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How a simple dialog increased the sales of our Android app by 260%

March 28, 2011 at 8:08 pm | android, blog, monetizing | 12 comments

 

Short version. By introducing a dialog in our free application that encouraged the user to purchase the ad-free, paid version of it, we increased sales by 260% in the first week: 20% of the users clicked on the Go PRO button and, out of those, 15% finally bought our paid application.

Long version. We launched Spell Checker back in May 2010. It has been downloaded a million times (actually 985072, but come on, it sounds so much more cool), and has 60% active installs. It is ad-supported (by Admob, but it used to be Mobclix, see our experience with them here), and it doesn’t do too bad, with a eCPM of $0.09. The paid application is Spell Checker PRO, which is the same application, but without the ads. It used to be named Spell Checker Donate, in order to be very clear about the fact that there are no extra features.

It turns we need a user to click 70 times over our ads in our free version in order to generate more revenue than the paid one. We know this after doing a couple of operations over our Admob numbers. So, it is clear, we need to increase our conversion rate. (Still, we had a glance at our Flurry analytics, 18% of our users use our app more than 4 times a week. Not bad, but 40 clicks are way too many!)

What we did is dead simple: when you’ve used the application for 3 times, you get this dialog:

Go PRO dialog in Spell Checker

Go PRO dialog in Spell Checker

In order not to bother the user too much, we’ll wait until he has used it for 5 additional times before we show a similar dialog. Then, we’ll show it 8 times later, 13, 21, … (By the way, can you guess the next number in this sequence? :) ). The text will be slightly different each time, sort of like “So, do you like it now, or still not sure?”. Also, for existing users the message is a bit different.

While we analyzed this and other alternatives, we of course wanted to based our decision on numbers. Our estimate was that 2.5% of the active users would convert:

  • 50% of the users won’t even get to see the dialog in the first month. They are not active enough. This figure comes from our Flurry stats.
  • Out of the remaining half, 5% of them (1 out of 20) will hit the “Go PRO” button and buy it. This figure comes purely out of our air.

That sucks. We have no idea how many users will decide to buy it just because we suggest they do it. But now we know!

This pie chart shows the ratio of users that chose Free, 80%, versus those that decided to go PRO, 20%:

Users that choose PRO vs Free, from our Flurry stats

Users that choose PRO vs Free

We have matched the absolute numbers here with the actual revenue in Checkout, and it turns out that only 15% of them finally performed the purchase. That means, 3% of the users bought our application just because of our dialog. 3% is 15% of those 20%, and represents the magic ratio that we guessed out of air.

As a consequence, our daily revenue has grown by 260%, comparing the first week after we implemented this to the preceding weeks.

We are aware that the daily sales will considerably shrink after the dialog has reached most of the existing user base. So, of course this 260% won’t work for a new application. But it remains true that this has been the impact on our numbers, and hopefully all this helps you in your own estimates, which is our main objective with this post. Social behavior is so unpredictable!

We are just starting out in this fascinating world, and are aware that we are not good at selling. So help us a bit: how would you suggest we increase our conversion rate?

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12 Comments to “How a simple dialog increased the sales of our Android app by 260%”

  1. anakin78z says:

    Great post. Thanks for sharing your figures. I currently have a free, paid & ad supported app in the market, and this helps me plan ahead.
    Out of curiosity, have you gotten any negative feedback about your ‘nag’ screens?

  2. Anas says:

    The next number in the sequence is 34. Where do I receive my prize?

  3. Did you really mean eCPM of $0.09? In your previous posts comparing ad networks you were showing much better results. $0.09 seems too small to me.

  4. @anakin78z No, we did not get any negative comments so far in the market, neither by e-mail. We certainly didn’t want to annoy them too much, and seems we got a good balance

    @Anas :-D

    @Martin Yes, it’s such a low eCPM :( . In the posts where we compare Mobclix and Admob we were using other applications of ours which perform way better with ads. Spell Checker is clearly not a good fit for ad-based business models

  5. Brian Long says:

    Very interesting post.

    I work with Jordan at Pontiflex. I know you briefly tried our solution, but I think there are a bunch of other interesting solutions we can discuss to help you upsell your product and earn better CPMs, while also making a better ad implementation. We also pay very promptly.

    Jordan will reach out or you can shoot me a note – Brian at Pontiflex.com

    Congrats on all of your success

  6. luiskap says:

    Interesting post.

    Personally, I don’t like to show a popup to users unless it’s a consequence of an user action, that kind of popups are way too intrusive. What you haven’t measured (yet) is the global feeling of users about your app, that does not appear in numbers, and may have an impact in the long term.

    I prefer driving users to the paid version with a menu option, house ads, or by pro-only features, which show them a popup when trying to use them.

    What you’ve done here, to me is, as said in spanish: “bread today, hunger tomorrow”

    But hey, that’s only my opinion, I may be wrong.

  7. That’s a very good point, luiskap.

    We did consider the long-term implications. It sucks that we will never know the answer to your concern with certainty, so this makes for a very good discussion.

    The key thing that I believe makes this dialog work even in the long term is: for a user to generate more revenue in the free version than in the PRO version, he has to click 70 times on an ad. The question is: how much do you have to piss them with the dialog to make this a bad idea?

    In the model we built to estimate the consequences of this decision, we introduced a “disappointment factor”: free_users * revenue_per_free_user < free_users * disappointment_factor * revenue_per_free_user + pro_users * revenue_per_pro_user. Taking pro_users = 0.025 * free_users, and revenue_per_pro_user = 70 * revenue_per_free_user [1]. The result is: disappointment_factor > -0.75. This means that, even if 75% of the users get pissed and leave, we’ll be fine in the short term.

    Now, things get much more complicated if you want to consider how those negative ratings will affect the downloads pace in the future. We just saw that the number of our naive calculations yield such a good margin that even if we’re wrong by 50%, it’s still worth it.

    Also there are other possibilities in favor of this approach: what if the peak of users of the PRO application manages to get us featured on the Android market? Or, how many users will go straight for the PRO version just because it is higher in the ranking? And also, what if the built-in spell checker improves and our application makes no sense any more? In this case, we’d rather make as much money as we can now, and forget about the future…

    All in all, you make a very good point. I believe we made a good decision, but I also see there are downsides, and it’s difficult to quantify. There’s one thing for sure: putting this in numbers, and discussing them, is a very interesting thing to do!

    [1] There, we are being generous and assume that all users of the free version click once, and only once, on an ad during the lifetime of their interaction with our application. The real number is around 0.4 in our case for this application, which has a remarkably low CPM.

  8. luiskap says:

    You’ve got an interesting point there. But again, there’s something you can’t measure (easily) with numbers. User satisfaction not only affects in them leaving your app, it can cause that users don’t recommend your app to others, or affect your reputation as a developer.

    Pissing off users isn’t good, even with a huge margin (I take this as a rule). It’s better to have 500,000 happy users with revenue = 0, than having 5,000 happy users with revenue = X (insert big number here). There’s a huge (indeterminate) revenue multiplier there, but you’re in a worse position, even if you are earning (a lot) more money.

    (Happy) users are money, even if you’re earning $0.0 each.

    Love this kind of discussions, It’s a really interesting area :)

  9. If X is big enough… I’d rather have 5k paying users!

    But I agree, if you play your cards well with those non-paying 500k users, it certainly has other long-term advantages that are hard to quantify.

    We’re currently deciding on the business model for our next application (which has gone to idea to almost-done in 4 days, what a sprint!), we’ll take this advice into account.

  10. Jack says:

    What I want to say is about the delayed payment.
    Firstly,the paymen cycle of Mobclix is said 75 days.But actually, there is another one month for our developers to receive the earnings, probably. And more seriously, Mobclix
    never sends out the payment on time.What do u think about of this issue?

  11. Gain says:

    Dialog can be used as a form of marketing but let me say this that android is also a powerful platform that most people would love and that is why the message conveyed through that simple dialog cause sale increase.

  12. Robin says:

    Interesting that you write “The free version has expired” – it hasn’t really though, has it? Do you think that (perceived) urgency helps people to click on upgrade?

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