Headspace · meditation and mental health app
Raise monthly from $9.99 to $12.99 and cut annual from $99 to $69.99
More total revenue and higher conversion on both plans; more users chose annual
Workedpricingexperimentation
What they did
After a consultant's qualitative price research (summer 2017), ran multi-variant price tests roughly every six months across iOS and Android and many markets (US, UK, Canada, Australia, Europe, Asia). The first test needed over a month to gather data; later ones ran faster as volume grew. Annual tested at $49, $59, $69, $79, $89, $99; $69.99 won on conversion and first renewal and sat near competitors. Monthly raised to $12.99 to make annual look better; the lifetime plan was dropped. Would narrow to top markets if doing it again.
What happened
Won on both rollout criteria, overall revenue and conversion rate across both products, and skewed the mix toward annual. Rolled out by end of 2019.
- Stage
- scale
- Effort
- Tests every ~6 months for about 2 years across many markets
This shipped together with other changes, so the result can't be credited to this alone.
In their words
Sub Club by RevenueCat · How Headspace Optimized Revenue by Gating Content — Shreya Oswal and Keya Patel, Headspace“So some of the learnings were essentially what we were doing is price testing almost every six months or so and running a test with multiple different variations.”
“Our monthly product moved from $9.99 to $12.99, and our annual product dropped from that about $99 price point to $69.99.”
“The first was ultimately getting more overall revenue, which was one of our biggest benchmarks there, and an increase in our conversion rate across both of those products. And in both of those situations, it did win out.”
Related topics
Get tactics like this every Monday
New tactics from the week's founder interviews, each linked to where it was said.
More from Headspace
All 22 Headspace tactics- Email free users a small discount, then raise it every few days until they upgradeSaw some good results, consultant says; no numbers
- Ask why people joined, then remind them of it laterQuite effective at reinforcing the habit, consultant says; no numbers
- Bundle the news subscription with Headspace for readers overwhelmed by newsGuest cites business results but warns partnerships are very hard
- Email lapsed subscribers 40% off if they come back within 7 days
- Ask the user's main goal and show different content for each
- Add new uses, like sleep and exercise, so users don't outgrow the appConsultant calls it smart; no numbers
More from this episode
- Headspace: Lock 90-99% of the free library, keeping 1-2 favorites free per categoryMuch higher free-to-paid conversion; far fewer complaints than feared
- Headspace: Lock the whole content library behind a free trial, for new and old usersHigh double-digit lift in paid subscribers; trial users engaged more than free users
- Headspace: Let anyone share a 30-60 second clip of any meditation with a friend
- Headspace: Show the yearly plan's per-month cost, with a cartoon character pointing at itHelped shift sign-ups toward annual alongside the price change; no separate numbers
- Headspace: Test 8 lower monthly prices to pull in less committed usersLost revenue: more people chose monthly without enough extra conversions; not rolled out
- Headspace: Label the yearly plan 'best value' instead of showing the dollars savedThe simple 'best value' label beat showing the dollar savings
- Headspace: Push the yearly plan hardest on the paywall, keeping monthly as an optionMore picked annual, but fewer paid after the trial; went back to equal plans
- Headspace: Add a free trial: 7 days on monthly, 14 days on yearlyDouble-digit conversion lift; rolled out end of 2019
- LinkedIn: Open free trials to everyone and let users pick their own planCalled a big win for revenue and for users picking the right plan; no numbers
- Headspace: Offer a student discount plan, then open it in the 7-10 countries asking mostSmall but positive revenue at first; international launch 'done really well'
- Headspace: Add a family plan so members keep each other using the appBest retention of any plan, monthly and annual; brought in new users and raised ARPU
- Headspace: Let new users pick several reasons they came, not just oneSignificant lift: fewer drop-offs at that question and more trial starts
- Headspace: Test a 10-15 screen onboarding against a 3-4 screen one straight to the upsellLong raised week-1 use but cut conversions; short converted but felt off-mission; settled in middle
- Headspace: Promise a prize for sticking with it the first month, with on-track reminders
- Headspace: Give referred friends a 30-day free trial instead of 14, with no cash rewardHigh trial redemption and good conversion from referred friends; no numbers
- Headspace: Reward the top referrers with a 1:1 session with their favorite teacher