In early 2014 we started developing a trip-logging app. It was a pivot from an earlier app we published (GoPublic, RIP). We called this new app Passenger. Version 1.0 was launched in mid 2014 with a lot of uncertainty around what the app aims to achieve, exactly, or why people should use it.
Passenger allowed users to log their trips by checking-in to start, and checking-out to end a trip. You could share your trips with friends, post them on social media, earn badges and keep hi-scores for "longest trip ever" or "shortest time to work". Nice, but not very useful. The app didn't address any particular problem or need. We didn't have any specific target audience in mind or a business model for that matter.
The lack of clear goal led to a lot of wasted time and energy during the first year of life of Passenger. We explored a few different directions, such as social travel (sharing trips with friends and family) and gamification (hi-scores, badges, emissions score).
What was clearly missing was a strategy: how to take this idea and turn it into a scalable, monetisable app?
Find the problem
We had a descent trip tracking engine in place, but we didn’t know how to monetise it. We thought: “what can we do with this technology?”. We had a solution, but we needed to find a problem.
We began to explore the marketplace and found out that keeping a mileage logbook is actually one of the requirements for claiming travel expenses when using your private car for business trips.
Many countries around the world have a tax policy in place where an individual can claim mileage expenses as a tax-deductible expense. In order to do that, one must keep detail records of all trips made, including origin, destination, departure and arrival times, the mileage driven and the purpose of the trip.
Now, if you're driving every day, keeping such a detailed log of your trips can be a daunting task. It's tidious, time consuming and error prone. Employers who accept employee mileage expense reports as excel sheets have no real way of validating those reports. Did the employee actually make those trips? Is the mileage correct? As it turned out, there's quite a bit of fraud going on in this area.
Define the target persona
Once we found the problem, we needed to define who suffers from it the most, how do they cope with this issue now, and whether they'd consider our product as a solution. In other words, we were looking for our target personas - customers who will pay for the service.
In order to understand the challenges, goals, and objections of our target personas, we ran surveys and gave away free upgrades to users who answered them. We learnt a lot about what our users do, what they needed and what their expectations were from the app.
In parallel, we researched all the potential keywords that would be used to find our solution online and on the App Stores. After a while, we understood better what people were looking for and were able to better scope the solution to fit those needs.
Critical market research & Competition
Motivational speaker Tony Robbins is known for saying, “success leaves clues”, and those that are smart emulate those who have been successful. The AppStores count 3 million Android apps and 2.5 million iOS apps. It was clear to us that we were not the first mileage tracker app out there. In fact, we found an abundance of mileage trackers as well as fleet management apps that do exactly the same thing.
We set out to discover all the information we could about our closest competitors. We used tools for gathering app intelligence and analytics. We read user reviews. We downloaded and tried dozens of apps in the space. We booked demos. We researched how these other companies obtained their traffic. What their marketing is like. How they rank against the same keywords, and more.
Once we defined a clear direction, we had to redefine the application scope and to address two major issues:
Get rid of the noise - features such as “friends” and “badges” had to go. They were not directly helping users achieve their goal: logging mileage. As such, they were confusing, distracting and even attracting the wrong audience. They also added complexity and made the app more difficult to use, develop and maintain. It was overweight and it had to go.
Solidify the core functionality - anything to do with trip tracking became first priority: tracking accuracy, automatic start/stop, pitstop detection, travel mode detection and detailed map traces were some of the features that we identified as “core tech” - the problem that the app promises to solve - and must solve.
While the app launched with no business model and was offered as “free forever”, we quickly introduced a premium subscription-based service with “free trial” of 30 days. Soon enough, we found out that this model wasn’t working at all. People would use the 30-day trial and leave. This left us not only with flat traction, but with no user data to fuel our learning.
We switched to “Freemium” model. You could use the app for free, forever, but had a limit on the number of trips you could log per month. This change was one of the key decisions we’ve made. Many more users stayed, albeit for free, which allowed us to collect valuable data, learn, and improve the app further.
Looking at the user data we collected, we realized that our user acquisition had two major drop-off points:
- At the top of the funnel, not enough downloads were converting to sign-ups.
- At the bottom of the funnel, almost no active users were converting to premium subscriptions.
We addressed each of these problems separately, and differently. Converting downloads to sign-ups was easy enough to improve. We rehauled the signup flow and simplified it to a single tap. Converting freemium users to premium was much more difficult.
The difference between acqisition and retention is that acquisition focuses on a singular achievement, while retention requires recurring success: keeping the user engaged.
For mobile apps, retention is the elephant in the room. The biggest problem that plagues mobile apps - regardless of their category or purpose - is keeping the user engaged, and active.
For a subscription-based app like Psngr, monetisation required converting free users to premium users at the bottom of the funnel. This translated directly to retention. If users stay and keep using the app, they will eventually upgrade to premium. On the flipside, if users do not upgrade soon enough, they eventually stop using the app. No retention = no monetisation.
Converting free users to customers was - and still is - a struggle. To approach this problem, we first needed to define the exact moment/s within the acquisition life cycle when the user took a buying decision: to upgrade or not to upgrade to premium. We then had to understand why many users, when reaching that moment, decided not to upgrade. Again we ran surveys, added analytics, A/B tested email comms, and integrated tools that would provide more insights into user behavior, experience and expectations.
Monetisation is achieved when the perceived value of the service is greater than its cost. Different people have different perceived value, depending on their needs and how big of a problem your solution solves for them. That perception may fluctuate depending on changing needs and availability of alternatives.
The process of taking an idea and bootstrapping it into a scalable, monetisable app is daunting. Consistency is one of keys to success. Looking back at 2017, I'm proud to see what our team was able to achieve. Within a year, we increased premium conversions by a factor of x20, from 0.5% to 10%. User retention increased from 10% to 35% on week 1, and from 1.5% to 7.5% on week 12. AppStore ranking increased from 3 stars to 4.5 stars across all geo’s. MAU doubled and user engagement increased by 34%.
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