Building a foundation for long-term revenue growth at an industry-leading consumer app

The Client

Client provides one of the leading apps for hiking / trails, which now has ~40M downloads and ~$30M registered users across 190+ countries, and $40M in revenue

Client uses a two-tier / free + paid packaging structure. They have a robust feature set and are priced beneath their core competitors

The Context

While the client has historically been product oriented, they client has decided to explore pricing strategies to further grow revenue and paid tier penetration.

The client was interested in engaging a consulting partner to:

• Adapt Prices to Regional WTP - Increase paid tier penetration in emerging markets by addressing regional differences in willingness-to-pay and value 
• Recommend Measured Price Increases - Monetize value and increase average price where possible, without driving significant churn or creating complex choices for customers
• Increase Penetration - Drive paid tier penetration in developed markets while capturing optimization opportunities
• Assess New Packaging Options - Reach more customers and grow revenue by assessing 3-tier packaging options
• Evaluate Feature Set - Evaluate the market utility of current and roadmap features

The Monevation

Defined a new country-level pricing strategy

• Conjoint and van westendorp analyses identified variance in willingness-to-pay and revenue maximizing price points by country
• Recommended price increases in select countries based on the client’s growth priorities and price sensitivity models

Recommended two and three-tier package structures to increase revenue

Well executed three-tier models were shown to drive higher revenue and conversion than comparable two-tier models

• Recommended options for new premium and lite tiers
• Recommended adjustments to the feature paywall to increase the relative value of the paid tier and conversion

Recommended monthly billing options to expand paid-tier reach to new customers

• Market research and industry expert interviews showed monthly billing as an opportunity to reach new budget-conscious trail-goers

Recommended changes to the product’s user experience to drive awareness of the paid tier offering

• Offering awareness and education was identified as the greatest lever to increasing conversion and user’s willingness-to-pay
• Recommended new smart nudges and additional points of purchase to improve paid-tier awareness

The Impact:

• 6% ARR increase from short-term price changes
• 30% ARR increase from long-term tiering changes
• Increase paid penetration from:
  
  • Low-friction billing options
  • Awareness driving UX changes