It’s Not So Complicated: Subscription Monetization with Eugene Strelets

Spyros Tsoukalas: Welcome everyone. It’s another episode from the Growth Mentor Podcast. And I’m excited to host Eugene Strelets from Warsaw, who is a Growth Product Manager at Loona. Welcome, Eugene.

Eugene Strelets: Thank you. Nice to meet you.

Spyros Tsoukalas: I’m excited to talk to you about Subscription Monetization. It’s, I think, a very interesting topic for 2023, SaaS, businesses are everywhere. So, let’s start digging. Could you tell us something we don’t know about subscription businesses and monetization?

Eugene Strelets: So basically, if we speak about like subscription memorization right now, like almost every mobile app, like uses, like as a primary model from the very users, and if you see, read some, like, you know, articles from Sensor Tower, and apparently you see that like, every year, so high growth for subscription apps, so basically, it’s a hot trend right now in the market. Besides that, a lot of products and companies right now also sell their subscriptions through their web services, like Stripe, and others, like PayPal. So, basically, it’s quite popular right now to grow you’re and build your sustain, build a sustainable business through subscription monetization. And, you know, a lot of tools and companies provide what’s formation, while that how to grow faster through some tips and tricks. So basically, huge industry right now. So, with their own, like conferences, you know, with their own articles, reports, and research.

Spyros Tsoukalas: So, before we dive into this space, I would say, first things first, let’s define what is included within the term, like people who are dealing with subscription monetization. What is under this umbrella? Could you explain what you’re dealing with?

Eugene Strelets: So basically, you know, previously time it was so popular to sell your products, especially in the digital way by just one pay a one-time payment. So you will just pay one time and have access to the product for you know, for all time. But this business model has some limitations. And especially when the cost of acquiring users becomes more expensive every year, it’s harder to know to breathe and acquire new users. So basically, this new approach, like a subscription business model, provide recurring payments for your business. Basically, users can pay for your product, on a monthly basis, yearly basis, or quarterly basis. And it’s allowed you to grow your business faster. What’s the value for the users? So basically, just by subscription, he got like, or she got like, updated content, new features every month, every year. So basically, it’s also a lot of value for them. And a lot of some amazing features like family subscriptions, or additional subscriptions, which are bundle subscriptions, where you can have access to different apps in one subscription. So it’s a lot of value for both sides like product companies, which make subscription business, and for users who like to try to use and solve their problem by using different products.

Spyros Tsoukalas: So, there are many professionals involved in such businesses either SaaS-like or subscription-based monetization that is around the internet. So what do you see going wrong with this failure, like people who are working and trying to improve their businesses or the startups like, what do they do wrong?

Eugene Strelets: So basically, it’s like several stuff. I think the first one, you should have a good infrastructure for analytics, and tracking your subscription billing subscription information. So, just when you just start your business subscription, you should be like your basic for tracking and analytics. So but right now, we have a lot of tools like revenue, CaT amplitude, or some of your custom solutions that can easily build it from scratch and analyze and track your other data about users and subscriptions. So basically, the first half just trying to do the oldest like basic stuff for analytics. The second one, which I see on the market right now. If you want to grow your subscription business so fast, you should, every time every day set up a new experiment in trying to test different types of paywalls onboarding students first user activation. If you do that, you can grow your business faster if you experiment more. So basically, almost for all businesses, but for subscriptions when there’s competition so high, you should like every time you should make more valuable experiments for users, and try to grow faster than your competitors. Because you know, auctions on Facebook, on Google, they’re super competitive. And you should have a really high LTV to be competitive in the market. So basically, it’s the second one. And one, I think, analyze the trends and make a lot of market research. As you know, every week, we have like-new hot apps on the App Store and Google Play, try to analyze what makes them successful. Speak with known founders and people in the community. And due to that, you can learn a lot of stuff.

Spyros Tsoukalas: So, let’s imagine that I am a young founder or a young growth product manager. And when I hear about subscription monetization, the first thing that I think of is acquisition. But I think that your everyday life and your activities include so much more, so much so many other aspects of using the existing customer base or other ways to increase the revenue of the company. So good. Could you explain what else you do on top of acquisition?

Eugene Strelets: Okay, I got this great question. We can this process like a funnel, because yeah, you arise it like, first tap its acquisition, when you run ads on Facebook, Google, Tik Tok, something like that, or just use some oral viral marketing like word of mouth or something like that. So basically, you can find the right message for your audience, and test a lot of messages, try to find which will correlate with your product. The second step, when the user comes to your problem, the download, for example, an app from the App Store, it’s a first-time user experience. And a lot of apps have this personalized onboarding experience. When you have like a quiz when you choose your goal and the app tried to customize your experience inside the app. So basically, it’s a big part of the work when I run a lot of A/B tests across onboarding experience. So it’s like 10-20 tests per month. And you have really good uplift you, if you will be experimenting a lot with staff, tried to, especially which works really well. It’s a personalization in your onboarding experience, try to use the name of your user or something like that. The third step, I think it’s a payroll when you will have their buy subscription. So, here are a lot of best practices, for example, and maybe everybody now in the industry that likes its super successful payroll, which is called Blinkist, it’s like, they will show you how your free trial works. So basically, they provide information that today is there for your free trial, in five days, you got a reminder that you’re almost finished your trial period on the seventh day, so you will be billed. So and I think it’s one of the greatest examples of how can work with your monetization in a super honest way with your users. And I think the last responsibility, in which I participate, like as a growth manager is the first-time user experience when you either just see the main top of your app or the main page and try to navigate through them. So basically, there are a lot of internal flows in your product and your goal is to try to find this ideal, ideal way for the users to adopt them and after that retain them over the long distance. So basically, I think there are four main responsibilities, not only for me but also for a lot of growth managers who are working in the mobile industry.

Spyros Tsoukalas: Thanks. After a few years in the startup world, the first thing that comes to my mind when I hear about SaaS or subscription is acquisition. So thanks for enlightening us on all the other aspects that people like you deal with. So could you bring a few, like, practical examples, nothing confidential, from previous experience around like monetization with subscriptions, like, what like successes did you have, like testing or changing stuff, like, in rough numbers, just to help people understand how impactful this can be?

Eugene Strelets: That’s great, I think that one of the easiest ways to try to grow your subscription is to play with your price and your subscription duration. So basically, a lot of companies, especially startups, which just started their ventures, tried to make their price so low, but it’s hard to grow. So basically, one of the easiest ways how to grow your business is just to try to test different prices and try to decrease or increase your price. I see you can get super significant results in just one month. I think it’s the background, which you can start right now. The second one, try to build your onboarding experience, as smoothly as you can. Because it’s the first touchpoint of your product. And it’s a lot of almost every user, they have this connection with your onboarding experience. And why it’s so important to work with the onboarding experience. Because during the onboarding experience, a user can make a decision, whether he will buy a subscription or not. So try to, be super personalized with your users. And due to that, you can have also great results. And start, I think it’s also important to work with the key factor, like all viral marketing. I have really cool experiments with how to increase your key factors. For example, your user buys a subscription, and you can provide them with five gift cards for your friends, which got like 30 days of free access to the app. So in this way, you can solve my two main goals. First of all, you can acquire new users at zero cost, which is really great. And the second one, its feature can retain your subscriber for a long list because you can share their access with different people and get more value from your subscription. So I think there are three main stuff, which everybody can start to do right now.

Spyros Tsoukalas: Eugene, thanks for joining us tonight and sharing with us your experiences with subscription SaaS and monetization. I think it’s a very blurry area, especially for early-stage founders. So thanks for taking the time to share with us all these insights.

Eugene Strelets: Thank you for your invitation. It was really, really great to communicate and share my experience.

Spyros Tsoukalas: Thanks a ton.