How to Optimize Trial-to-Paid Conversions — Rachel Chukura, The Weather Company

David Barnard:

Welcome to the Sub Club Podcast, a show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors, and builders behind the most successful apps in the world to learn from their successes and failures. Sub Club is brought to you by RevenueCat, thousands of the world's best apps. Trust RevenueCat to power in-app purchases, manage customers, and grow revenue across iOS, Android, and the web. You can learn more at revenuecat.com. Let's get into the show.

Hello, I'm your host, David Bernard. Today's conversation is shorter than usual and will be featured in RevenueCat's State of Subscription Apps report. Each episode in this series will explore one crucial metric and share actionable insights from top subscription app operators. With me today, Rachel Chukura, head of consumer product at The Weather Company. On the podcast, I talk with Rachel about how to optimize paid conversion, the impact of external factors on A/B testing, and why increasing subscribers probably shouldn't be your top priority. Hey, Rachel, thanks so much for joining me on the podcast today.

Rachel Chukura:

Thank you so much for having me. I'm excited to have the conversation.

David Barnard:

So we're talking state of subscription apps and one of the key metrics a lot of people look at in the report to kind of determine how their businesses is shaping up compared to others is the trial conversion rates is converting from a free trial, converting from app open to paid, and then ultimately that's also converting from premium to paid. And so that's what I wanted to focus on today was optimizing and strategy for how to think about those things. And The Weather Channel app is interesting because you have both a very generous free year, which does kind of make it more challenging to push that subscription as opposed to hard paywalls or are more aggressive or have fewer features, but they also have a free trial for the premium feature. So it's an interesting model. So let's just start with that aspect of balancing freemium and having a free trial even for a premium app.

Rachel Chukura:

Yeah, absolutely. So as you pointed out, our app is very generous from an ad-supported free experience, and that's because we've always seen ourselves really as a utility, whether it is in some ways a commodity that exists throughout the ecosystem. And so as we look at the landscape, we know that there's a level of importance of having a certain amount of information that is just readily available for those core user needs. But what we have identified is that there are users and specific cohorts within our business that are willing to pay. And so we have over the past four or five years established a really strong freemium experience in which we're able to really play into the user need of specific cohorts.

And in our case, it really is that weather enthusiast that is a power user wants access to more data, more sophisticated radar experience. And that has allowed us to at least drive the initial growth of the business. There's still a lot of value that core users are getting from us. And so as we look to unlock the next phase of growth, we are looking at what is available overall and how do we better balance the gate that exists within the product to get users into that funnel.

David Barnard:

I think that's a really great frame of reference to start thinking about subscriber conversion in that so many apps are so focused on getting that subscriber that they're not seeing the forest for the trees of there being so many cohorts that would be casual users that they could still monetize via ads and maybe nurture over time to become a subscriber. And so it's interesting on the fact that as a business, The Weather Channel has chosen to give away more value for free and then understanding who very specifically is the cohort that is willing to pay more and then monetizing those better. What's the process for a better understanding who those people are and then better targeting them so that you can keep those free users but then still have this extra value you layer on?

Rachel Chukura:

We do a lot of research. We know a lot about our users and about our business and the industry. So everything that we do and construct in a subscription product and a core product is centered around those core jobs to be done of our users. And that comes through research, it also comes through analytics. We take all the data that we know about a user and create cohorts and segmentation that allows us to better super serve those users with the data and the information and the features that they care most about and are willing to pay for. So in this model, it's been really wonderful to be able to look at what our power users care about because a lot of those weather enthusiasts are power users for us. And so they spend almost every day, multiple times a day in the product.

They've been with us through the legacy of our brand. And so there's a lot that we can lean into there, but what's going to be really important for the next phase of growth because the subscription industry at large is going through an evolution right now, as are we, is to find that next segment that we can lean into, build features for and move past just core weather data as a value behind the paywall into the what's next that's additive to that user experience.

David Barnard:

In finding those new segments and unlocking those new opportunities, what are the tools or what's the process you're using to discover those things?

Rachel Chukura:

We do interviews with our users. We do broad surveys to understand user need and behaviors. We look at product analytics, we look at subscription analytics through like RevenueCat that enable us to identify those new opportunities. So what it allows us to do is look at the behaviors themselves, look at what users are saying are the behaviors or the needs that they have and really matching that up to what they're doing when they are in the product to make sure that those things align because not always do user need that is verbally communicated actually match the behavior that you see in the product, and then looking at really where those drop off points are all the way from acquisition throughout the experience throughout the subscription life cycle so we can better serve them and lean into those moments that matter.

David Barnard:

Are you starting to segment and build up an understanding of an individual user and then hitting them with a more specific and targeted paywall or pointing them to specific areas of the product that you'd know is then going to help nudge them towards conversion?

Rachel Chukura:

Absolutely on both fronts. So we have historically been a very anonymous based site. We get a lot of traffic through the Google searches and going back to how we perceived ourselves as a utility brand really didn't require a user to have a significant value exchange with us for a long time, such as providing an email address so that we know who you are and what you care about. As that begins to evolve, then we're able to lean into improved targeting and understanding how best to package the subscription product, how best to actually elevate features within the experience itself that is most relevant and attractive to you to encourage that buying behavior. We do use AI propensity models and things like our weather targeting that really enable us to be more sophisticated in our marketing without even having to consider as much of the user side of things. But we can take the context because weather is such a contextual signal that adds value to the acquisition and the conversion of that user into being a subscriber.

David Barnard:

What do you mean by propensity models? I don't know that our audience will all be familiar with that.

Rachel Chukura:

We use data science to actually determine who is most likely to subscribe or take an action within our product. So it takes a lot of the data signals based on what you're doing in the product, what we know about you, and it merges those things together to give us a signal as to whether or not you are likely or unlikely to subscribe.

David Barnard:

So many apps are getting better and more sophisticated at this as kind of the tooling, the industry and other things have progressed. And then as AI and machine learning and these models have gotten better, they can be such a powerful tool when used well to drive those outcomes.

Rachel Chukura:

For the audience, it is really important to continue to evaluate and improve and refine those models because I have also seen the other end of the spectrum in which we have created a model and we believe works very well, but if not tuned and properly managed, things change, economics change, competition changes. So you really need to look at the effectiveness of your models if that is something that you are deploying.

David Barnard:

In building those propensity models and thinking about converting folks from the freemium experience to the paid experience, so many big consumer ads pushing to convert more of those free users to paid. There's maybe a bit of over-monetization that we've maybe gotten a little too aggressive at times about our paywalls and using every nudge tactic in the playbook. How do you think about balancing the subscriber conversion and monetization against the customer experience of it all?

Rachel Chukura:

So the way we look at it is that it is all centered around the customer. We don't lead with the monetization. To us, that is an outcome or an output of us really doing a good job with creating a performant and useful experience for our users. We lean heavily into research to understand our users and their needs so that when we think about how best to grow our subscription product, we do so within the context of what a user really is looking to achieve when they visit The Weather Channel app or weather.com and how do we lean into that behavior and that need in order to have a very clear value exchange and to surface the subscription at a moment that really matters. And so thinking about that customer journey is essential. So I'll give you an example. One of the things that works really well for us is our radar experience.

So leaning into that persona that we are hyper-serving, they like to look at data and make their own conclusions about the data. And so that is why we've leaned heavily into things like access to more data, like the hourly details or even more radar information. And so what we have found is that by really giving contacts and creating these moments of delight and access points that really start to drive demand are just hard to refute because they're core to the experience, they're the user themselves. They are finding value and finding a need that it allows us to better balance user experience and monetization. We do know that if we tip that pendulum too far in one direction, it doesn't work well for us and it doesn't work well for a lot of brands. And it really is about finding that right balance in the tiering strategy.

David Barnard:

Yeah. And for some apps, they're going to choose it. And this is what's interesting about, I mean, this conversation in the context of the state of subscription apps report is that when you look at the benchmarks, it's going across the entire industry. And so some apps do choose to monetize more heavily, but then you understand the trade-offs. And I think it's really interesting how you're framing these trade-offs because you do value those freemium users more than a lot of apps do. And then as a company, your roots are in monetizing those free users as well. The Weather Channel been ad supported for decades, and the app itself, I believe it just introduced subscriptions in the last two years. So I think it's interesting to hear you talk through these things in that broader context is that so many apps make so many different kinds of choices, but this is a great way to build a really big business is that you really take care of your customers and you delivered a lot of value to those free users.

And then you build on top of that value to then charge and you find great ways to monetize those free users so that there is like you keep saying a value exchange. So as you're thinking through all of these things, do you have any kind of specific advice for folks to take away of in your day-to-day? What are you doing? How are you thinking? What are the tactical things you're doing to help make these decisions and to guide the business?

Rachel Chukura:

So our big focus right now is data and experimentation. So really creating a lot more rigor in how do we test and learn, whether it's the change in a color of a button or the length of our trial, for example. Those are things that are really essential in kind of growth hacking the conversion rate and the acquisition of new subscribers. And so we've been able to improve our data position. We've put a lot of work into that to unlock our ability to be a little bit more nimble and more data-driven in the execution of our acquisition strategy. So that's where we're focused right now. And so we are constantly reevaluating full end-to-end experience and how do we just continue to elevate that, make it more performant, make it really a positive experience for our users so that they can continue to pay, use, and see value in the exchange that we have with them.

David Barnard:

You mentioned testing there. What are your thoughts on how to best execute testing so that you come to the right conclusions from the tests you run? I mean running something you mentioned even testing button colors, which at the scale of The Weather Channel is where you can actually start to see some wins, but you can also easily fool yourself if you don't have it set up. So how do you think about being rigorous in your testing?

Rachel Chukura:

Yeah, I think having a clear hypothesis to start is really important as well as well-defined key results. So what are you trying to achieve? What KPI are you looking to move the needle on? And I think one of the things that we have found as a business, because as you mentioned, we do have the ability to scale experiments pretty quickly. And so while we can reach stat sig on an experiment within 24 hours in some cases, we do recognize that buying behavior is often influenced by many other variables outside of very specific colors and text. Purchase behavior could be everything from what is the weather outside, what is my need in that moment that's going to drive the purchase behavior. And so we recognize that and we know that we have to run experiments for long enough to be able to, because it impacts our business, see what happens in certain weather conditions, to see what happens with all these variables in mind to really make sure that what we are seeing out of that experiment is true and something that we can believe and move forward.

David Barnard:

Yeah, that's a great way to think about it. And I hadn't even thought about how much, not even just with a weather app, but even for Strava or other apps. If Strava runs a test on a Wednesday, that's probably going to get way different results than they did it on a Saturday because more people are out biking and hiking and doing the things that-

Rachel Chukura:

Yeah, it's something that we live and breathe. Because in the weather business, we often use that as one of our privacy-forward signals because weather is actually a really strong predictor in a user action. It's funny, we just recently went through a lot of marketing research and one of the things that came up was that weather is an original influencer because it is an influencer of user's behavior. And so we know that very well. And one thing that we constantly remind ourselves is we have to do what we know works and what we understand about user behavior, user psychology, and things like weather's influence on that. And so we really do try to take that into account as we make these decisions, run the tests and put new products in market.

David Barnard:

Awesome. Well, Rachel, it has been so much fun chatting through all of this with you. So many great insights for folks to take away. As we wrap up, is there anything you wanted to share? We're going to share some links in the show notes, but anything you wanted to say as we wrap up?

Rachel Chukura:

I just will say the subscription business, the subscription industry at large is undergoing yet another change, and I think it's really important for all of us as peers, anybody who is in that part of the business, to lean on each other because we are all going through very similar things. And while our industries may be different, the experiences that we're having with driving growth in a subscription business is the same, and we should be able to create moments to lean on each other and share notes because it'll make us all more effective as well in the end.

David Barnard:

Awesome. Well, thanks for doing exactly that today by sharing what you're learning at The Weather Channel.

Rachel Chukura:

Yeah, thank you for having me.

David Barnard:

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