jennifer shen
 

Tap: Monetization Model

2017, research / STRATEGY / UX DESIGN

Discovering values that users are willing to pay for to drive a sustainable business model.

 
 

background

Tap by Wattpad is a chat-fiction app that introduces a new way to experience interactive stories on your phones. These stories go beyond text to integrate media like video, sound, images, voice notes, and even a “choose-your-own-ending” feature. Since its debut, Tap has grown its catalog to include over 300,000 stories and has recorded over 2 billion “taps” to date.

 

problem

Tap is a subscription-based business. Unfortunately, Tap saw a large percentage of users cancel their subscription or trial after the first month. In order to address these concerns, the team needed to find out what users valued in Tap and how much they're willing to pay.

I broke the problem down into three distinct pieces and began to work on them in parallel:

  • How do users make purchases on Tap and how can we help them optimize this process?

  • What do users value in our product and how much are they willing to pay for it?

  • What is the right monetization model and price/value bundle for our users?

 

Design Process.png
 

process

As the sole designer on the team, I led the end-to-end research and design process within a span of 2 months.

1. Research (Generative Research)

Our team conducted 6 moderated user interviews to fully understand our users' buying motivations and identify our user monetization segments.

2. Quick Design Iterations

I led weekly design sprints to innovate, design, and test a new monetization system that can accommodate for all user segments.

3. Fine-Tuning Designs

I iterated on previous designs based on interview feedback, created high-fi prototypes, and designed for edge cases for delivery. 

4. Testing (Evaluative Research)

In order to get actionable data, I tested the new design with real users over a longer period of time through A/B testing and ethnographic studies

5. Repeat

Based on the evaluative research insights, we will continue to research and iterate on new features. 

 

 

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generative research

Through user interviews, I was able to map out the user journey and the emotions associated with each stage when making a purchase on Tap. My PM and I also conducted a price sensitivity survey to back up our interview findings with the exact price range users are comfortable with paying.

 
 

 

Through user interviews, we discovered two main pain points in our user journey. As a result, these two factors cause our users to have a low willingness to pay. 

  1. Low perception of value: The current onboarding experience is much too limiting for non-paying users, we ask users to pay before they have the chance to explore Tap.
  2. High price point: Users cannot justify committing to the price and length of a subscription because they see Tap as an impulsive purchase.
 
  Users WTP increases when they understand the value they're getting from the app and can justify for the price they're paying for. 

Users WTP increases when they understand the value they're getting from the app and can justify for the price they're paying for. 

 
 

user segments

One major observation made was that our subscription model does not account for varying degrees of willingness to pay (WTP). Currently, we only identify users as paying and non-paying as Tap only have one mode of monetization. This limits our revenue by not offering users different ways to make purchases.

To solve this, I mapped out user journeys from Job-To-Be-Dones and user monetization segments to supplement our research on user purchase behaviors. I used the classic gaming monetization segments for our users: whales, dolphins, minnows, and free users.

  Monetization segments: size of data points are proportional to the number of users that fall under that segment.

Monetization segments: size of data points are proportional to the number of users that fall under that segment.

 
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design iterations

In order to move quickly, our team followed an iterative design process and did week-long design sprints for a month. I facilitated the ideation sessions, created solutions, conducted and shared research findings with the team for each sprint.

Designing with the newly established user segments in mind, I was able to quickly mock up some designs testing out a monetization system combining In-App Purchases with a subscription model. I later realized that this model would not work with the current aggressive onboarding experience, so we redesigned the onboarding experience to gives users more freedom to explore features and values.

 
 

I also decided to continue with a dual-currency economy with subscriptions, since one currency would not be able to accommodate for all the monetized features on Tap. I iterated the design many times to explore ways to engage users with sources (ways to earn currency) while balancing out sinks (ways to spend currency). 

 
 

 

Monetiaztion Image.jpg
 

solutions

Our solution was to create an experience that enabled users to explore Tap and slowly ramp up spending once they discovered more value in the application. The new monetization system will not only accounted for various degrees of WTP, but give users options to indulge in both impulsive and calculated purchases.

 
 

Helping users understand value

We eliminated blockers in the onboarding experience so that users have a chance to uncover values and get emotionally invested in their first story. Paywalls are now only shown to users once the user has established enough core emotional values through content. 

 

 
 

Monetizing on what users value

One major change in the app was to focus on monetizing the functional and emotional features users value the most. We were able to ask users to pay at the right place and time by monetizing on features that lead up to the emotional high and satisfying ending of the story. We have also adjusted the price of our IAP and subscription based on user's price sensitivity by features. 

 
 

Optimizing for impulsive buys

We also needed to create a simple and frictionless purchase journey to accommodate for impulsive purchases. By providing users the option to choose between IAP packs and subscription options, Tap can accommodate those who make impulsive purchases as well as calculated purchases. 

 
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testing

I believe in testing early and often: our designs were validated using moderated and unmoderated user tests throughout the iterative design process.

However, in order to get actionable data our redesign must be observed with real users over a longer period of time. We have set up A/B testing to understand the redesign's effects on revenue and user activity. Our team will also be conducting a diary study to collect qualitative user feedback to supplement our quantitative learnings.

Test results are currently being collected. Check back soon to see the impact of the redesign! 

 
 
 

impact

The new monetization system was researched, designed, and tested within 2 months. The redesign will be launching soon, with goals to increasing generated revenue and increase user retention and activity.

 
 

 

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