Lose It! · B2C · calorie tracking app
Spend big on paid ads to stop relying on organic users
~10% predicted ROAS at scale; money burned and the push was dropped
Failedpaid-socialanalytics-attribution
What they did
2019's big strategic initiative was to grow beyond organic users with a big paid acquisition budget targeting cold audiences. ROAS was projected with curves fitted to each cohort's first 10 days, which predict eventual LTV well for their user base. Many users came in but stayed free.
What happened
ROAS as low as ~10% when scaling (predicted); cohorts probably at 0.3-0.4 after five years. Company stayed cash-flow positive thanks to organic users, but paid was 'setting money on fire'. Paid is now a very small part of the mix.
- Stage
- Profitable, mostly organic freemium app
- Effort
- Big budget; the year's main strategic initiative (2019)
In their words
Sub Club by RevenueCat · Achieving Mission & Profit with Freemium — Erin Webster-Shaller and Paul Apollo, Lose It!“We went big with a big budget on paid acquisition, and it was basically impossible to make the economics work out. Obviously, we were still cash-flow positive, because the organic base was subsidizing these folks, but economically, it was just setting money on fire.”
“And that's tough when you are going after cold audiences with a freemium app, cuz we actually generated a fair number of users. They were just free. We weren't monetizing them.”
“So what we were doing is trying to create ROAS curves, which our user base is actually pretty predictable, and if we apply curves to the first 10 days, we get to within a pretty good confidence where your eventual LTV is going to end up.”
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More from Lose It!
All 24 Lose It! tactics- Retest higher prices you once rejected; double the yearly price if it breaks evenTest broke even for the first time; rollout matched tests and gives room for paid ads
- Build in-app sales timed to each user's journey, with deeper discounts off a higher priceHigher base allows 25-75% discounts to more users; no conversion numbers
- Keep the free version good enough to reach the goal without payingRetention very stable after doubling the price, per guest
- Raise the price only for new users; keep current subscribers on their old priceAvoided an untestable churn risk; no numbers on the effect
- Add ads to the free app, one-off purchases, and affiliate partner deals
More from this episode
- Lose It!: Ask more questions in onboarding, even ones you don't use, to lift trial startsTrial starts up double digits; free-user retention also improved
- Lose It!: Let people set up premium features in onboarding, then show what they'd loseUsers who opt into the calorie-cycling feature convert more; no exact numbers
- Lose It!: Ask new users to set a carb goal during onboardingLost badly in A/B test; many premium setup steps clogged the flow
- Lose It!: Lock all macro-tracking features behind premium as a testEarned little extra money and made users angry
- Lose It!: Keep basic calorie counting free; put macros, keto and fasting in premiumPremium grew to 40+ features; carbs and device syncing drive most upgrades
- Lose It!: Talk about how much people save, not about features, in upgrade messagesDiscount messages beat feature messages in tests; no numbers
- Lose It!: Charge about half what rivals charge, since you don't need ads to pay backPrice set by testing on organic users; about half of the main rival's price
- Lose It!: Market the free app through app store search and word of mouth, not ads50M+ users over 15 years, mostly organic
- Lose It!: Email users when they hit weight-loss milestones and ask for their storyStories feed social, email and in-app marketing; impact not measured
- Lose It!: Give users a $10 gift card when a friend they refer upgrades to premiumRoughly broke even but didn't scale; exposed users had lower LTV; killed after a year
- Lose It!: Offer steeper and steeper discounts to free users who haven't paid after 30 daysTurns cohorts that almost never convert into some revenue; no numbers
- Lose It!: Offer a deep premium discount to users on a 30-day logging streakA/B test win; big efficiency gain on a small group
- Lose It!: Show sale offers as in-app messages instead of sending email blasts10x more money for the same offer
- Lose It!: Show upgrade messages after people finish logging, never in the middleMid-task messages caused drop-off and fewer upgrades; after-task messages did better
- Lose It!: Aim in-app sales at new and returning users, with a warm 'welcome back'These users are half of bookings; first-time sales do really well
- Lose It!: Pin a 24-hour sale countdown to the top of the main screenKept the sale visible after people closed the pop-up; no numbers
- Lose It!: Try network ads inside a free app that earns from subscriptionsNot much money and a pain to manage; not worth it for a small team
- Lose It!: Pay staff bonuses only if both revenue and user weight-loss goals are met