GTM Sauce

Skylight · B2C · digital family calendars and frames

Don't mark which features are premium once someone has subscribed

Renewal rates high even for light users of paid features; no numbers

Workedretentionpaywall

What they did

Inside the product, premium (Plus) features are not called out as premium for subscribers, so at renewal they don't tally which bundle features they used. Related finding: changing how the bundle's contents are merchandised to buyers rarely moved the attach rate.

What happened

Speaker believes it makes 'a pretty big difference'; renewal rates are 'pretty high' across heavy and light bundle users.

In their words

How Skylight Balances Growth and Profit for Sustainable Success – Michael Segal & Mark Ungerer, Skylight

Play the episode

Mark Ungerer… in that relationship with the customer it's like, well, they got something for free. The user shows up and then they try to basically sell them on the value, give them a taste of all the features. But because of the dynamics we've been talking about here, which is like, Mom has been thinking for six months about this purchase. They've been on our website, and Reddit, and they're doing the YouTube reviews, they've made that decision to go all in.

Mark UngererAnd so, that instinct to say, well, you've got to convince them that it's worth 399 a month, and they're doing some calculation in their brain of what's the alternative to that is like yes, there are some customers who do that for sure, got a diverse customer base. The point there is most are actually not doing that once they've made that decision to buy. They just want to know that this is really valuable, they're going to be using it every day, it's meaningful for their family. And then I'll add a little trick. We don't actually in our product call out what is a premium plus feature if you are subscribed, which I think makes a pretty big difference as the person is thinking about when it's renewal time. And they're going, okay, well, I'm paid $79 a year right now for that.

Mark UngererWhat did our family get from these, and what was in the bundle and did I use this? If that's your intuition as a product person is like that's not I think what's normally happening. And we see renewal rates are pretty high, even across folks that heavily use the bundle and those that don't. But that's because what's common across all of those customers, the device is on, they're regularly using it and it's bringing a lot of value to their families overall. They want the full thing. And so, that's what we mean by not being too overly fixated, at least in a hardware business. I can imagine a non-hardware business, the relationship might be different and more tenuous to those free users than what it is to our free users, who actually paid $300 and have a physical thing on their kitchen counter they see every day.

David BarnardOne thing I was curious about, and I should've just done more research, but I think it might be an interesting topic if you have thought about it. Is there a software only experience, as you're building out all of these tools? And we'll get to the whole family OS concept later. But is there a software only experience where people can use some of these scheduling tools and other stuff, whether it's on a home...? We have an iMac that sits in the... …

Get tactics like this every Monday

New tactics from the week's founder interviews, each linked to where it was said.

More from this episode

Tags: renewal, premium-badges, merchandising