For Audible's subscription tiers, should we emphasize lower-priced plans with fewer credits or premium plans with more features to maximize user retention?

Introduction

The trade-off we're examining today is whether Audible should emphasize lower-priced subscription tiers with fewer credits or premium plans with more features to maximize user retention. This decision is crucial for Audible's long-term growth strategy and user satisfaction. I'll analyze this trade-off by considering user behavior, financial implications, and product strategy.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming this decision is driven by recent changes in user behavior or market conditions. Could you share any specific trends or data points that have prompted this consideration?

Why it matters: Helps frame the urgency and scope of the problem Expected answer: Shift in user preferences or competitive pressure Impact on approach: Would influence the weight given to short-term vs. long-term strategies

• Business Context: Based on Audible's position in the market, I'm thinking this might be about balancing growth and profitability. How does this align with our current fiscal year priorities?

Why it matters: Ensures alignment with overall business strategy Expected answer: Focus on user growth while maintaining healthy margins Impact on approach: Would guide the balance between aggressive pricing and feature-rich offerings

• User Impact: Considering our diverse user base, I'm curious about which user segments we're most concerned with retaining. Can you provide insights into our most at-risk or high-value segments?

Why it matters: Helps tailor solutions to specific user needs Expected answer: Focus on retaining power users or expanding casual listener base Impact on approach: Would influence the feature set and pricing strategy for different tiers

• Technical Feasibility: I'm assuming our platform can support multiple tier structures, but are there any technical limitations or upcoming infrastructure changes we should be aware of?

Why it matters: Ensures proposed solutions are technically viable Expected answer: No major limitations, but potential impact on recommendation algorithms Impact on approach: Might require phased implementation or additional development resources

• Resource Allocation: Given the potential impact on our business model, I'm thinking this might require significant cross-functional effort. What resources are available for implementing and supporting this initiative?

Why it matters: Helps scope the realistic implementation of proposed solutions Expected answer: Dedicated product and engineering teams available, limited marketing resources Impact on approach: Would influence the complexity and rollout strategy of proposed changes