Phil Carter
speaker
228 appearances
1 recordings
1 series
first heard Sep 2024
last heard Sep 2024
Phil Carter’s voice in public audio — every appearance, attributed to the second.
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But I think in reality, and this goes back to this idea of subscription fatigue, there's certainly a concept of notification fatigue as well, where if a product is bombarding me with notifications all the time,
in a way that feels completely inorganic to my natural usage frequency of that product, eventually, I'm at the very least going to turn notifications off, or I'm just going to delete the product entirely. And so that's where I think Duolingo has done a really good job of calibrating like, Yes, we want to be in the user's mindset. And ideally, we're a daily use case.
And so that creates opportunities to send daily notifications, but within a certain set of constraints. And then the other thing I think they do really well is they'll throttle their notifications. So if I stop using Duolingo for a few days, eventually, they'll stop sending me notifications because the last thing they want me to do is rage quit the app.
But the moment I come back in and do another session, that's when they're like, oh, Phil's ready to start learning again. And they'll ratchet the notifications back up. And so to me, that shows a real nuanced understanding of how to optimize notifications as a channel.
Yeah. Well, there's almost even fear tactics. I think companies can get a lot of trouble when they are more or less coercing their users to take the actions that they want as a business, but they aren't actually what their users want by using fear tactics. It can work in the short term. Scarcity and urgency are real things. And they can work to drive short-term DAU retention or to drive
100%.
Sure. Yeah. So this is mostly for earlier stage consumer subscription businesses that in many cases are just figuring out the basics, right? Like, you're not going to go into Duolingo or Strava or Tinder and talk about paywall view rate and find anybody who's surprised by this.
Yeah. So paywall view rate, very simply, is the percentage of all users who install your app who view the paywall at least once. And then to put an even finer guardrail around it, ideally, it's view your paywall at least once with an X time period. And going back to 75% or more of trial starts happen in a user's first session, ideally, you have a high paywall view rate in a user's first session.
Because there's a good chance that if a user leaves your app without seeing your paywall on their first session, they may never come back. So you want your paywall view rate to ideally be over 80% and over 80% ideally within the user's first session, or if not their first session, then certainly within their first week.
Yeah. Well, this is one of those that sounds like such a simple question. And it's actually much more complex. Because when you think about the optimal paywall positioning, it depends on what your product is, who your target customer is, what their willingness to pay is, how many cheap and easy substitutes there are for your product in the market.
And there's another piece around what your price point is. Because obviously, the higher your price point is, the longer... It's a more considered purchase, which just generally means it's going to take... consumers, they need more proof before they're going to put their credit card down. And so all of these things matter. And this is oversimplifying it.
But I would say on one end of the spectrum, you have a freemium product like Quizlet that is targeting students and teachers, but the vast majority of Quizlet's subscribers are students. So these are people who... have low willingness or even ability to pay for your subscription. They have plenty of other edtech products out there on the market. You've got Chegg, Course Hero, Brainly.
You've got more and more AI products that are cropping up and even ChatGPT. And so Quizlet is a product where a more friendly and less intrusive paywall makes a lot of sense. because they get a ton of value from word of mouth and from SEO that is driven by free users, in many cases, creating content.
And so the last thing they want to do is be overly aggressive with their paywall in a way that shuts down those free user acquisition channels. And also that is probably just not going to help on subscriber conversion because of the dynamics of selling into students. So that's one end of the spectrum.
On the other end of the spectrum, and I don't know PhotoRoom's product really well, but you do have examples of products where it makes sense to be more aggressive, either because you have a really differentiated product solution that isn't easily substituted by other products, or it's such an obvious purchase decision that a 7-day free trial or multiple free attempts to use the premium product isn't going to make as much of a difference.
And there's another piece of this, which is like, as a result of Apple's ATT restrictions, the sooner you can get signal on conversion, the better you can optimize your paid acquisition channels.
So I guess on the other end of the spectrum from Quizlet, you've got higher price products with a rapid purchase decision with users who know what they want, and an acquisition strategy that's very much built on paid advertising. And in those cases, it can make a lot of sense to have a hard paywall, And it's basically all or nothing. You don't get a free user experience out of it.
You do see a lot of correlation between companies with lower price points and organic acquisition strategies like Quizlet going more freemium and companies with higher price points that are much more dependent on paid advertising for subscriber acquisition going more pay to play.
Sure. I'll divide tiers versus durations. Tender is a good example. You've got Tender Plus, Tender Gold, Tender Platinum. Each of them have different premium value propositions. That's tiers. Duration, you've got weekly, monthly. In some cases, 3 months, 6 months. Those are unusual, but you have them. And then annual and then the infamous lifetime subscription plan.
So on tiers, I think the vast majority of consumer subscription businesses should only have a single tier, at least until they become very large, mature businesses. And they're actually becoming platforms that are offering multiple premium product offerings rather than a single product. And that's generally what you see in the market, right?
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