outs of user engagement and retention, how they fuel subscription growth, and tactics and strategies deployed by high-growth companies. 

Source:
Focusing on the Right Metric to Drive Subscription Growth
(no direct link to watch/listen)
(direct link to watch/listen)
Type:
Webinar
Publication date:
November 19, 2020
Added to the Vault on:
March 30, 2021
These insights were shared through the free Growth Gems newsletter.
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💎 #
1

A mistake some marketers do is to focus on a single metric (e.g. conversion rate of a sales screen) without looking at the impact on down-funnel events. Example: impact of the free trial conversion on the trial to subscription rate, monthly churn, etc.

13:15
💎 #
2

It takes a while for poor retention to kill growth.

14:28
💎 #
3

Subscriptions have a high floor and a low ceiling. To solve for that, you can cross-sell or upsell.

17:19
💎 #
4

You can use intro plans to lower the barrier to entry (e.g. 1 month for $.99 instead of just the 24 hours trial). It helps create confidence to the users that they use the app enough before they really commit.

18:04
💎 #
5

To do geo-specific pricing if you have low resources, you can start by pegging against what Netflix is doing because they have tested everything. Example: Netflix in Turkey costs 35% of what it does in the US.

18:45
💎 #
6

The core of Sago Mini's product-led marketing/growth is to have a regular cadence in new game content and gameplay and to build anticipation each time through promotion. Example: they launch 5 games per year, as well as daily "surprises".

23:15
💎 #
7

To set your conversion values you should identify events within the first 24 hours that provide a signal of high-LTV users down the line. Understand what are the engagement thresholds that signal a subscription or purchase down the line.

25:13
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💎 #
1

A mistake some marketers do is to focus on a single metric (e.g. conversion rate of a sales screen) without looking at the impact on down-funnel events. Example: impact of the free trial conversion on the trial to subscription rate, monthly churn, etc.

13:15
💎 #
2

It takes a while for poor retention to kill growth.

14:28
💎 #
3

Subscriptions have a high floor and a low ceiling. To solve for that, you can cross-sell or upsell.

17:19
💎 #
4

You can use intro plans to lower the barrier to entry (e.g. 1 month for $.99 instead of just the 24 hours trial). It helps create confidence to the users that they use the app enough before they really commit.

18:04
💎 #
5

To do geo-specific pricing if you have low resources, you can start by pegging against what Netflix is doing because they have tested everything. Example: Netflix in Turkey costs 35% of what it does in the US.

18:45
💎 #
6

The core of Sago Mini's product-led marketing/growth is to have a regular cadence in new game content and gameplay and to build anticipation each time through promotion. Example: they launch 5 games per year, as well as daily "surprises".

23:15
💎 #
7

To set your conversion values you should identify events within the first 24 hours that provide a signal of high-LTV users down the line. Understand what are the engagement thresholds that signal a subscription or purchase down the line.

25:13
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💎 #
1

A mistake some marketers do is to focus on a single metric (e.g. conversion rate of a sales screen) without looking at the impact on down-funnel events. Example: impact of the free trial conversion on the trial to subscription rate, monthly churn, etc.

13:15
💎 #
2

It takes a while for poor retention to kill growth.

14:28
💎 #
3

Subscriptions have a high floor and a low ceiling. To solve for that, you can cross-sell or upsell.

17:19
💎 #
4

You can use intro plans to lower the barrier to entry (e.g. 1 month for $.99 instead of just the 24 hours trial). It helps create confidence to the users that they use the app enough before they really commit.

18:04
💎 #
5

To do geo-specific pricing if you have low resources, you can start by pegging against what Netflix is doing because they have tested everything. Example: Netflix in Turkey costs 35% of what it does in the US.

18:45
💎 #
6

The core of Sago Mini's product-led marketing/growth is to have a regular cadence in new game content and gameplay and to build anticipation each time through promotion. Example: they launch 5 games per year, as well as daily "surprises".

23:15
💎 #
7

To set your conversion values you should identify events within the first 24 hours that provide a signal of high-LTV users down the line. Understand what are the engagement thresholds that signal a subscription or purchase down the line.

25:13
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Approaching retention

2 buckets:

How to know what to improve/remove?

Before the pandemic, they’d have kids come in and interact with new games and features. Hard to do virtually.

Also talk with consultants in the education and kid development spaces to understand the need of these users.

Deepening engagement

2 main areas:

  • 24-hour trial period: focus on getting users to play as many in-app games as possible (threshold is 10)
  • Month-to-month: how many times the kid opens the app in a month

They launch 5 new games per year and the quality is great: the product sells itself. Since the lockdown, everything has been going up. But competition is also higher because there is time to try more apps.

The “surprises” daily activity

“Surprises” is a daily activity (new feature): a kid doesn’t know which experience (character, game) he is going to get. It creates anticipation as well as a more meaningful connection between the kid and the character. They’ve seen a 15 to 20% increase in app opens.

What are the metrics?

When optimizing retention, do not look at just one metric but instead at a confluence of metrics. It all depends on which part you are focusing on (in Sago Mini’s case: trial period or extending lifetime).

[💎@13:15] A mistake some marketers do is to focus on a single metric (e.g. conversion rate of a sales screen) without looking at the impact on down-funnel events. Example: impact of the free trial conversion on the trial to subscription rate, monthly churn, etc.

At the end of the day, it all comes down to revenue.

[💎@14:28] It takes a while for poor retention to kill growth.

How to arrive at the right pricing model?

[💎@17:19] Subscriptions have a high floor and a low ceiling. To solve for that, you can cross-sell or upsell.

[💎@18:04] You can use intro plans to lower the barrier to entry (e.g. 1 month for $.99 instead of just the 24 hours trial). It helps create confidence to the users that they use the app enough before they really commit.

[💎@18:45] To do geo-specific pricing if you have low resources, you can start by pegging against what Netflix is doing because they have tested everything. Example: Netflix in Turkey costs 35% of what it does in the US.

Content marketing and brand

Sago doesn't have too much brand awareness but they have strong brand affinity. So the goal is to get people to try the product, because they know the likelihood to convert will increase. 

Because brand awareness is low, asking to subscribe directly would probably not work as well.

They're just looking at content marketing, to create content targeting parents. They already have an app for parents.

Product-led growth

[💎@23:15] The core of Sago Mini's product-led marketing/growth is to have a regular cadence in new game content and gameplay and to build anticipation each time through promotion. Example: they launch 5 games per year, as well as daily "surprises".

Adapting to the IDFA deprecation

For most subscription apps, if you don't have a paywall upfront you're not going to have much purchase data in the first 24 hours. So you have to default to engagement.

[💎@25:13] To set your conversion values you should identify events within the first 24 hours that provide a signal of high-LTV users down the line. Understand what are the engagement thresholds that signal a subscription or purchase down the line.


The notes from this resource are only available to premium members.
↘ At this point, you know what to do ↙
Upgrade Your Plan

Approaching retention

2 buckets:

How to know what to improve/remove?

Before the pandemic, they’d have kids come in and interact with new games and features. Hard to do virtually.

Also talk with consultants in the education and kid development spaces to understand the need of these users.

Deepening engagement

2 main areas:

  • 24-hour trial period: focus on getting users to play as many in-app games as possible (threshold is 10)
  • Month-to-month: how many times the kid opens the app in a month

They launch 5 new games per year and the quality is great: the product sells itself. Since the lockdown, everything has been going up. But competition is also higher because there is time to try more apps.

The “surprises” daily activity

“Surprises” is a daily activity (new feature): a kid doesn’t know which experience (character, game) he is going to get. It creates anticipation as well as a more meaningful connection between the kid and the character. They’ve seen a 15 to 20% increase in app opens.

What are the metrics?

When optimizing retention, do not look at just one metric but instead at a confluence of metrics. It all depends on which part you are focusing on (in Sago Mini’s case: trial period or extending lifetime).

[💎@13:15] A mistake some marketers do is to focus on a single metric (e.g. conversion rate of a sales screen) without looking at the impact on down-funnel events. Example: impact of the free trial conversion on the trial to subscription rate, monthly churn, etc.

At the end of the day, it all comes down to revenue.

[💎@14:28] It takes a while for poor retention to kill growth.

How to arrive at the right pricing model?

[💎@17:19] Subscriptions have a high floor and a low ceiling. To solve for that, you can cross-sell or upsell.

[💎@18:04] You can use intro plans to lower the barrier to entry (e.g. 1 month for $.99 instead of just the 24 hours trial). It helps create confidence to the users that they use the app enough before they really commit.

[💎@18:45] To do geo-specific pricing if you have low resources, you can start by pegging against what Netflix is doing because they have tested everything. Example: Netflix in Turkey costs 35% of what it does in the US.

Content marketing and brand

Sago doesn't have too much brand awareness but they have strong brand affinity. So the goal is to get people to try the product, because they know the likelihood to convert will increase. 

Because brand awareness is low, asking to subscribe directly would probably not work as well.

They're just looking at content marketing, to create content targeting parents. They already have an app for parents.

Product-led growth

[💎@23:15] The core of Sago Mini's product-led marketing/growth is to have a regular cadence in new game content and gameplay and to build anticipation each time through promotion. Example: they launch 5 games per year, as well as daily "surprises".

Adapting to the IDFA deprecation

For most subscription apps, if you don't have a paywall upfront you're not going to have much purchase data in the first 24 hours. So you have to default to engagement.

[💎@25:13] To set your conversion values you should identify events within the first 24 hours that provide a signal of high-LTV users down the line. Understand what are the engagement thresholds that signal a subscription or purchase down the line.


The notes from this resource are only available to premium members.

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↘ At this point, you know what to do ↙
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Approaching retention

2 buckets:

How to know what to improve/remove?

Before the pandemic, they’d have kids come in and interact with new games and features. Hard to do virtually.

Also talk with consultants in the education and kid development spaces to understand the need of these users.

Deepening engagement

2 main areas:

  • 24-hour trial period: focus on getting users to play as many in-app games as possible (threshold is 10)
  • Month-to-month: how many times the kid opens the app in a month

They launch 5 new games per year and the quality is great: the product sells itself. Since the lockdown, everything has been going up. But competition is also higher because there is time to try more apps.

The “surprises” daily activity

“Surprises” is a daily activity (new feature): a kid doesn’t know which experience (character, game) he is going to get. It creates anticipation as well as a more meaningful connection between the kid and the character. They’ve seen a 15 to 20% increase in app opens.

What are the metrics?

When optimizing retention, do not look at just one metric but instead at a confluence of metrics. It all depends on which part you are focusing on (in Sago Mini’s case: trial period or extending lifetime).

[💎@13:15] A mistake some marketers do is to focus on a single metric (e.g. conversion rate of a sales screen) without looking at the impact on down-funnel events. Example: impact of the free trial conversion on the trial to subscription rate, monthly churn, etc.

At the end of the day, it all comes down to revenue.

[💎@14:28] It takes a while for poor retention to kill growth.

How to arrive at the right pricing model?

[💎@17:19] Subscriptions have a high floor and a low ceiling. To solve for that, you can cross-sell or upsell.

[💎@18:04] You can use intro plans to lower the barrier to entry (e.g. 1 month for $.99 instead of just the 24 hours trial). It helps create confidence to the users that they use the app enough before they really commit.

[💎@18:45] To do geo-specific pricing if you have low resources, you can start by pegging against what Netflix is doing because they have tested everything. Example: Netflix in Turkey costs 35% of what it does in the US.

Content marketing and brand

Sago doesn't have too much brand awareness but they have strong brand affinity. So the goal is to get people to try the product, because they know the likelihood to convert will increase. 

Because brand awareness is low, asking to subscribe directly would probably not work as well.

They're just looking at content marketing, to create content targeting parents. They already have an app for parents.

Product-led growth

[💎@23:15] The core of Sago Mini's product-led marketing/growth is to have a regular cadence in new game content and gameplay and to build anticipation each time through promotion. Example: they launch 5 games per year, as well as daily "surprises".

Adapting to the IDFA deprecation

For most subscription apps, if you don't have a paywall upfront you're not going to have much purchase data in the first 24 hours. So you have to default to engagement.

[💎@25:13] To set your conversion values you should identify events within the first 24 hours that provide a signal of high-LTV users down the line. Understand what are the engagement thresholds that signal a subscription or purchase down the line.