3 Case Studies from Headspace on how to increase revenue
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For this post, we got a chance to learn from Shreya who is Senior Director of Product @ Headspace and owns all subscription revenue (free trials, paid conversions, onboarding and activation)
Experiment 1: Understanding Multi-Intent User Needs Led to nearly 10% Increase in Conversion Rates
Context
Headspace, a mental health and wellness mobile app, aimed to increase conversion from free to paid users through improvements in the onboarding process. Headspace was looking to optimize the "get to know your users" flow which is a 4-to-7-question onboarding flow.
Problem
Users often arrived at Headspace with multifaceted needs rather than a single, easily identifiable goal. The challenge was to accurately capture these varied intentions to tailor the app’s offerings effectively.
Solution
The team compared two approaches: a multi-intent query versus a single-intent query during onboarding. The multi-intent approach allowed users to select multiple reasons for using the app, such as anxiety relief, mindfulness, and stress management. In contrast, the single-intent approach asked users to select just one primary reason.
Impact
Allowing users to express multiple needs resulted in a nearly 10% increase in conversion rates. Users who could articulate a range of goals felt that the app was better equipped to address their diverse needs, leading to higher free trial conversion, content engagement, and stronger trust in the app.
Learning
The key learning was that users seeking wellness tools often face complex, multifaceted problems. By acknowledging and addressing these multiple needs, the app created a more personalized and effective user experience, enhancing engagement and conversion rates during onboarding.
Experiment 2: Integrating Social Validation led to 3% increase in Free to Paid conversion
Context
The Headspace team aimed to explore how incorporating social validation into meditation sessions could impact user engagement and conversion rates. This experiment focused on providing users with access to encouraging thoughts from other users in the Headspace community.
Problem
Users often benefit from social validation and encouragement, especially when building new habits like meditation. However, the app initially did not offer a way for users to see what others thought about the meditation content while listening. The challenge was to determine if exposing users to positive feedback and thoughts from others during meditation could enhance their experience.
Solution
The team introduced a feature that displayed encouraging thoughts and positive feedback from other users during meditation sessions and allowed members to reply to each other. This real-time social validation and interaction mechanism reassured users about the content's effectiveness and benefits and created a valuable discussion space, enhancing their overall experience.
Impact
This feature led to a 3% increase in the survival rate of free trial users. By seeing positive comments and feedback, users felt more validated in their efforts and were more likely to continue using the app beyond the trial period.
Learning
The experiment revealed that social validation plays a crucial role in user engagement and retention. Two main learnings were:
Users who could engage with encouraging thoughts and feedback during meditation sessions felt a stronger connection to the app and were more likely to continue using it. This demonstrated that incorporating social validation and a community layer to a product can significantly enhance user experience and improve conversion rates.
Users could use the comments to figure out how to make the most of Headspace. Members replied to each other with personal experiences, advice, and empathy.
Experiment 3: Unique Referral Programs led to 8% increase in Revenue
Context
To tackle consumer skepticism and help potential users understand the value of the Headspace app, the team implemented a referral program. This initiative aimed to convert skeptics into trial users by leveraging the trust and recommendations of current users.
Problem
One of the primary challenges was helping people appreciate the value of the Headspace app and encouraging them to start a free trial. Many potential users didn’t quite grasp what the app offered and were hesitant to commit, even to a short trial period of 14 days.Â
Solution
The solution was to start a referral program with an attractive incentive and use passionate Headspace users as trust brokers, drawing new audiences to the app. While the standard free trial was 14 days, the referral program offered an extended 30-day free trial to recipients of the referral. The program enabled users to share content that had resonated with them with their friends and family, making the referral content highly relevant, contextual and tailored.
The referral process was straightforward:
1. Users listened to specific content and found it valuable.
2. They sent a text link to friends & family recommending they check out that content
3. The recipient would be able to play a 30-60 second preview of the content.
4. If interested, the recipient could download the app & sign up for 30-day free trial.
Impact
The referral program led to a 7% increase in new sign-ups. Additionally, it resulted in a 8% increase in revenue due to the higher free trial to paid subscriber conversion rate from referrals. The personalized nature of the referrals and the extended trial period were key factors in this success.
Learning
This experiment highlighted the power of referrals and the importance of leveraging existing users to reach new audiences. Potential users were more likely to trust and act on recommendations from friends or family, especially when coupled with a meaningful incentive like a 30-day free trial. The experiment also showed that a personal message from a friend and an attractive incentive, combined with short, engaging preview clips, could effectively pique interest and drive downloads.
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