How to Maximize Revenue with Regional Pricing — Dmitry Gurski, Flo

Do not derive regional prices from the Big Mac Index or from Netflix/Spotify local prices: your app's buyers in a country are not the average person there. In emerging markets like Brazil, iOS users are the richer part of society, so iOS prices can sit well above what an index predicts, while Android prices must be much lower. Flo finds optimal prices per country and per platform; regional prices are almost always below the US, and in rich countries (US, UK) the optimal Android price is only ~15-20% below iOS, while in countries like Brazil the iOS/Android gap is very large. Prices are set by testing rather than any benchmark, since age mix, platform mix, product type and culture all shift the optimum.

With 200K+ installs a day and ~70M MAU, Flo uses a 'brute-force' approach: create large enough test groups, put many price points into test against the initial price, and decide separately for each region. The success metric is the effect on average revenue per user, not conversion, because price moves trial conversion, trial activation and subscription retention together. Example: a price half as high can triple retention and give much higher overall ARPU.

Reduced the Brazil subscription price 'really significantly' (exact level not given), chosen through the regional price-testing process. The lower price raised conversions and improved retention.

At the higher Brazil price there were too few conversions to feed ad networks' optimization and compete in auctions. After the price cut, conversions became frequent enough to send sufficient signal to the networks; Flo found a 'hot spot' for paid acquisition and significantly increased paid UA volume in Brazil, profitably. Networks and spend not given.

In countries where women mostly cannot pay (no credit cards, no money), where 99%+ of users would never convert, Flo opens the premium features for free instead of keeping them behind a paywall. Done for mission reasons, not business ones; Flo communicates it as a pro-social campaign. Now free in more than 50 countries, with 20M+ subscriptions gifted (vs ~10M sold).