Mojo · B2C · social media video maker
Judge every paywall and price test on revenue per user in the first 7 days
Chosen to shorten payback and fund more ad spend; worked well per guest
What they did
What happened
In their words
How Mojo Increased ARPU 60% In Just Five Months – Michal Parizek, Mojo
David BarnardWhat was a key metric you were tracking during this? In setting up all these experiments, you're testing price, you're testing paywall layout, you're testing placements, do you have the monthly and annual? You're testing all these things. What was the unifying metric you were looking at to determine the success of those experiments?
Michal ParizekYeah, so our umbrella metric for all those monetization experiments was the average revenue per user in the first seven days. So this ARPU7D, 7 day, and yeah, we've intentionally used it because we, well, first of all we saw more potential in optimizing the new revenue rather than renewals, and just because that we wanted to shorten the payback period, we wanted to optimize the new revenue because of also supporting the user acquisition loop to allow higher spend, et cetera.
Michal ParizekSo we want to drive new revenue as we saw that we can actually scale that more, and we can actually compound that with the user acquisition and get more revenue in total. Yeah, so that's why we chose the early average revenue per user and specifically seven day because at that time we had three-day trial, so we wanted to have the window to be long enough to cover those three, four days. And I think it was just seven day. I think mainly because actually RevenueCat showed one of these ARPU pre-default is actually, that's actually maybe the first one is actually is what was available is seven day. So we choose ARPU seven day just I think because of that. And that actually, so they worked pretty well. Yeah, so basically we optimized for the new revenue, and as you probably know and everyone else in the app business, lots of new revenue is coming from the very early days, the very first few days. So it was a good metric for just tracking new revenue.
David BarnardDid you look back on some of those experiments and see the impact on retention? So did you knowingly sacrifice some long-term revenue for that quick return on ad spend?
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More from this episode
- Show only the yearly plan first; tuck monthly behind a 'view all plans' buttonYearly plan uptake up ~15-20 points; one of three tests behind a 60% ARPU lift
- Show the yearly plan as about $10 a month next to the $25 monthly planNew revenue +10% in the US and +30-40% in Brazil and Mexico
- Price below the US-equivalent in Brazil and Mexico instead of just converting currencyLower prices won; part of the 60% ARPU lift, no separate number
- Check 7-day cancellations before keeping a higher price that won on early revenueRejected a winning higher price after a yearlong model showed lost long-term revenue
- Retest each winning paywall in every key market before rolling it outSeveral winners shipped only in some markets; ARPU of new cohorts kept rising
- Use a long scrolling paywall with reviews and a free vs pro comparison in JapanNew revenue +20% in Japan; failed in the US, where a clean video paywall won
- Show free users a paywall when they open the app, at most once a week~15% of new revenue from existing users; no complaints in reviews or support
- Keep lots of features and content free on purposeOnly ~50% of payers convert on day one vs ~80% industry-wide
- Run separate paywall tests at once in US, Europe and Latin America every week or twoSignificant results in 1-2 weeks per bucket; enabled the 60% ARPU lift in five months
Tags: arpu-7d, north-star-metric, payback