Dissecting Lingvano's Profit Puzzle: A Guide to Understanding App Conversion and Reducing Losses

The Lingvano app, dedicated to facilitating American Sign Language (ASL) learning, has recently caught my attention. Although it boasts an impressive download rate, its financial performance leaves much to be desired. It seems to struggle with generating a revenue commensurate with its user base, which casts a shadow over the sustainability of its team and marketing efforts.

In July, Lingvano was downloaded approximately 200,000 times, generating only $200K, translating to a mere $1 per user. This may not be a strict rule, but typically, the cost of an app's annual plan signifies the average cost per acquisition (CPA).

For Lingvano, the annual subscription stands at $119. If we consider that the app earned $200K last month, it indicates that about 1,680 users have purchased subscriptions - a conversion rate from download to purchase of only 0.9%. This figure is alarmingly low for the market.

For Lingvano, the annual subscription stands at $119. If we consider that the app earned $200K last month, it indicates that about 1,680 users have purchased subscriptions - a conversion rate from download to purchase of only 0.9%. This figure is alarmingly low for the market.

While I've excluded monthly subscriptions for simplicity, a few assumptions come into play. Generally, the ratio between yearly and monthly subscriptions is around 9:1, with the price of the monthly subscription being significantly lower relative to the annual.

What might be the cause of this low conversion rate? Let's delve deeper.

Onboarding

Every screen that does not require data input sees a 1% user drop-off. With Lingvano, there are eight such screens. On data entry screens, the drop-off jumps to 20%.

By the time users reach the paywall, only 72% are still engaged. However, it doesn't seem like the issue lies here.

Paywall

This is where problems start to crop up. Lingvano has an incredible opportunity to customize its paywall to match the needs of each user segment. Yet, it opts for a one-size-fits-all paywall design popularized by Blinkist, which simply eases the fear of forgetting to cancel the trial. While novel in 2020, this design has lost its charm as users grow skeptical about receiving a reminder to cancel their trial.

It's unlikely that anyone would agree to pay $119 without first knowing what's inside. Therefore, the paywall may be more of a barrier than a gateway.

Inside the App

The first day in the app is free.

On the second day, when a subscription is required, retention rates typically drop to 20% for educational apps.

That means only 72% x 20% = 14% of those who downloaded the app remain. Of this group, 20% will initiate a trial, and 30% will commence a subscription. This brings us back to the 0.84% conversion rate we calculated earlier.

Rethinking the Approach

Upon analyzing Lingvano's current advertising campaigns, I've found that they target only ASL enthusiasts. These ads promote learning ASL purely for recreational purposes. Also, the ads claim the app is free, which isn't the case, leading to a lot of disgruntled reviews about users feeling duped.

By not being upfront about the app being paid, advertising budget is wasted on attracting users who can't afford the $119 subscription.

Refining User Segmentation Strategy

To maximize efficiency, we need to segment our users based on the reviews they've left. I identify three main user segments:

1. Deaf/Hard of Hearing Users: Those who are deaf or hard of hearing and want to enhance their ASL skills.
2. Family/Friends of Deaf Individuals: Users who know someone who is deaf or hard of hearing and wish to communicate better with them.
3. ASL Enthusiasts: Individuals learning ASL as a hobby or due to interest in the language and deaf culture.

By segmenting users at the onboarding stage, we can personalize the paywall experience for each group.

New Paywalls

Personal development

For the deaf users, I would implement a "pay-what-you-can" model. This approach aligns with Lingvano's mission of making ASL learning accessible.

Family communication

For the second segment, the family/friends of deaf individuals, a higher price point could be justified through a family plan. This acknowledges that multiple users would likely be interested in a single subscription

Hobby/interest

For this segment, we could promote the idea that their subscription not only contributes to helping deaf individuals but also supports our deaf teachers. They're not just pursuing a hobby, they're contributing to a cause. Their subscription becomes an act of support and solidarity with the deaf community, making their learning journey all the more fulfilling.

Their passion for American Sign Language becomes an agent of change, facilitating better lives for our educators and fostering an inclusive learning environment.