Walking the P&L Tightrope -Tips for a smoother walk

The feeling you get when you check Inflow/Outflow(P&L)

Startups and New Businesses are walking the tightrope every day. The rope is loose and thin and the chances of falling by the wayside are very high.

Since the journey on that tightrope is long and arduous and that too in another year of the pandemic, it makes sense to follow some best practices that make you balanced for the long run.

(Note: I am telling this from the standpoint of the Freemium App Model but this pretty much applies to other digital platforms too)

The graph that we all want to see is like the one below, isn't it?

The right kind of graph to see every morning for someone who manages P&L

Very simply put,

1. Optimize your Paid Marketing and understand the sweet spot for Paid-Organic to work together
2. Find ways to increase Subscription Revenue
3. Keep increasing the Daily Active Users and App Engagement

As you can see on the graph above, we took almost 3 months in 2020(During the first break of the pandemic) to figure the mix out.

Basically, we realized we were spending marketing monies to get users but given the high uninstall rates/low patience/price consciousness/space constraints(Emerging Markets) our Marketing Burn Vs Revenue Vs Daily Actives did not make sense.

I am putting in below the things we did at Travel Buddy to balance ourselves on this P&L tightrope. My request is to pls add or point out anything that I might miss out on as — we are always learning :)

Optimize your Paid Marketing and understand the sweet spot for Paid-Organic to work together

1. Let Machine Learning on Auction be the guiding light: Moving to AAA(Automated App Ads) and UAC(Universal App Campaigns) was the best thing we did last year as it brought down our CPI(Cost Per Install) by about 1/3rd to even 1/4th(In peak season). Now we run only AAA/UAC campaigns for App Discovery with 30 + creatives(mix of Static, Carousel, Video, Vertical Video) which are optimized at the user level by the auction

AAA and UAC — Auction Based Machine Learning Solutions

2. Understanding the Paid - Organic Sweet Spot: If you are a Start-Up with limited marketing monies, then the high chance is you will be known mostly in your region. In our case, we are a global freemium travel app but due to zero branding and the added pandemic where Intl Travel went down to zero, we realized that localizing communication was the key. We played around with Hindi and Hinglish(Hindi in English) copies and we tried a lot of these(30+) in AAA/UAC campaigns.

Contextual and Localized Communication Is Key

While we did this, it was important to see the health of the mothership — i.e the Play store console. Going to Store Analysis in the Grow section of Play Store Console, we were able to see the Store Listing Acquisitions at the Traffic Source. Doing this month on month, we were soon able to find our sweet spot

Checking the analytics/key metrics regularly is the next step

You can too if you try the above in a systematic manner 💪 😊

Find ways to increase Subscription Revenue: Getting that incoming money is of paramount importance and here are some tips on the same :

1. Targeted Messaging to Specific Cohorts with Subscription Deep Link: We use Predictions on Firebase engagement section to target specific cohorts of users with specific communication. These cohorts are generated automatically by your analytics partner(We prefer Firebase and GA) based on the past behavior of a similar cohort

Build Cohorts of your App Users Today!

For example , below we have targeted users who are most likely to purchase our subscription(Verified Traveler) with a contextual creative and a deep link.

And then target them using Deep Links

2. User Meet Ups(Virtual/Offline) — Spread the word: Users mean everything as they are the reason your product exists and runs. We regularly do monthly Meet Ups with our users either offline or virtual. We take questions and doubts from our users and try to fit into their shoes. Any meet-up is also a great growth hack for organic and sticky installs as these loyal users become your brand advocates.

3. Set Up Paid campaigns targeting In-App Actions: This is a highly targeted way on Auction Platforms(Facebook/Google) to get lower-funnel actions. Must do as the budget required is 10–20% of App Install campaigns

Keep increasing the Daily Active Users and App Engagement: Keeping users engaged on your platform and making them come again and again is really important so that they can try all the features that exist and eventually become loyal subscribers. Few things that we have learned on the way that works for us are :

1. Patiently figure out your push notification strategy and make it BAU: Too many notifications is an annoyance for users and too few means your app will get lost and then erased from the phone due to nonvisibility. It took us weeks to understand which type of notifications worked with our users(In terms of open rate) and we also checked the daily uninstalls to understand the correlation. If you are a global app, be cautious not to carpet bomb all geographies (Example: A Gandhi Jayanti notification that works perfectly in India might not in the US)

Push Notifications — Make it a Boon , not a bane!

2. Incentivise your users(Referral Programs): This is one of the best ways to increase daily actives. Make sure that you incentivize the user who refers to his/her friends

Make users refer friends and get incentivised

3. Contests and Alliances: Contests are a way to keep your users engaged and also to generate user-generated content around various themes. For travel players amidst the lockdown due to the pandemic it's a great way to invoke nostalgia amongst travelers to share their best travel moments

Have contests regularly to engage users and induce app check ins

Lastly alliances and barters are a great way to create added value to on the app and create user goodwill. Each brand will always have many complimenting businesses. Talk to them and barter your way out!

There are many opportunities for Barters and Alliances with comlementing businesses

I hope you liked the ideas put across by me. These are a few things that have helped us make our P&L more positive and you can try a few of these out. In case you want to reach out to me, shoot me a mail at saurav@beatravelbuddy.com and would be very happy to have a chat.