Episode 1
· 54:31
Hi, everyone. Welcome to an AF chat. Subscriptions is a topic that I care about a lot because that's how a lot of apps and more and more games, which is not surprising, are starting to really make money. And I'm not talking about kind of making money. I'm talking about really making money.
Ariel:And it doesn't require being a big company or a Tinder or anything like that to leverage subscriptions to have a really good business. And I invited Jake to tell us some more about that, because Jake is 1 of those people who started out something really from scratch. And I have met Jake, what, 4 maybe years ago, something along those lines. And really seeing how his empire really got built from the ground up. And there's actually a really funny story to how we met.
Ariel:I don't know if you remember, but we were at a conference and we were at a workshop. I was not presenting at that time. We're both sitting in the audience. And it was a workshop about landing pages
Jake:for websites. And Yeah. I remember that.
Ariel:Someone said something, and I, I talked about a tool that I use for website AB testing, Google Optimize back then. And Jake was sitting, I think in front of me immediately tried it out without even knowing who I was. I was just, like, randomly talking into the ether. And I see it on his computer from here. I was like, oh, this kid is gonna go far.
Ariel:This guy is going places
Jake:I I recommended that countless times since then.
Ariel:It's such a good tool. I mean, anything that allows you to gain visibility, AB testing is a good tool. We'll talk about AB testing in a little bit too. But that's how it all started, and then Jay came to some of our events physically in the office. That's what we're talking about before when you couldn't hear Jake, and it was it was just a blast.
Ariel:So I'm I'm really happy to have you here, Jake. I'm not gonna tell you a story that's a you thing, But Jake is a really talented developer. He really understands the game of subscriptions and really understands what it means to go from a download, which is where I usually talk about how to get to a download, and turn that download into a paying subscriber, which is really the goal for everyone. So welcome, Jake. Thank you for joining.
Jake:Thank you. Thank you for
Ariel:suffering through this microphone ordeal. And, can you tell us a little bit more about yourself, where you started, why you're here, and, we'll talk about subscriptions.
Jake:For sure. For sure. So I started iOS development in, in high school. I built myself a little fitness app that let me, it it was hard coded with just my with just my routine. And I would log in every day, and I would I would basically just have a reference list for what to do at the gym.
Jake:In college, Zwift came out, made programming a lot more approachable than it was in high school. I built upon that first app, created an app called Lift Log, and that let other people input their own routines and track their own workouts. After around 3 years, LiftLog had collected so much data that I had this idea where I would take all that data and create, an algorithmic approach to weightlifting, where the app would provide you with a workout routine that you can follow, and automatically adjust its sets, reps, and weights based on your workout history and based on other people's workout history. So I bootstrapped that app. That was called Fitness AI.
Jake:I bootstrapped it to a 1, 000, 000 in recurring revenue, in a little over a year, not without my friends, specifically Zachary Chikad and Gennady Gennady Ocrane. They, that's what I love about this community. You know, people just share things. And, they basically taught me that you could spend money on Facebook ads and turn those, users into subscribers and, turn that into a process that you can iterate on, and grit up, quite substantially. After a while, I pretty much drink the AB testing Kool Aid a little more than I should have, I think.
Jake:And I would focus way too much on, optimizing my onboarding and optimizing my paywall. And it took me around 3 years to realize that I started the wrong business. And at around the same time, III became very close with, Superwall's cofounders, Justin Hilliard and Brian Englin. And we decided to both ditch our previous, startups and to build an AB testing platform for, for developers with respect to paywalls.
Ariel:What a story. I mean, so I this talks to me directly because I also started out making things and realized there was this big need for tools for other people who make things. And I mean, the rest is history. So it's it's such an interesting path to be on. But that's also I think, you know, like, you know the pain.
Ariel:You know what it means to have a paywall or, or a paywall, yeah, that doesn't convert. So, 1 of the things that we can talk about for days, but just to kinda kick start this is I always talk about how to get downloads. I talk about getting downloads because that's the most important thing at the top of the beginning. The beginning of the journey of making money. And when it comes to subscriptions, that's just the beginning.
Ariel:Right? So from what I've seen, the developers I talk to, everyone that I talk to, a lot of people don't really realize that getting people to pay you is about more than just making great features. Right. And you know this firsthand. You make great features, but people may not get to get to that point because there's a wall in between a paywall.
Ariel:So,
Jake:Yeah. So I think that, you know, people's products fall into 2 2 groups. 1 is your product fantastic. It retains well. Those products are afforded the ability to, you know, give away their services for free and and say, okay.
Jake:People will subscribe later on. The thing is, it takes a long time to get there, and you're not gonna continue iterating unless you show the paywall really early and get people to subscribe without trying your product. That's that's kind of where where I sit. Yeah.
Ariel:And I think that makes a ton of sense. You can easily just say the whole thing is free. Go to town. I'll learn from you, but then you make no money. But then you think, well, you know, if I give to them, eventually when I just ask for a little bit in subscription, they'll definitely pay me.
Ariel:Right? And the answer is no. Any trans any any change from free to paid, you need to think about because that's really a change and that's where paywalls come into play. And I've seen a lot more attention to paywalls on my Twitter feed over the last few months, and I think it's it makes sense with reason. Right?
Ariel:So how how where would you say you started realizing that Paywall was kind of a stopping point for people and then started those AB tests and really obsessing over those?
Jake:So when Fitness AI first launched, the we we monetize with an $8 a month product. You got 3 free workouts. This is remotely configurable, so I can give you 1 1 free workout up to 7 is what I tested. And, so I started with 3 free workouts because that's what our kitchen was doing. After your free workouts were complete, you got a 7 day free trial.
Jake:After that, you'd start paying $8 a month. And I launched that for a month. Obviously, no 1 subscribed. I was like, what's going on? And so I I eventually, I I arrived at the metric.
Jake:What percentage of the people even saw the paywall? It was, like, 8%.
Ariel:Oh, wow.
Jake:So meanwhile, other apps, 8% are converting. In my app, 8% was seeing the paywall. And so I realized something had to change. So in the spirit of building testable experiments, I didn't I didn't wanna just turn it on for everyone. So I made I made it 1 of the earliest best decisions I made was making everything remotely configurable.
Ariel:Mhmm. So I
Jake:could choose where the paywall pops up. I could choose what the text in the paywall is. I could choose what the primary product is. And that led to rapid iteration, which in the course of 2 weeks, I ran a bunch of experiments and got it up to at least 5, 6% install to pay install to trial. Yep.
Ariel:Talk about, the difference.
Jake:Oh, yeah. And then over the course of a year, increased it to around 8% install to trial. And then right when Superwal came out, I tested a paywall before onboarding, which I never tested before, and I added a video. And install to trial went up to 15%. Wow.
Jake:And that's really when, that's when I realized the power of you you need to be able to change and move the paywall anywhere. Because if you're thinking if there's any sort of, cost associated with running a test, the chances that you'll find a winner is greatly minimized.
Ariel:Absolutely. I think that's the lesson we learned with Google Optimize back all those years that it has to be super simple. And it's very difficult to make these things super simple, which is something Super Bowl does for you, which we'll get to later on. But 2 things that I wanted to bring up are, 1, we're gonna talk about actual ways, like, actual things that Jake did to really get the ball rolling, and also more advanced stuff that you can go and you should do and you should definitely do. And if you don't have a way to test them, we'll talk about how you can do that too.
Ariel:But the other is the chat is for questions. So if you have a question for me, for Jake, about anything that's relevant, please put it in the chat. I'll try to bring those on screen if they fit into what we're saying. If not, we'll try to get to them at the end. So ask away.
Ariel:And even if we don't get to them, we can later on turn them into comments and respond to them even after the livestream. So if you have a question, make sure we see it and we'll do our best to answer it. But back to our scheduled programming. So a lot of a lot of what I When I think about ideas to improve things I think about, like, the randomest ideas. And sometimes it's little.
Ariel:It's like changing some text, and sometimes it's crazy, like, moving things to the top instead of the bottom. Or, like, you were saying, moving when you ask to, like, right up front as opposed to later on, which you don't would make sense in most cases. How did you go about 1, about coming up with these ideas, and 2, about saying what should I do first?
Jake:It it your ability to iterate is, like, linearly correlated with how good your your analytics are set up. So when someone isn't converting, I literally have to write I write out all the steps. What does someone need to do to get from point a to conversion? And then you create funnels, and you're in in Mixpanel or or, whatever analytics provider you use, and you and you see which steps have the highest, drop off rate. You try removing them.
Jake:You could swap the order out. So, like, a specific good trick for onboarding. If you have, like, 15 steps for your onboarding and you're trying to optimize optimize for completion, just sort the sort the onboarding steps by each step's conversion rate. So put the highest converting steps up front, lowest converting steps at the end, and analyze it. So, yeah, I would say just being very systematic about what does a unit user needs to do to get from point a to point b and then analyzing the hell out out of that.
Ariel:I think that's such a good starting point because a lot of times when I talk to people, they really forget about this whole journey. The user has to get from point a to point b, and some parts go missing. And I think that's sometimes why we see, paywalls that, in my opinion, kind of miss the point. They forget that the user needs to, you know, travel, go through this journey. It's not just a boolean, you know, free or paid.
Ariel:What are some of the things that you have done that were definitely mistakes and no 1 should do or things that you've seen others do now that you're at Super Bowl?
Jake:Being shady with your pricing. Like, it's so it it it's it's sort of like a u curve. The shadier you are, the more people will convert. If you sort of are, like, trying to high buy in the pricing, you're basically being as shady as you can be that would get through app review. That's like the worst you'll ever do in terms of conversions.
Jake:But if you're very explicit and upfront and transparent, we actually see very similar trial start rates as to the really shady APE apps. Interesting. So an example would be instead of saying, you know how people are shady. I mean, I don't know. Instead of, like, saying, like, tap to continue, and then it opens the IAP sheet.
Jake:Yep. Instead of doing that, you would say, 7 days free, then 99, the 99.99 a year. Right? Tap to continue.
Ariel:Yeah.
Jake:Explicitly tell them to continue. Explicitly tell them how much they're gonna get. Make sure they know it's free.
Ariel:Yeah.
Jake:You know, like most people, it's free. Like, why not start a trial? Mhmm. Tell them that they can cancel. Tell them it's free.
Ariel:Yeah. If
Jake:you communicate this well and there is enough intent, intent's highest when they just download the app. So if you if you tell them that this is free right when they download it, the chances that they'll try it are much higher and to and show them how to cancel.
Ariel:That makes a ton of sense. I mean, up until now, I think most people don't know that you can easily cancel a subscription, and you can start a subscription and cancel, and you're still gonna get the 7 days or whatever, however many days, which is what I think happens to HBO Max all the time. But with all the changes in iOS 15 that now apps will make it even easier and in app be able to cancel, that also gives you that sort of flexible flexibility, you know, quote unquote, between going shady and maybe hiding that or putting that upfront. And in my experience, the easier you make it to leave your app alone, the better it is because the people who are paying you and don't need to be paying you, that, like, shady model, you don't want those. Those never help in any way.
Ariel:How do you see the the additions of those playing into really how you convert? Do you think that will have an immediate impact, or is that something that just gonna be in the background?
Jake:I I think it'll have an immediate impact. I think paywalls will begin including exactly how to cancel. Like, I think a paywall should say pro tip. Start your free trial, go to settings, and cancel if you don't like it. You still have access for 7 days.
Jake:At least you're getting people through the door. Yeah. It's 1 step closer.
Ariel:That's such a good point. You wanna get people through the door because you reduce the friction. I say friction all the time, but this is really what it is. You reduce the friction, And that's what AB testing aims to do to help you find that point, moving them around all these experiments to reduce the friction so someone knows that they can sign up and they can cancel. They can do whatever really they want, which makes a lot of sense.
Jake:1 of the easiest well, I think most impactful things people can do. If someone bounces off your paywall, so if they don't convert, hit them with a survey asking them why. This is how Blinkist arrived at that free trial timeline. The number 1 reason people didn't subscribe is because they didn't know when they'd be when they'd be billed.
Ariel:Interesting. So
Jake:it's it's a simple thing you can do. If people said they don't know how to cancel, add a graphic showing people how to cancel in the payroll.
Ariel:Super easy. It it just makes sense.
Jake:That's a
Ariel:good thing about doing these sort of, like, thinking that way. If you and have you done have you done surveys like this in Fitness AI?
Jake:No. Not for the why haven't you subscribed.
Ariel:Okay.
Jake:We've done why do you cancel surveys. Mhmm. And we've done, like, standard product market fit type surveys.
Ariel:What what is normally the response rate on things like that? The why do you cancel more specifically? Because that's also tied right into that.
Jake:I would say 2% of subscribers have filled it out, like, a 15 question Oh, wow. Survey.
Ariel:Not bad. Not bad. Only do it to retain users.
Jake:So you do it to, well, there's 2 types. You wanna figure out what what should what should you double down on? What are you not doing that you need to start doing? So to figure out what you should double down on, you ask your most passionate user. To figure out what you're not doing, you ask people who bounced off your payroll.
Ariel:Okay. Another tip. I should I should start counting these tips because they are so good. But that makes a ton of sense. Someone who comes into your paywall doesn't necessarily know maybe doesn't even know what they're looking for as much, and that's something that took me a long time to learn.
Ariel:Not everyone who ends up on your paywall knows what they want. So your payroll can't just say, if you know you want x, here's x. Your payroll really has to be a marketing page at the end of the day for what x is. And you see this done very well with dating apps who are trying to remind you how much you really want those features and not just say you get this. I mean, apps that did do that over the years have become very irrelevant.
Ariel:Something like OkCupid didn't do a good job with its with its paywall, and something like Hinge and Tinder did a much better job, and look at them now. So that's a a very interesting 1. Now we we talked about, like, making all these changes and and looking at the paywall as 1 big experiment that you can move around or you can modify. If you didn't have Superwall, how would you do that?
Jake:Remote config Okay. From Firebase. Either that or I would we didn't use remote config at at fitness AI. I just had, like, a config dot JSON that I'd host on the CDN, and it would pull that, and that's it.
Ariel:So you have to
Jake:build that, basically?
Ariel:Yeah. You have to make your own. Well, I guess that that makes sense for Superwall. And how would you do that with Superwall? What's the how do you make that so much more convenient that everyone has to install that right now and not think twice?
Jake:For sure. So when you integrate Superwall, we extract everything about the paywall away from the developer. So all you all you really call is paywall dot present. Based on settings that you configure from our dashboard, whenever that user triggers a presentation, we figure out what paywall they should see and show the right 1. So you can make rules based off user properties.
Jake:You can even retroactively decide, I wanna show a paywall whenever this analytics event gets called.
Ariel:Mhmm. So
Jake:you get that's how you can move your paywall before onboarding or after onboarding.
Ariel:Interesting. And then you experience moving it before before onboarding. What does that first, what does that mean moving it before onboarding? Just so we know. But then how does that help or change the dynamics?
Jake:There there are 2 ways to move it before onboarding. 1st is to literally make it the welcome screen. So the second you download the app, you're hit with a paywall. You're saying, listen. This is a premium app.
Jake:It's free for 7 days. Here's what you get. So people are pretty like, that's when intent is highest. So what what the benefits of that is capturing that intent. The issue is, obviously, a lot of people will bounce.
Ariel:Yeah.
Jake:But it's a fine line. And, of course, this is a skippable paywall. If people are bouncing, make the skip button more clear, if that's what you're if that's what you're worried about. The second option is you'll have a welcome screen or, like, a getting started or a carousel. This is what this app is about.
Jake:And when you click sign up, it opens the paywall. We've seen we've seen it better that you still have the you still have the welcome screen, but when you click sign up, it opens right to the paywall. That's usually the winning setup that we've seen.
Ariel:Interesting. I've seen that happen with more and more apps, or it it's happening with more and more apps that they guide you through. This is a premium type of app. It costs money. You get this for free, but you have to kinda kick this off.
Ariel:So I think that will longer term become a real thing. I wonder if Apple or maybe Google will do something to make that a little bit more, add a new tier. I know people have been talking about premium apps for a long time. I don't think that's gonna change anytime soon. But if it does, that just goes to show that this is the way to do it.
Ariel:And because everything is experimental, that's really worth an experiment for your app. I know there was a tweet from Zach a long time ago, maybe a month or so ago, where he said, make your, make your paywall the first thing people see. And I thought that was, on the 1 hand, a very dangerous tweet, but on the other, a very interesting tweet. It's interesting in a sense that just what you were saying that could get people to convert, but that could also get them to drop off. So if you just do that, you could be hurting your bottom line.
Ariel:But if you're thinking about it as an experiment, and you have some sort of infrastructure to support getting the learnings from that, that's really where it's at. So, it's a definitely worth an experiment, but it also leads me to another question. Is the pricing in your paywall, Is that a huge element in the user deciding whether to cross the paywall or not? And I'm not talking if your prices are, like, incredibly unreasonably high, but I'm saying if there if if you test prices, does conversion change significantly on small changes? Or is it really about how you structure the page and how the messaging is and when you show it?
Jake:It's a part of it. Generally, we see design, pricing, your messaging, the location of where your paywall is, and how often you give discounts, each 1 providing around a 20 to 25% lift
Ariel:Okay.
Jake:When fully optimized.
Ariel:And is that is that a cascading sort of list? Meaning, you try this first, this second, this third, or any that you try is gonna give you a nice a nice lift when you optimize it?
Jake:If you haven't optimized it, you'll probably go up by 20% when you do. So if you just say, okay, we're an app that's gonna be, you let's say you wanna do annual pricing, you decide on, $60 a year. If you realize after 2 you never tested that, you might find a price that's pretty close that'll get you 20% more money. You there is a chance that you're drastically under undercharging. So maybe you go from 68 year and you test 199 year, and you actually realize that you could double your money that way.
Jake:Because it it's very hard to conceptualize how much how big the demand is for your for your most in demand users. Basically, there there there's a chance that a small portion of the population are just dying for this thing and are willing to pay any amount for it.
Ariel:Yeah.
Jake:And so you need to capture some of that.
Ariel:Yeah. That makes a lot of sense. There is a a question that I see in the chat about, an accepted ratio. Let me bring it up on screen. Is there an industry accepted ratio for what's a good what's a good install, to free trial free trial to paid trial?
Ariel:What what would you say to that?
Jake:I'd say a gold standard is, like, 40 to 50%. We've seen 60%.
Ariel:Oh, wow. So that's, that's free to trial or trial to paid?
Jake:Trial to paid.
Ariel:Oh, wow. That is a very high bar to aim for, I think.
Jake:Install to trial, we've seen 20%.
Ariel:Interesting. So it's easier to get someone who trials your app to pay for it, from what you've seen than it is to get someone who's very new to the app. That's, that's worth a lot of experimenting then. And that's why the paywall is so important. You need to get the paywall is really the getting started well when you think about it.
Ariel:Because it kick starts a trial, if you have a trial. And I don't know many who don't at this point. So that's a really good question.
Jake:When your payroll is the first thing you see, you kind of have to include a trial. Yeah.
Ariel:They
Jake:haven't seen your app yet. But, usually, the pricing that works and the trial period that works is more correlated to the problem you're solving. Because when the user is downloading the app, they think that your prob they think that your app solves the problem entirely. Mhmm. Right?
Jake:They think it's a solution. So the solution is almost a commodity. The pricing is more dependent on how big the problem is. So, yeah, like calm, bedtime stories. Putting your kid to bed is worth $300 a year or $400 for a lifetime.
Jake:You know? Yeah. If someone builds a better version of Calm and they show a paywall, as the first thing the user sees, they won't be able to charge more. Mhmm.
Ariel:Because they
Jake:the user hasn't even tried their app.
Ariel:Yeah. The perception. It's all about what exists.
Jake:How good your how good your app is, that's correlated to your trial conversion rate.
Ariel:So you can't scare them off with your pricing early on, and you shouldn't be shady. So you should definitely show it.
Jake:Definitely show it. Yeah. Yeah.
Ariel:But
Jake:Just be very upfront that this is free.
Ariel:Yeah.
Jake:It's expensive because it works, and this problem is really annoying.
Ariel:Yeah.
Jake:But at at least it's free for 7 days. No strings attached.
Ariel:That makes a ton of sense. There is, another question that I think has a bunch of other answers already in the chat. But the question is, considering subscription app educational game for kids, how would you handle PayWell offers positioning in the user funnel? That's, that's an interesting 1.
Jake:So the buyer is the parents.
Ariel:Exactly.
Jake:Again, the intense highest when the when the parent is downloading the app.
Ariel:Mhmm.
Jake:So I would be very specific, speak directly to parents, say, do you want quiet kids? Do you want happy kids? Do you wanna and and sell the emotion of of of what the parent would be feeling if their if their kid had these things. Right? So you could be relaxed.
Jake:You know, you can you can cook without going crazy. You can work without going crazy.
Ariel:That's true. Yeah. Have you looked at, bringing up the paywall multiple times in a sequence, but somewhat rapidly, so not wait a long time, but just up another click, up another tap, up another tap up?
Jake:Yeah. If when with apps that have a a paywall before onboarding and after onboarding, the paywall after onboarding usually gets 20% of subscribers.
Ariel:So you
Jake:see a 25% relative lift when you add that paywall again after onboarding.
Ariel:So when you ask, then show, then ask. Interesting.
Jake:Will you do yeah. Paywall onboarding, Paywall.
Ariel:Yeah.
Jake:And then Paywall on every app open. And the Paywall is always dismissable.
Ariel:Yeah. You can easily check that out. Hopefully. Easily. Yep.
Ariel:Interesting. I'm really curious to do you have any numbers on easily dismissible versus not easily dismissible? Have you done any sort of
Jake:Well, there are 3 things you could do. Well, 4. 1 is remove the exit button altogether.
Ariel:But that's not allowed by App Review.
Jake:Lock out your app. Oh, is it? I didn't know that.
Ariel:I don't think it is. I could be wrong on this. Correct me in the chat if
Jake:I am. Okay. There's that 1. The second is, an x icon that appears after 10 seconds. Either like a dark pattern, or you can scroll all the way down as the button's actually on the bottom.
Jake:That's okay. You'll probably get some subscribers, but you might pay for it in trial cancellations. Something that that you that Fitness AI does, I don't have an x icon. I write out exit, and I put it on the top left, and the top right is help. So when you're looking to exit, you're looking at the top right, and you could see that you can ask us a question.
Jake:So maybe you maybe maybe that'll get people to ask a question before it just hard hard bouncing.
Ariel:And does that And
Jake:then the top left, it writes out exit. I don't know if it actually has an impact.
Ariel:Interesting. I don't know. And does that help button what does that do? Does that trigger, like, a live chat or an email or Intercom.
Jake:Yeah. Live chat.
Ariel:Okay. So something they can get a question immediately, get bounced off to a KB or something like that.
Jake:Absolutely. How many times do you go to the store and before you buy something, you wanna ask a question?
Ariel:Yeah.
Jake:Or you read reviews. You know? You gotta you gotta bring that to your app. It's not easy, but you gotta do it.
Ariel:Yeah. That's definitely true. Is do you like intercom in your app? That's a side question.
Jake:It's expensive as shit, but I love it. Yeah. It's really expensive.
Ariel:We looked at it once or twice before, but there are other much less expensive alternatives that are almost as good, I would say.
Jake:Yeah. I would say so. I think the best combination is customer dot io with Twilio and SendGrid. So you could send text, you could send emails.
Ariel:You know, that actually brings up an interesting question. There was a question that I saw in the chat. Let me find it quickly, about how do you reach users who bounce off the paywall?
Jake:So there are a few ways. So that's also 1 of the downsides of putting the paywall before onboarding.
Ariel:Mhmm.
Jake:You can't contact them.
Ariel:Yeah.
Jake:What a lot of people do, which works great, ask for, notification permission literally on the paywall. So if paywall comes up, you're asking for notifications. They don't they don't realize what's below it. But, yeah, we've seen, like, again, 20, 25 percent of revenue come from notifications that you send out after someone bounces off the paywall. So do whatever you can to get an email, get push notification access.
Ariel:So really find a way to find the user. Get an email and hit them. Get them to log in with Facebook or whatever, push notifications, really any way you could. These all get really tricky, fairly tricky, I would say, because you're trying to do all these things that really help the app, but may make the user experience a little bit more cumbersome. How how have you seen this?
Ariel:Like, have you seen something that's really amazing that kinda checks all the boxes and does not annoy the user? Or how would you go about building something like that if you had to if you wanted to accomplish everything? I'm just curious.
Jake:Well, I wouldn't just ask notifications just for marketing.
Ariel:Yeah. So you have
Jake:to make sure your app, like, does something.
Ariel:Yeah.
Jake:But explain to the user, like, listen. This is a workout app. You wanna work out more? Give us notification access so we could, you know, help you get to the gym. If you really have have a if you if you hold yourself to a strict moral standard, then make them opt in to marketing emails and notifications, which is fine.
Jake:Now that Apple lets you reach out to customers outside of your app to send them discounts, Theoretically, if the user taps the x on your paywall, you can say, hey. Do you want a discount?
Ariel:Sure.
Jake:Enter your phone number.
Ariel:Yep.
Jake:And you could just send them right to Stripe. Like, that's totally legal now.
Ariel:That's actually a really good point. Again, it goes back to any sort of way you can do to get people to cross that cross that wall is really a positive, which I completely agree with in my experience. There's a question in the chat that's a little bit different and has to do with app store optimization. And Niels is asking, me specifically, Being too harsh with your paywall resulting in high uninstall rate, how does it affect ranking performance? And in that sense, we're talking app store optimization, organic ranks in results.
Ariel:Have you done have you looked at any of that, or is that something that you do separately?
Jake:Yeah. The number 1 thing people say when I say, have you tried doubling your price? Have you tried removing the trial? Have you tried going full pay to play? So no freemium features.
Jake:Let's say, yeah, my ranking's gonna tank or my ratings will tank. Yeah. I haven't found that to be the case at all.
Ariel:Interesting. It does kinda make sense because so if ratings tank, that's 1 thing, and we know ratings are really important to app store optimization, on the Apple side of things, uninstalls, I'm pretty sure don't really ruin your chances of ranking organically. We had a live stream a few months ago where someone said that they definitely do. I have not been able to really see that in the wild in any way since. So it might have been kind of an isolated incident or something else was going on.
Ariel:But I know that on the Google side of things, uninstall definitely hurt your rank. So if someone installs your app, uninstalls your app immediately, it's not good. It's a negative metric, and they penalize you by dropping you in ranks. Google does a whole bunch of stuff with the onboarding. They care a lot about the beginning.
Ariel:So if people are downloading and leaving, they're not gonna like you. But here's the thing. That's something that you can optimize, like you were saying before. So you even if you put that up front, you can still do it in a way that will allow them to not or not allow them, but prevent them from uninstalling the app by making that exit button a lot more clear or making the getting started portion of it a little bit more obvious. So you have ways around this.
Ariel:It doesn't really have an immediate impact, but it does it could have an immediate impact. Again, test everything. I think that's the that should be the key. If there's 1 thing you take from this, test everything. So hopefully that was a good a good answer there's another question in the chat that I thought was interesting but is asking how different would you handle paywall offers for a user that installed your app through your inbound channel, blog, landing page, etcetera?
Ariel:Is that something you would even differentiate?
Jake:Yeah. Intent is much higher when they come organically.
Ariel:Mhmm. Makes sense.
Jake:If attribution was working, I would test that with a higher price if they came organic. Attribution doesn't really work now. So it's Yeah. I think it's a futile effort.
Ariel:That's, Yeah. That's a good point. The more I think about it, the more I realize. Would you change anything in the page itself other than the price? If you had the
Jake:ability to
Ariel:attribute these, what kind of changes
Jake:would you make? If if you're a fitness app and you're advertising, weight loss, then the paywall should show the paywall the weight loss, benefits to using Fitness AI. If it was, gain muscle, you know, that should be the focus.
Ariel:That makes sense. We had in the previous livestream where we talked about apps for optimization. 1 point was brought up that a fitness app is not really selling workouts. If you think about it, it's selling a trimmer midsection. It's selling weight loss.
Ariel:It's selling looking better, feeling better. It's selling all these other things. So it does make a lot of sense to customize the landing page for that intent. Landing page being the paywall at this point because it's the first thing we're seeing people could see or maybe not the first thing, but fairly early on. So that makes sense.
Ariel:Hopefully, that was the answer you're looking for, Leonardo. But that's also what I would say. And I know that when we do this, it works very, very well, and it's it's pretty useful. So definitely worth the effort, but attribution is a problem. There's not much we can do about that.
Ariel:So, you did bring up pricing, which gives me a pretty good way to ask this. Do you think that anchoring your pricing, meaning having a slightly more expensive plan that you're not really expecting people to take, but you want all the other plans to look a little bit cheaper? Do you think that's useful inside of a of a paywall, or do you think that just clutters it up too much?
Jake:I don't know. In this in the test that we've run, the bulk of which are with apps that are generating 50 to a 100 k a month in revenue, those almost always benefit from having 1 product, 1 clear CTA.
Ariel:Okay.
Jake:At the same time, you know, you have to assume comms paywall is optimized like crazy. And if they're giving you options, then I'm sure there's an op like, there's a winning. We've definitely not seen like, I could I I feel comfortable steering you away from trying to figure out a weekly product that works, a monthly product that works, an annual product that all have similar LTV and letting the user choose. That's just kind of a paradox of choice. Come up with 1 product.
Jake:If you're saying you want to say, okay. Lifetime is $1, 000 or subscribe annually for $50 a year, it it makes you think, wow. The annual seems like a great deal. Who would ever get lifetime?
Ariel:Yeah.
Jake:I we haven't run experiments like that.
Ariel:Okay. That's my problem with lifetime is lifetime is maybe interesting now, maybe helps promote the other in app, but just depending on what the price difference is. But from everything I've seen, it's just terrible for long term just being able to exist in the space as a company. You sell a lifetime and for now you see, oh, money in the bank. Yes.
Ariel:But those people are not gonna ever pay you again. And even if you stop the lifetime, they're still not ever gonna pay you again.
Jake:So Right. It's it's helpful if you're if you're spending a lot on acquisition and you find that some small portion will will triple your LTV.
Ariel:Okay.
Jake:Yep. Also, people also they they mess up the calculation. So when you're looking at LTV for for an annual product let's say you say your average LTV is $80. Mhmm. That's your average LTV.
Ariel:Yep.
Jake:There are tons of people who will have an LTV of $200 or higher.
Ariel:Mhmm.
Jake:Those are the people who are likely gonna do lifetime. Deep state average LTV will probably fall
Ariel:Yep.
Jake:For your annual product when you offer the the the lifetime.
Ariel:That makes a ton of sense. And for those of you who do not know what LTV is, I'm sure there are none of you here. But if you don't, it's the lifetime value of a single subscription. And you look at, basically, what's the most money you get from a single customer over time, and you average it across all the customers. And hopefully, over time, that continues to go up as people stick around, and you have really good engagement and retention, and your churn is very low.
Ariel:So you want that to go up, but at the same time, once you kind of cannibalize the ones that are lifting that LTV up, you're in trouble. And that all is gonna go down. There's a question from Jeff about lifetime, and I think lifetime subscription is a good question. So let me bring that in. And then there's another question from Peter I think would be nice to look at.
Ariel:So Jeff is asking, is lifetime good when converting from in app purchase to a subscription? So if your app only had an in app purchase and now it's moving towards a recurring in app purchase, what would you say to that?
Jake:I'd say always grandfather old users in. Think about how you move forward from a blank slate, whatever is best for you so that you can continue to work on the product and build a better product for your users.
Ariel:Yeah. That makes sense. In all of my pricing experiments my entire life, we've always grandfathered people. And so it's never a case of, I wanna try something, so it's your fault. Yep.
Ariel:The the 1 challenge with that is as you go through and change different and change your prices drastically, you'll end up with users who are paying more than the new price you decided on. And what to do with those is always tricky.
Jake:Yeah.
Ariel:But every Yeah.
Jake:That's again, depends on your moral compass.
Ariel:Moral compass type of app, whether it's a lifetime versus a subscription. So if someone paid a ton for a lifetime and now your subscription is really inexpensive, it's you know, you have to find the right balance.
Jake:Why would
Ariel:I do? So it's totally up to you as the developer of this, but it it is something to keep in mind, I would say, thinking about it before you even head into this. And let me find the question
Jake:Oh, a rule that we do at at Fitness AI is if we're running a price we've run experiments that had 10 SKUs in a month. Far less people that you think actually reach out saying, hey. My friend has a cheaper price. What's going on? Yeah.
Jake:If they ever say that, just give them the cheaper price. There's no there's no, like, they'd be happy. You know, just explain what you were doing. I was price testing
Ariel:Yep.
Jake:So we could generate more revenue because we're a business. We're happy to honor the cheaper price. And they're they think they think highly of you.
Ariel:Yeah.
Jake:You know, that you're, you're a stand up company.
Ariel:And I can say this from experience. I've done exactly that over the years. I went from being super scared about testing any of our prices. We were the same price for, like, 7 years. And then 1 day I was like, you know, let's just give it a try and see what happens.
Ariel:And people did ask, not many, but people did ask. And we did. We say that exact same thing. We are a business. We do wanna maximize how much money we make because ultimately, we're putting that back into making a better product.
Ariel:Everyone was happy about that.
Jake:Yeah. Everyone gets it.
Ariel:Yeah. And I think in a way, it even shows that you care about your product and we care about our platform so much, we have to make this work without compromising anything.
Jake:I was on that original 29.99 a month plan or whatever whatever it was that you were charging. Since 2008, I was on that or 2009. But the second you increase the pricing I was like, alright, Arielle. Let's see let's see what you got. And ad figures got, like, 10 times better in the last 3, 4 years.
Ariel:Yep. And
Jake:so, like, I was genuinely excited.
Ariel:You see? That's awesome. That's great to hear. I did not pay him for this. Technically, he paid me for this, so we're all happy.
Ariel:But, yeah, that's really what it's all about. I mean, you you have we as the people who set the pricing, we have such an incredible ability to really change the business. And if you don't experiment, you're leaving so much on the table. I put up a question on the on the screen from Peter who was asking, any thoughts on converting a paid app with the non consumable in app purchases to a free app with subscriptions? I know many people care about this, and I even I did some interviews in the past, which I should link to about this.
Ariel:And I'm gonna do more on this on the show, but how do you how do you see that transition happening?
Jake:So this is like an app that costs 2.99 that you now wanna start charging $10 a year for or something like that?
Ariel:I would imagine that's the case. Peter, drop in the chat if that's the case or drop your pricing, but it sounds like it. A paid app with cons with nonconsumable in app purchases to a free app with subscriptions.
Jake:You gotta just try it.
Ariel:Yeah.
Jake:So, yeah, like, remove remove the price, grandfather everybody in. There's a there's a hack to figure out when someone downloaded. You could look at when the documents directory was created. So that's just, like, a really simple way to grandfather this person in. So if it's before a certain date, they get it for free.
Jake:Afterwards, add Superwall. See how see how a paywall works.
Ariel:How easy is it to add Superwall? I've never tried, so I'm asking legitimately.
Jake:It's, like, 10 lines. Okay. It's the same thing as adding a Mixpanel or RevenueCat's probably a little bit trickier.
Ariel:Oh, yeah. That's a whole implementation.
Jake:Just like, there's a delegate. So you have to tell us we tell you, okay. You're just trying to purchase this product. You can check out however you want.
Ariel:Mhmm. And then
Jake:it's just a matter of tracking events and presenting the paywall. You just run paywall dot present.
Ariel:And how long would you say it would take someone who may have not done this before, may have not tinkered with any of this to set up the paywall side from your platform?
Jake:So we build every new sign up a paywall for free.
Ariel:Okay.
Jake:Totally custom paywall with their branding. We plan to do that for as long as we can.
Ariel:Wait. We
Jake:have someone full time who just builds paywalls.
Ariel:Say that again. So you're actually doing all the setup for people who sign up now?
Jake:Yes. We're building them a free paywall with best practices that we get from our unique vantage point. Everyone gets a free paywall. Wow. And we'll continue to help you to iterate on it until we beat your native conversion rate.
Jake:It's gotta be a no brainer. If you're selling more money, it needs to be more money. You know?
Ariel:Yeah. So we
Jake:wanna make sure you get there.
Ariel:That's amazing. That that sort of excitement that makes you say, I'm gonna do your work for you because I trust what I built. That's amazing. That's just amazing.
Jake:And I
Ariel:say that from, like, a founder perspective more so than anything else. But, and we we didn't even coordinate this before. I'm legitimately excited by this right now.
Jake:We're we're we're already like, we don't even need to do that much critical thinking. We're we're from a position where we can see what's working in every app. So when we build you a paywall and we have it, we have 5 health and fitness apps to reference, you know, it's it's it's it's a sure shot it's a sure thing that will at least get close to outdoing your native performance.
Ariel:Yeah. I can totally see that. That's I mean, just a few experiments. And, in my experience, a few experiments, and you can usually get better conversion. So you just have to try.
Ariel:But trying so hard but this makes trying so easy, so everything becomes better. I I brought up another question on the screen, which I think some people are asking. But Leonor, again, is asking, should we display the paywall alongside the sign up login section? I have seen a lot of apps that ask for a login just before paywall, and that annoys the heck out of me. Is that really useful?
Jake:Well, you need to show a login before the Paywall because people need to be able to log in
Ariel:Yep.
Jake:If they're paying. I would make the sign up button lead to the paywall, but let them skip it. And if you're concerned that if you're concerned that if that leaves a bad taste in your mouth, I have 2 responses. 1, you gotta see how much money you'd make. You gotta know as as a business owner, you need to know what you're letting what you're leaving on the table, then you can make an informed decision on if the bad taste is worth it.
Jake:And second, just keep making the exit button more obvious.
Ariel:If we learned anything, the other takeaway after experiments is make the exit button huge, but don't be afraid to show your paywall. I'm really into that. I think that makes a lot of sense. And it goes really back to if you wanna make changes, just be upfront about them. You're changing the price.
Ariel:We're trying to do better. We're just doing our best here. So that's kind of the same. Hans in the chat is saying I converted my app from a paid app, and I am now making more than 10 x from what I was selling the paid app. So Nice.
Ariel:Boy, oh, boy. That sure is something. And, 1 of the things that I think are also important, and I'll bring that up. It's a second chat from Hans. Hans is saying, I still give the original paid app buyers all their original features, but they must subscribe to get the new features, which is exactly what we did with Appfig is when we rolled out a whole bunch of plans, 3 ish years ago.
Ariel:So everything you're used to, you grandfathered into, you're keeping the same amount that you're paying even if it's very little in comparison. You're getting all the features that you had before. Nothing changes. But we have all these cool things. So if you wanna give them a try, just give this a try.
Ariel:And, in my experience, that definitely works. So Mhmm. Having the ability to even display that with a paywall, meaning have the paywall say what I just said, I think would be incredible and would definitely improve conversion, which is something we try to do on the platform. And we built everything from scratch, which was, a lot of fun. And by that, I mean a lot of work.
Ariel:But it's it definitely had that sort of that sort of increase in conversion, which was amazing, especially when you roll out a whole bunch of new features and you you change your pricing, and you have no idea what's gonna happen. It's kinda like slow roasting meat. You put it in the oven, and 8 hours later, it might be amazing Or it might be unedible. You need to go order some Chinese food. So, if you can get to a point where you have at least the tools to say, I wanna do my best to optimize this, and you start seeing the returns immediately, means you did a good job?
Ariel:Or you're starting to do a good job, and now you can convert more. So that makes a lot of sense. I think that's all the time.
Jake:Super Bowl is the Chinese food or if it's a juicy, you know, brisket in that example.
Ariel:That's the tool you need in order to make sure that your brisket is gonna be amazing. Yeah. I think. So we're wrapping up. We started a little bit late, so we'll take maybe another question or 2, and then we'll be done.
Ariel:But if you have any more questions or if we didn't get your questions, drop them in the comments, not in the chat, in the comments below. We'll take a look at these comments later on today when this video goes live live and make sure we try to answer them to the best of our abilities. And we're on YouTube, so I should definitely say this. If you like this livestream, give it a like, That thing below, and consider subscribing to the channel. I'm really bad at doing this whole YouTube spiel.
Ariel:So I'm trying to get better at it. Even on my weekly videos that I have where I share app news. Yeah. It always feels awkward. Like, if you like this, why wouldn't you hit the like button?
Ariel:Maybe because you don't know that it exists, and it makes me happy.
Jake:I don't know. That one's more awkward than the late night show host, you know, like, the post the post show.
Ariel:Where they take clips, and then it's, like, a totally different clip. Yeah. It's, it's always funny, though. I find it hilarious when they do this. So let's see what else we have, in the chat.
Ariel:1 last question maybe. Okay. Here we go. A question, what's the optimal time to give a discount once the user skips the onboarding paywall?
Jake:We've seen as early as 1 to 3 hours work.
Ariel:Oh, okay.
Jake:The way that you figure it out I'll give you our framework to figure this out instead of giving you a random number. You you need to look at you have to plot a histogram from install to conversion time, and you wanna group it in buckets of, like, 30 minutes. And the second you see that 90% of your conversions happen within, let's say, the first day, that means that you should offer a discount after day 1. If 90% of your conversions are coming in the first 3 hours, then you offer a discount on the 3rd hour.
Ariel:So you find the time the time, like, exciting, the excitement period. And just like hit it towards the end. That is interesting. I did this many many years ago. I put everything into buckets and I tried to analyze that.
Ariel:And and I ended up doing the same thing, but I haven't looked at it in a long time. I'm gonna go and do that today.
Jake:And then, yeah, you look at if if from that discount you're sending out in the 9th hour does better than 10% of your revenue, then you know that it was it was worth it.
Ariel:Yeah. Makes sense. I should also mention, 1, you should go and get started with Superwall. Apparently, it's super easy. So if you don't, you're missing out, especially if this guy is gonna do all of your optimization.
Ariel:Take him up on his offer. But also, if you need any sort of analytics and you're not already using gap figures, we have, I wanna say, the best way to look at subscription analytics coming directly from Apple, directly from Google, so they're a 100% true. They don't get merged with, like, activation windows or anything else that happens in app. They're a 100% accurate. Revenue is a 100% accurate.
Ariel:Paying subscribers, all those fun numbers are all in there. And we're always working on ways to make them as simple as possible, which is kinda 1 of the biggest problems that I've seen with subscription analytics. They're rarely easy to look at. If you know exactly what you're doing and you like Excel sheets, great. Apple will give you a ton of data.
Ariel:Google will not give you a ton of data. But if you don't wanna do that and you just wanna know how many people are paying me, what are they paying me, what is my churn rate, what is my MRR, what is my ARR, All those pieces of information that sometimes you don't even get from the store. Actually, you never get from the stores. You can get with us. We do all the math and calculations.
Ariel:So check us out. There's a link to us in the description as well. Or there will be if there isn't 1 already. Yeah. A user since when did you say?
Ariel:2009?
Jake:2009. Yeah. Something like that.
Ariel:That's incredible. That's the year we started. We celebrated 13 years, not too long ago last month. That's amazing. That I didn't even know.
Ariel:And I didn't even know Jake until, like, 3, 4 years ago. So that's, that's pretty cool. There was another quick question that I think would be nice to look at, and that is, is there kind of an industry standard for a subscription churn rate?
Jake:So I got this number from from Bravo. Do you know Bravo?
Ariel:I do know Bravo very well.
Jake:They say that they're they're, like if you're getting 40% year over year attention, you're in you're in a good you're in good standing.
Ariel:Oh.
Jake:They haven't seen more than 60% retention for companies that are doing a few million in revenue.
Ariel:That kinda makes sense.
Jake:And they're always the outliers.
Ariel:Yeah. Different apps, different industries, different types of needs. Yeah. That definitely makes sense. So I think that's gonna be the last question we take today.
Ariel:Again, if you have any more questions, drop them in the comments below. When this video goes live as a video, hopefully, we'll have answers. I'm gonna go through and check that in a few hours, and this video should be up in a few hours too. So easy peasy. Jake, thank you so much for coming here.
Ariel:This was super insightful. I really enjoy this. We can continue this for days because I have so many questions and we can get so deep into this. So I might ask you to come back, and we can do, like, the advanced version of this in the future.
Jake:I'd love to. Thanks for having me.
Ariel:But, yeah, this was a blast. If you have any questions for Jake, Jake is on you're on Twitter mostly. Right? Is that a good place Yes. To get in touch with him?
Jake:Yeah. At Jake Moore.
Ariel:Jake Moore. It's so much easier than saying my name. I'll drop both of our Twitter handles in the description if you wanna ask us anything about subscriptions, about Superwall. I will drop a link to Superwall also in the description so you can get started with that and app figures as well so you can get started with that if you aren't already. Other than that, that's all we have for you today.
Ariel:Thank you for joining us again. Everybody. This was a blast. Enjoy the rest of your day or evening or night. We'll see you all in a couple of weeks to talk about screenshots.
Ariel:So that's gonna be fun.
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