GTM Sauce

Practitioner pattern · Sara Grana (Yousician, Babbel)

Judge a new lifetime plan against what a subscriber pays over time

Tests otherwise wrongly crown lifetime, e.g. 250 vs 100 instead of 250 vs 300 euros

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What they did

When testing a new plan such as lifetime against a subscription, compare the lifetime price to the expected lifetime value of the subscription (e.g. 300 euros over its life, not the 100 euro first payment), because lifetime front-loads value and otherwise always wins.

In their words

Stop Celebrating Conversion Wins Before Checking Renewals – Sara Grana, Yousician

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David Barnard… I think what's really important and what you're hinting at is you got to know what you're sacrificing. You got to know as you push this number up, what number is going down and are you willing to make that trade? Because a lot of times, people aren't tracking those down funnel numbers and don't know the trade they're making. What are some of the specific examples you've seen of that kind of over optimization and how it does impact the long term?

Sara GranaIt happens also a lot when introducing new plans like when you didn't have a yearly description or when you didn't have the... I mean, lifetime is a huge example because the value that you get from the get-go, it's really high. And then every time time you do a test like lifetime versus something else, always the something else is going to lose because people are not looking at what is the LTV of that something else. If they would have bought a [inaudible 00:08:35] subscription, they are not bringing you the 100 euros, they are bringing you 300 euros, so don't compare it with 250 compare it to 300 and things like that. So I think every time there's a new plan, that always people please look at the lifetime value that this plan would have had. And then another thing that happened, I said before a lot like refunds and chargeback is something that people tend to forget about. So if you are introducing a new payment method and things like this, also, especially look at those methods, look what is happening there.

David BarnardAny other specific places you think people should be paying especially close attention to? I know paywall optimization is a huge thing and I've been frankly surprised at how big it moves folks have been able to see on the paywall. Over this past year, one of the really big paywall optimization things that people have been doing is having a toggle to enable the free trial. So by default, you don't have a free trial, you tap a button or slide a …

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Tags: lifetime-plan, ltv, plan-test