GTM Sauce

Tinder · B2C · dating app

Price the 7-day feature pass the same as a 7-day subscription, shown side by side

Less cannibalization and more revenue, but still not good enough

Mixedpricingpaywallupsell-expansion

What they did

Raised the a la carte Passport price again so the 7-day Passport costs the same as a 7-day Plus subscription (which includes Passport and more), and added an upsell on the paywall showing both: 'you can buy Passport, standalone a la carte, but also you can buy Plus subscription'. The subscription becomes the obvious better deal.

What happened

Reduced cannibalization and increased conversion revenue, but 'still not good enough', leading to t5

In their words

Dynamic Paywalls That Drove Millions in New Revenue – Shawn Gong, Tinder

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Shawn Gong… we price too low, it's too affordable and then so it's like no-brainer, so user use it. The second thing we do is like, oh, we should increase the price for a la carte and to see how that will change the conversion and then subscription cannibalization. So we definitely noticed that the subscription cannibalization reduced as we expected, and then the conversion reduced a little bit, but total revenue actually went up. So that was very positive.

Shawn GongAnd then we continue to test because we wanted to minimize the subscription cannibalizations. And then we increase the price again and then also have upsell on the paywall. Basically we show, hey, David, you can buy Passport, standalone a la carte, but also you can buy Plus subscription. And then we use a very interesting kind of psychology thing. Basically for our seven-day Passport feature a la carte, the price is the same as seven day Plus subscription.

Shawn GongSo that case, David, you think like, oh, duh, then the seven-day plus subscription is a better deal. I can get it more than this feature. So that also helped. Of course, it means reduce the cannibalization, also increase the conversion revenue, but it's still not good enough. So we decide, hey, let's use our perfect ML model again, so we will show users subscription first. If you don't want to buy subscription, we show you a la carte, so we'll give you a second chance.

David BarnardI love hearing these kind of stories because I just think Tinder's been around so long and so many of us in the industry look up to it as a pioneer in monetization in apps, and I just think so many apps are leaving money on the table by not experimenting with these kind of things and not trying all the different... Three tiers. And like we said, it can lead to confusion. It's not the right thing for every app, but there's just so much opportunity …

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Tags: a-la-carte, price-anchoring, decoy-pricing, cannibalization