Episode Details

On this episode: The evolution of Headspace’s freemium model, balancing mission and monetization, and why referral programs sometimes work better without incentives.

Top Takeaways

💰 Don’t be afraid to experiment with gating 100% of your content. Not only can this result in a significant lift in paid users, in cases where an app requires some effort from the user (such as with meditation), getting them committed with a free trial early on can boost engagement levels versus free users.

⚠️ Promoting your strongest performing plan at the expense of your others doesn’t always have a positive effect. Let’s say your annual plan might display the best performance in terms of revenue or retention, giving it too much prominence can cause lower intent users to sign-up for it, leading to fewer trial-to-paid conversions. In these cases, giving users choice could produce the best results.

👪 Users on family plans can show the strongest retention rates. When users subscribe to your app as part of a family or group, there’s a degree of accountability involved: if one member is using it, then the others are less likely to want to cancel as a result.

🗣️ When designing onboarding experiences, think about the product and lifecycle messaging together. Having the option of communicating with users both in and out of the app means you can get more creative with your onboarding — for instance, offering a “prize” for completing the first month, and using email to remind users when they’re lagging behind.

💬 Some apps will benefit from referral schemes that are less transactional. Rather than receive some monetary reward, some apps’ users are more motivated by the intrinsic reward of being helpful. But you can experiment with more unique benefits for being a top referrer, such as exclusive content or in-person events****

About Shreya Oswal and Keya Patel

👨‍💻 Shreya is Senior Director of Product Management, Membership at Headspace, and Keya is the former Director of Product Management, Growth.

💡 Shreya: “Bringing that free trial online and letting users choose for themselves was a big win for the business and a big win for members in terms of picking the right product for them.”

💡 Keya: “Experimenting with the extreme of what happens if you condense onboarding as much as possible and ask for a conversion moment or an upsell [works] from a data perspective. So it wasn't necessarily a failure.”

👋 Shreya on LinkedIn | Twitter

👋 Keya on LinkedIn | Twitter

Links & Resources

‣ Check out Headspace

‣ Headspace for Work

‣ Headspace-Ginger merger

‣ How Freemium Can Outperform Free Trials – Shaun Steingold, Momentum Labs

‣ Connect with Shreya on LinkedIn

‣ Connect with Keya on LinkedIn

Episode Highlights

[1:53] 80/20 rule: Keya talks about Headspace’s evolving freemium strategy where 80% of their content was locked behind a paywall. They tested the effect of locking even more content — with a positive impact on conversion.

[6:26]