An usage-based AI app · B2C · Thomas Petit client
Sell $5-10 top-up credits on top of subscription tiers
What they did
- Effort
- Several people over months of design
In their words
Signal Engineering: Strategic Data Filtering for Better Ad Performance — Thomas Petit, Independent Consultant
Thomas Petit… ads in the app and it's going to increase my conversion. Oh, I'm going to put IAPs on top of the subscription." And no, it's really tricky, and I think that's the reason it's been so slow. And actually, all the apps that are have some kind of AI usage are finally accelerating this trend, because they've got no other choice. And it's true that the big models like Claude, and ChatGPT, and so on, they mostly decided to go for tiered subscription.
Thomas PetitSo, I don't know, ChatGPT, you pay $20 a month, and if you didn't have any, well, you start paying $200 a month, or whatever. But for a lot of apps that are like usage-based, this is a model, but actually the IAP makes a lot of sense, where you can buy credits on top. I'm working on a project right now where they have both tiered subscription and credits on top, so that no user faced the frustration that you just had, that maybe you didn't want to fully upgrade to the Super Pro package,
Thomas Petitbut then for one use case, you're working on something today and you would just have added 5 or 10 bucks of credits and and finish it. And they've got a very smart team of several people that have been thinking through it for months, and it's really hard to design well like to avoid cannibalization, to not frustrate users, to make something that is fair in terms of pricing for users, but also for the developer, like it's very tricky. So, I think …
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More from this episode
- Check that Meta and Google receive the same event counts as your own analyticsGaps of 30-50% are common; fix anything above 10% before touching ads
- Send trial starts, direct purchases, trial conversions and renewals as separate eventsDefault SDK mapping often lumps them all into one event; guest says fix it first
- Send ad networks only the trials likely to pay, as their own eventGuest's go-to first step when paid trial quality lags; no numbers given
- Tell Meta to value some users more or less instead of excluding themKeeps cheap under-25 reach instead of cutting it; no numbers given
- Report each user's expected value at month 13, not what they paid on day oneGuest's main advanced lever; no numbers given
- Look up each conversion's value from a server so you can change it without a releaseAvoids app releases for every price or currency change; says it makes a big difference
- Send your conversion signal within a day, waiting a few hours to see early useVoyantis showed timing matters; guest says signals after 24 hours are nearly useless
- Keep at least 10 conversion events per campaign per day before filteringUnder ~10/day optimization breaks; well above it, fewer better events win
- Report low-value users as worth less and high-value users as worth morePushes delivery toward top users but hides true ROAS; has backfired when overdone
- Send every event to every ad network, then pick a different signal for each
- Compare the value you report with real revenue by country, not just in total
- Send Google only the trials that look likely to payGoogle trials converted at ~15% vs ~40% elsewhere; the fix moved the needle
- Count a business user's yearly plan as worth 5 weekly consumer plansWorked at first; went stale after 18 months of price changes and needed fixing
- Change which events you send to ad networks, even as a young appBig uplift per the guest; details saved for a blog post
- Put all spend behind one channel and one optimization signalGrew from 0 to eight figures in two years, then had no fallback when it broke
- Let a signal specialist filter and send your ad events, and test itOne of two tests looks good, the other doesn't; not conclusive
- Tell ad networks which users reported high anxiety, since they pay far more
- Treat users who rush a 30-screen onboarding in under a minute as low valueHeld for one app; another app found its fastest finishers were its best users
- Change what you report as user value when cash matters more than long-term LTV
- Send buyers to web checkout once the store fee jumps from 15% to 30%Works for them, per the guest; no numbers
- Report a $1 value for non-payers who look likely to stick around
- Report your biggest spenders as mid-value so Meta doesn't stop early
Tags: hybrid-monetization, credits, tiered-subscription, ai-costs