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#AFtalks: Choosing The Right App Monetization Strategy with Curtis Herbert

AFtalks is a series of chats conducted on Twitter where we discuss building and selling apps. We’ve got a different topic/expert every week, and everyone is welcome to join the conversation.

Welcome to our #AFtalks recap!

This week we talked app monetization with Curtis Herbert. From the differences between monetization models to how some models affect the app’s. When it comes to monetization, one size doesn’t fit all.

Curtis is the creator of Slopes for iOS, and an avid Apple enthusiast. We asked him to share his insights on this topic with the questions below. Included are his answers, as well as some of our favorite insights from the community:

Q1: What is your current monetization strategy and why?

A: Monetization has been something I’ve had to experiment a lot with over the course of shipping Slopes and I think I’m finally happy with the current strategy. I’m on my third iteration, since shipping my 1.0 in Sept 2013, of how I charge for Slopes at this point. My current approach looks like this: Slopes is a free download and you get access to high-level data about your day skiing or snowboarding for free. Things like your top speed, distance, time spent on lifts vs in the lodge vs going downhill, etc. All the sweet stuff, like great-looking maps and detailed stats + a 3D replay for each run you took, require some form of Slopes Pass. These passes are sold as either a yearly subscription (think a season pass at a resort), or a consumable unlock for one-day or one-week (akin to the day-passes you buy when going to a resort).

Follow-up: At what stage of the development did you start thinking about monetization?
To be honest I didn’t really start thinking hard about monetization until my big 2.0 in winter of 2015. But with that 2.0, monetization was my main focus. I rebuilt so much of Slopes around my new strategy.

Q2: How did you approach researching monetization strategies for your user base?

A: Since Slopes is a companion to an existing hobby, skiing and snowboarding, most of my research centered around how people were already spending money in the niche. My first iteration, being a paid up front app, was very akin to how people pay for gear. But unfortunately people in general don’t like the paid upgrade model, so convincing them to pay for a 2.0 or 3.0 isn’t as easy as tempting them on some awesome new snowboard.

When I was planning my 2.0, I realized season passes at resorts are basically subscriptions, and that got me to start down the path I’m on today. My focus was to find ways for recurring revenue, and the Slopes Pass model started to make sense to me. You pay for access at a resort, based on how much you go, so why not approach the app like that? You aren’t buying the app, you’re buying access to the services it provides.

Q3: How has your current strategy changed since the app was launched (if it has)?

A: Before that big 2.0 re-work, I just charged up front for Slopes — I didn’t give monetization much thought at the time as I was so focused on building the features I wanted to see. In some ways being paid up front helped because it kept Slopes’s audience small as I built up a really compelling set of features. I honestly don’t think I could have launched with an IAP in my original 1.0.

But even my 2.0 wasn’t quite right, I hadn’t envisioned the one-day and one-week passes at the time. I was just focused on subscriptions with 2.0. But pretty quickly I realized I was missing out on a whole class of my niche: those that can only go on one big ski trip a year. There was no way they’d pay $20/yr for Slopes. So in 2.3 I added one day and one week consumables, to live along side my yearly subscription.

I’m really glad I took the time to re-think things that third time because those consumable passes now account for 50% of my revenue.

Q4: Have you ever experimented with your current monetization model?

A: Since arriving on the consumable/subscription hybrid in 2016 I haven’t tweaked the formula much. Instead what I have been experimenting on (although not as much as I’d like) is pricing in different regions. Turns out the cost of skiing in America is a lot higher than in other parts of the world, so when I moved from a paid up front app to my more expensive subscription option I lost paying users in countries located in Europe and other regions. Fortunately Apple has made this easy to play with, at least with subscriptions (not consumable IAPs), so I started playing with that a little this last winter. I think I need to do a lot more to find the prices that work for Slopes in other parts of the world.

Follow-up: Has that caused any issues with users?
So far none have complained when I experiment! And the bigger move from paid up front to IAP was pretty painless, too, but I attribute that to the fact I grandfathered 1.0 users a lot of stuff to make sure I take care of them. They were my early customers and I felt it was only right to make sure the app they paid up front for kept working as expected, even if some of the features they enjoyed now cost more money for new users. I used to be super paranoid about playing with my pricing (I dreaded the day when as a paid up front app I went from $3.99 -> $7.99. Spoilers: no one noticed, and revenue went up) but now I’ve learned as long as you aren’t doing things to break the trust of users, they largely don’t notice.

Q5: How has your current monetization strategy effected the design of your app?

A: Where I used to focus so much on the design of features (I still do), I find myself spending almost as much time focusing on things like finding the right opportunities to educate and up-sell users the premium Slopes Pass features. I spend a lot more time thinking through what the context of the user likely is on any given screen and look for the right opportunities to prove the value Slopes can provide them. I also spend a lot of time trying to balance what I give away for free, and what I charge for. That’s the downside to being a freemium app: that formula is tough. I need to make sales, but I also need to make sure my free mode has enough to keep people around (and try to convert them in the future).

Q6: What’s the one thing you wish you knew about monetizing before you started this app?

A: I wish I knew how much experimentation it would take to find what worked best for my business, so I could have started much earlier! I wasted two years as a paid up front app, afraid to mess with the model, and that really held me back in many ways.

Check out the rest of the insights we heard today on the #AFtalks hashtag

A huge thanks to Curtis and to all those that were part of today’s discussion! Join us for our weekly Twitter chat every Tuesday at 1pm ET (and bring your friends!). See you all next week where #AFtalks about the business side of apps.