How can Audible balance offering longer free trials to attract new users against potential revenue loss from existing subscribers?

Introduction

Balancing longer free trials to attract new Audible users against potential revenue loss from existing subscribers presents a critical trade-off. This scenario involves weighing short-term user acquisition against long-term revenue stability. I'll analyze this trade-off by examining user behavior, financial implications, and strategic considerations.

Step 1

Clarifying Questions (3 minutes)

• Based on our current user acquisition strategy, I'm thinking we might be struggling with conversion rates. Could you share our current free trial length and conversion rate?

Why it matters: Helps establish a baseline for improvement Expected answer: 30-day trial with 40% conversion rate Impact on approach: Longer trial might be justified if conversion is low

• Considering our revenue model, I assume most of our income comes from subscriptions. What percentage of revenue is from subscriptions vs. other sources like à la carte purchases?

Why it matters: Determines the potential impact on overall revenue Expected answer: 80% from subscriptions, 20% from other sources Impact on approach: Higher subscription percentage would make us more cautious about changes

• Looking at user behavior, I'm curious about engagement during the trial period. What's the average listening time for users who convert vs. those who don't?

Why it matters: Identifies potential engagement thresholds for conversion Expected answer: Converters listen 3x more than non-converters Impact on approach: Could inform optimal trial length based on engagement patterns

• Regarding our technical capabilities, can our system easily support variable trial lengths or would this require significant development work?

Why it matters: Assesses feasibility and resource requirements Expected answer: Moderate effort required, 2-3 sprint cycles Impact on approach: Might influence timeline and scope of potential changes

• Considering our current priorities, how urgent is addressing this issue? Are we facing immediate competitive pressure or is this a proactive optimization?

Why it matters: Helps prioritize this initiative against other projects Expected answer: Medium priority, aiming for implementation next quarter Impact on approach: Affects depth of analysis and experimentation timeline