December 15, 2022
38 min read
We’ve launched a podcast about mobile app business: monetization, subscriptions, marketing, trends, and more. We invite extraordinary guests with deep experience in marketing, user acquisition and mobile subscriptions.
The episode is already available on all popular platforms (in Russian).
The transcript in English is below (translated with Google Translate).
Vitaly Davydov: Hello everyone, I’m Vitalik Davydov.
Nikita Maidanov: Hello, hello, I’m Nikita Maidanov.
Vitaly Davydov: We are launching a new podcast on mobile subscriptions called SubHub. We’ll be covering everything related to mobile subscriptions, monetization, and inviting distinguished guests to hear their stories of the growth of their mobile apps. The podcast is powered by Adapty. We make this service for analytics and growth of mobile apps with subscriptions. With Adapty, developers completely cover the technical issue of connecting subscriptions in hours, not months, and marketers increase subscription revenue through AB tests, paywalls, and personalization.
Nikita Maidanov: In the meantime, we are starting our first podcast release. And today our first guest is with us. Greetings – Sergey Maslov – growth manager at Prisma Labs. Hello.
Sergey Maslov: Hello everyone.
Vitaly Davydov: Hello.
Nikita Maidanov: Sergei, tell us a little about yourself, what you do.
Sergey Maslov: At the moment I work as a growth manager at Prisma Labs. We have two applications – Lensa and Prisma, which were quite famous at the time. And every day I am engaged in improving our funnels, optimizing them to attract customers and increase the subscriber base.
Nikita Maidanov: Let’s give some context. Prisma and Lensa are both photo editing apps? There is freemium, the ability to edit a certain amount for free, as you said.
Sergey Maslov: Yes, that’s right. They are now built a little differently. Prisma just has a certain set of paid styles, most of them are free. And there are paid styles that come with a subscription only. Everything is free in Lensa, but there is a limit on the number of photos you can edit.
Nikita Maidanov: As a product manager, my first question is funnel optimization – is it growth hacking or product management?
Sergey Maslov: I would say that this is something in between a product and marketing, it is work at the intersection of product and marketing, and, of course, half of that, half of that.
Nikita Maidanov: And your tasks consist of optimizing the funnel at all stages? Or maybe there is something else?
Sergey Maslov: The main task is to optimize the funnel from attracting a user to the moment when he becomes a subscriber. But it is clear, of course, that we work very closely with the product, and with the guys from the product. And, of course, we keep track of all product metrics, because there are times when you can increase the conversion to a subscription, but lose product metrics, which is bad. And balance is needed.
Vitaly Davydov: Why is it bad?
Sergey Maslov: Because despite the fact that we want to grow our subscriber base and, of course, grow the LTV of all users, we want our product to remain popular as well, and we give the opportunity to process our photos for free. It is important for us that those users who are not ready to pay also stay with us.
Nikita Maidanov: And tell us about the funnel, what it looks like, what are the stages?
Sergey Maslov: It all starts with marketing. I’ll try simply, not in classic marketing super terms. How many times have we shown certain banners to a certain audience, then what is called CTR, how many users have clicked on these banners, just clicked, clicked. And then, of course, how your page in the Store converts. That is, how many of those who followed the banner clicked on “Download application”.
This is where marketing ends, and the grocery part begins. How do your users go onboarding, how long your onboarding is, how much falls off at each stage and how much it takes to sign up for a subscription or trial. And, of course, an important metric is how many users in our case add a photo. Every step can be improved and optimized.
Nikita Maidanov: And what about the conversion from trial to subscription? Do you have a trial?
Sergey Maslov: We have a trial. While there is, we are thinking about how we can get rid of it, get rid of it, but at the moment there is. And conversion from trial to subscription, of course, is also an important point. Unfortunately, there are no cases or actions how to effectively influence this. It seems that the quality of the product works here, that is, to what extent the user who took the trial will be satisfied with the quality of the product that he received.
Nikita Maidanov: Why do you want to get rid of the trial, just because of the conversion or why?
Sergey Maslov: No, from the marketing point of view, it is quite effective to buy using CPA, which in this case is a trial. This is probably the standard for subscriptions in marketing at the moment. We just see a pattern that users who buy subscriptions themselves, that is, without a trial, have much better retention. And we want more such users, so we are looking for a way to convert a user into a subscription, bypassing the trial.
I am not saying that we will come to this or launch it. Just one of the directions that I want to do is the conscious purchase of a subscription by the user, because he really liked the product.
Vitaly Davydov: Let’s say we take the latest version of iOS with all the changes in IDFA and so on, everything is as it is now. Let’s take two applications that are similar in topic. One is really cool product development, while the other has only the first five screens well developed. And both use trials. Will there be a difference in conversions and why?
Sergey Maslov: This is a very good question. This is probably the basis of our activity. I think there will be, I don’t even think, I’m sure that there will and will be a big difference, of course, and it will be much more efficient to convert the one who has worked out even five screens, but for these five screens he already well involves the user in the application … He’s probably already either involved the user in the application, or made such a promise to the user for which he is willing to pay. Therefore, of course, well-developed onboarding, well-developed all conversion stages will convert better.
In my opinion, most users are irrational. And the purchases they make are what is called irrational behavior. That is, the point is that you were promised something on onboarding or told about the product. You believed and you are ready to invest in it. In my opinion, it all really depends on the behavioral factors of users, and most of them do irrational actions.
Vitaly Davydov: What will happen then next? Trackers are a good example, I think. Let’s take trackers of any activity. There is usually one dominant application in its industry and several million clones approximately. It would seem that clones often work on onboarding. And it would seem that they should have higher conversion rates, but why don’t they take the lead?
Sergey Maslov: And here, I think, the story about the value of the product is just starting to work. When you pay for a product and when you don’t have enough value you get from it, you start quitting. It is quite normal that the user believed in the promise that was sold to him on onboarding, but then, when he plunged into the product, it turned out that the promise that was there was not true. And here comes the moment of disappointment and the user says, “Okay, goodbye. You promised one thing, you do another. It is not good”.
But let’s also discuss such a moment that there are really a lot of applications. And in the same niche there may indeed be even several popular applications and a bunch of some simple clones. It’s probably worth saying that they have different mechanics. Most likely, the big guys want users to be with him for a long time, then the task of small clones is to make money here quickly and now, therefore, a slightly different approach. And at the same time, some achieve their task, keep users for a long time, while others try to make money quickly. But this is my opinion that such a situation is possible.
Your onboarding promise needs to be consistent with this product you give next. Another point is that even if your user has converted into a subscription, you can’t stop and you need to develop the product further so that the value of the subscription for which he paid increases all the time.
Vitaly Davydov: This is an interesting question here. Let’s say you have an application where it is difficult to generate infinite content. If we take Headspace or Calm (applications for meditation – ed.), Then literally every two or three days there is a new thing, new content. I always realize that I pay for both Spotify and the same Headspace, and I have a lot of this content all the time.
But what if I am making an application where it is almost impossible to create this content anymore. I really got into a logical dead end. Or the creation of this content does not add value to the user. What to do in this case?
Sergey Maslov: This is not a matter of content. Maybe if there are content applications, then it seems that you can develop endlessly. I’ll put it this way: hire a good product manager who starts generating good content , or think strategically where you can grow. Perhaps some cases are on the side. But in general, of course, there is such a thing. And this is probably a question of some utilities. You have one specific user pain. For example, VPN services have solved a specific problem, the user has gained access to where he needs, or they feel safe.
And then it really seems that you won’t give him anything more. I don’t know, there is no clear answer. Either try to develop something from the side, or come to terms with the fact that he closes his problem, closes it with you and will come to you to close it for a long time. It seems that perhaps it is not always necessary. In the case of content, I agree with you, content needs to be generated constantly. In the case of a service that directly solves a specific problem and covers the user’s pain, this is probably not very relevant. And if a content application that quickly ran out of content and has nothing to do, then you probably can’t think of anything special.
Vitaly Davydov: Here you can take as an example a little similar to you – this is Snapchat in some form, Snapchat, however, does not have a subscription, but they constantly generate new content in the form of new filters. Even Instagram!
Sergey Maslov: Yes, it’s true. I think that their main metric is what is called time spent. And therefore, of course, they need to generate and generate new features non-stop so that users stay with them, stick and come back as much as possible. And spent as much time as possible, so yes. In this approach, of course, what they do, I think, coincides with the growth of their metrics.
Sergey Maslov: I wanted to step back a little more, just talk about applications in categories where there are mastodons and a bunch of other stories. I wanted to make a remark, especially, it seems to me, it concerns the sale of trials. There is a feeling that most of the users who take trials naturally know how to cancel them. And it seems to me that in the same category, they start jumping between applications. In one application, they took a trial for a month, used it, ended up, they went and downloaded the following. Here, probably, a large number of applications with similar functionality gives rise to such hoppers who jump between applications and use different ones while the trial is in effect.
Nikita Maidanov: Have you noticed a change? Maybe in recent years there have been more people who cancel the trial right away? Do people somehow learn to do this kind of hopping?
Sergey Maslov: I can say that there is definitely a tremendous difference in the cancellation of trials, probably, and for all sorts of problems in the form of billing issues in different countries. In Russia, I can say that 70% of users, most likely, will fly away from the trial somewhere: either to the cancellation or to the billing issue. I think after the release of iOS 13, there was a difference in the increase in undo.
Nikita Maidanov: For those who do not know, there was a change, when you delete the application, an alert appears about the cancellation of the trial. Are you talking about it?
Sergey Maslov: Yes. To be honest, I think this is a good change. It could have affected some large grocery companies, but in general, at that time, what was happening in the Store was a bacchanalia. The number of small applications that didn’t even have anything inside, the functionality they promised, started to scale down, so this is a good change.
Vitaly Davydov: Do you say good things from the user’s point of view or from the point of view of a person who works in a tier-one service?
Sergey Maslov: Of course, from the user’s point of view. It’s completely honest here, it’s from the user’s point of view. For us, I cannot say that it was a very strong or painful introduction. We haven’t noticed any major changes.
Vitaly Davydov: It just seems to me that just big, cool players can benefit from this, because in clones and in weak applications people will cancel the trial and look for alternative applications of higher quality. And even the auction, in theory, could be cheaper. I don’t know if this is so or not.
Sergey Maslov: I can’t say. Nothing was particularly noticeable, and we did not do any research on this topic. Auctions, if you mean Facebook advertising, are always so unstable and so seasonal that, of course, you don’t really notice anything much. But I think that here the consequences could come later. That is, they not only influenced the trial, they could also affect the renewal of subscriptions.
Prior to iOS 13, I think there was a large chunk of the subscription base for different apps that continued to renew after the user uninstalled the app.
Sergey Maslov: It depends on the length of the subscription, who has what: monthly, annual. And everyone could notice the consequences a little later. But we did not experience any cardinal changes, perhaps, there was no growth for this reason, but we did not notice any cardinal falls.
Nikita Maidanov: We discussed that there are categories where there are many popular applications, and this category included photo editors before the advent of Prisma and Lensa. There were VSCO and other popular filter editors. How do you get into a category and humiliate it and become popular? Tell us about the Prisma case.
Sergey Maslov: There are always categories. And VSCOs are not what they were, they are. And PicsArt. These are really big, super popular apps. It is probably worth saying here that the Prisma case was such that it just blew up the market and took off quite virally, virally, because it gave some new mechanics that everyone just liked and went in. As far as Lensa is concerned, it was, of course, the idea of the current CEO of Prisma Labs, and it was not born quickly enough. Based on data from Prisma, based on analytics and so on. He had this story.
It’s worth mentioning here that Lensa is a photo editor more about selfies and portraits, and has a couple of features in the form of beautiful, cool retouching. And the thrill is that there is one button to make it beautiful, it is called Magic correction. It’s just a slightly different product than everyone else. Yes, this is a niche for photography and video, but this is a product with its own small niche.
It is important here that you can make any product in the category of photo and video, and in any other, but if you do something better than others, or a little differently, then I think that you will always find their users. Therefore, there is a specific use case that Lensa covers – this is a good, high-quality retouching of portrait photos. And for a large number of users, this is one-click retouching, so you can always take your own piece of the market.
Nikita Maidanov: Is it a challenge to explain to users who do not know about the application how it differs from all analogues?
Sergey Maslov: Moreover, this is a rather difficult story. And here, probably, the whole team is already working, which is involved, starting from the product, which, together with marketing, develops some kind of strategy, and ending with the product funnel itself, explaining what you can do, how you can do it in the application. Yes, this is not an easy task, and of course the whole company is working on it. In our country, it is probably not yet completed at the current stage.
Nikita Maidanov: Do you have a Lensa subscription for unlimited photo editing?
Sergey Maslov: Yes.
Nikita Maidanov: How did you sign up for the subscription? Why don’t you sell photo packs? Why Subscription?
Sergey Maslov: It is probably worth talking about what methods of monetization are there, but we will not touch on this. I will say that, in my opinion, over the past few years, the approach between users of the service and how the service is mounted has changed a lot. And it seems to me that a rather private model of relationships is just a subscription. Let’s explain why.
If we assume that the service is of sufficient quality, it develops and is constantly updated, increasing the value of the subscription for which the user pays. In doing so, the user receives these updates. Let’s rewind a little, ten years ago, when a new version of the software was released every year. And it could be the same office, about games – that’s another story. And in fact, every year you went and bought a new version, because after a while the old version did not fit anymore. Everyone had a new one, you had an old one. And you had to switch to be compatible. This is how offices worked, as well as graphic editors, and so on.
Now there is a shift towards the fact that you do not buy updates every year, but simply pay for a subscription and receive these updates. Therefore, from the point of view of the relationship between the user as a client and a service, it seems to me that this is a fairly honest model.
Vitaly Davydov: I just thought about a cool thing about which you said that in fact we can treat subscription products as rent. In fact, you are renting the product for a while, de facto.
Sergey Maslov: Yes, I agree. You can always cancel it.
Vitaly Davydov: It’s like leasing a car.
Sergey Maslov: Yes.
Nikita Maidanov: You didn’t have a question whether to subscribe or not when you launched a new product? That is, it was decided right away that it was a subscription?
Sergey Maslov: Yes. We really feel that this is a fairly honest relationship model because we are committed to delivering, updating and improving the product.
Nikita Maidanov: But the decision “we make a subscription” entails many questions about the period, prices, trials. Then you somehow decided where to start? How did you start? Then, of course, you probably did experiments.
Sergei Maslov: Yes, of course, this is always a difficult question. And here, probably, there are no recipes for “go do it”, there are some standard approaches, I think, that are used by everyone. At the very least, you go and look at the prices of competitors in the niche. And you try to understand why this is, or why someone is more expensive, someone is cheaper. Plus, when we launched Lensa, we already had some data on Prisma, so it was pretty clear where to go. And then, of course, everything is trying to look and look.
Vitaly Davydov: Let’s imagine, I’m launching a new photo editor tomorrow. With filters. And I was like, “Damn, I have to choose, I’ll also subscribe, but I can also choose inaps, in the sense of a lifetime subscription, non-consumable. I can choose a year, I can choose a trial, not a trial. ” Give just a couple of tips, how would you do, where to look, on the Big Mac index or what?
Sergey Maslov: Everyone loves the Big Mac index, it’s about prices. Do you mean how to choose prices or how to set up a set of subscriptions?
Vitaly Davydov: First, how to understand how many proposals I have to give. Secondly, what should be the prices, what should be the periods. Where do I begin. I made a product, I know how to make cool filters, the coolest in the world. How much to sell?
Sergey Maslov: I would do as follows. After all, perhaps the main part of attracting an audience will be with marketing. Most likely, you are planning to launch marketing, so you can try launching without a subscription and see what your install prices will be on creatives. Then just build the simplest model, laying down certain conversions, take an annual subscription, a monthly one with such and such a price. And you can lay down basic conversions, which, it seems to me, are even in your reports in Adapty, you can view and lay down these conversions. And choose the price tag that will pay off for you, or rather give a return on traffic with these conversions.
As for the periods – a difficult question, because, of course, I want the subscription period to be associated with the value that you bring to the user, or the question of the goals that you pursue. If you want users to stay for a long time, then they are alone, if you want to make money quickly, then this is probably not a very good option for you – weekly subscriptions for $ 10.
It seems that after all, the subscription period should correspond to the functionality that the application provides. If dating, they can sell and bias for six months. Perhaps, hypothetically, the user lives with them for six months. And they believe that in six months he will definitely find a match for himself and will no longer return to the dating application. But such a thing cannot always be found.
Nikita Maidanov: You said that Prisma helped you, at least in terms of subscription data, in order to launch Lensa and choose periods and prices. And what else does the existence of such a successful successful one help with creating a new product?
Sergey Maslov: The main thing, after all, is a certain source of data already accumulated, and the presence of some cases. Thanks to Prisma, we already know what can and won’t work. Although this does not always carry over from product to product. After all, they are really different things, because pictures from Prisma were willingly shared on Instagram and in some other social networks, then with Lensa it is already a little different.
Nikita Maidanov: Are they not sharing or is more being done on avatars?
Sergey Maslov: Yes, it’s no longer to lay out and show: look how cool and tell where. This is exactly about making a good photo for specific purposes.
Nikita Maidanov: Why did you decide to make a separate application? Is there such a big difference in the use case? Why didn’t you build this function in Prisma.
Sergey Maslov: This is probably more a question for our CEO. But still, of course, very different functionality and very different use cases.
Nikita Maidanov: Would it be more difficult for you to change your mind about an application than to create another application with a different focus from the outset? Not opinion, but how people perceive.
Sergey Maslov: I think so. Here again the question arises of attracting what you show, what you tell in creatives. Because if you promise bright dramatic changes, then you have to give it. Otherwise Prisma could have turned into a superapp ..
Nikita Maidanov: Superphoto app.
Sergey Maslov: I don’t know if there are any cool superappa cases besides Yandex.Go. But it seems that it is problematic.
Vitaly Davydov: I think Yandex.Go is awesome, I don’t use anything else if I need to buy food or go somewhere.
Sergey Maslov: Okay, I just mean that I don’t know how it is now, but at first it was hard enough to use it, and my brain went crazy. There are some nuances from a food point of view that continue to enrage for now, but overall, this is probably a very good example of a superappa.
Vitaly Davydov: Have you noticed – different use cases, of course, but all the same – maybe there is a cannibalistic effect that users flow from Prisma to Lensa and vice versa somehow eat away the audience of another application?
Sergey Maslov: Probably not, I can even say that some kind of cross-promo between Prisma and Lensa doesn’t even work very well. There, the percentage of audience overlap is quite small. The requests are really different.
Vitaly Davydov: Have you tried such a thing as subscription bundles, that is, you take a subscription for two applications at once?
Sergey Maslov: We think about it, there are such thoughts. I think that someday we will try.
Vitaly Davydov: We just see among our clients those who make great applications. For example, from a pregnancy tracker to an application for interaction with a small child, and a few more in the middle. And we see that the option when they sell one subscription that syncs everywhere and works everywhere is a cool topic, that is, it greatly increases retention and people really live for years. Interesting topic.
Sergey Maslov: Yes, interesting. We want to try this story. We also have a story about family sharing subscriptions, we also want to try. I do not know if it will work out in the near future, but in general, yes, we will try.
Vitaly Davydov: Interestingly, there is no native functionality to do this. Maybe I don’t know about it, but there is no support from Apple or Google for native synchronization of subscriptions, multi-subscription between different applications. There is no such thing, you have to do it by hand.
Sergei Maslov: Yes, yes, yes, including just such a complexity that stops us. We do not have something related to authorization everywhere now, so for now, in any case, it stops us. Even the same family sharing sounds simple? you can turn on the checkbox, and it seems that suddenly everything will work, but in reality it will not. And it is quite difficult to implement it efficiently. And testing is another task.
Nikita Maidanov: Tell us what you think about the current market of mobile applications, about the trends where it is going. Your opinion as an active participant in the market.
Sergey Maslov: The market is growing. more and more applications appear, the appearance close to scammers is a little unhappy, but it seems that all this is going away, and there will be less and less such things.
Nikita Maidanov: Do you also have a feeling that all the changes that Apple is making are aimed at ensuring that better applications remain?
Sergey Maslov: Yes, it seems so. I hope so. Of course, sometimes it also becomes difficult to cope with something, with changes in guides and everything else, but it should get better, and applications should become better quality. And, of course, if not very good applications leave, then, in theory, this is our opportunity, that is, those companies whose product is good, meets all standards, should receive an influx of audience.
But at the same time, again, I like that in fact all parties give the opportunity to any developer to take and download their application and show it to the world. This is cool, I think, what Apple and Google give us. But one thing is worth saying. Of course, if you just download the application, there are no chances that a sufficiently large number of users will find out about it, therefore, of course, you need to somehow invest in marketing and promotion, optimization at least to make it all work out. But this is a remark.
Nikita Maidanov: Did you feel the changes in IDFA? Have you already felt the difference?
Sergey Maslov: If I’m wrong, you, Vitalik, laid out a graph of how people update on iOS. And it is clear that since the end of May, the beginning of June, the updates have gone quite strongly. The feeling that Apple was doing it with some kind of batch.
Yes, we see attribution problems begin. The amount of quality attributed traffic is, of course, changing. We hope that everything will be fine, and in terms of the fact that it will be enough to make an assessment of the overall traffic. It seems to us that it will be quite possible to live with this. And, of course, Facebook companies are moving en masse to a new kind of company.
Vitaly Davydov: On SCAD?
Sergey Maslov: Yes. Of course, these are all the limitations that they have: the number of companies that you cannot see now statistics on creatives, of course, it seems that it will get worse, but in general it is not very critical so far. You lose what you are used to, I will say this, and it scares a little. But it seems that all this should settle down and eventually return to normal. We hope that Facebook’s algorithms are still much smarter than we are in terms of buying traffic and selecting a relevant audience.
Nikita Maidanov: Have you tried Apple Search Ads?
Sergey Maslov: We tried it. We are not even what we tried, we use it quite regularly and buy it. But there is no such volume there anyway that Facebook gives you, and the indicators are quite mediocre. It is necessary to select very well, to optimize it for it to work effectively. Take and launch unlimited rates for a photoeditor request, pour yourself a lot of traffic – yes, but it is unlikely to pour it yourself efficiently. They also had small changes, the issue was changed and new places of display were changed.
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