Social-media website successfully transitions business model from free to freemium with RJMetrics
HootSuite is an award-winning social media dashboard and analytics tool with over 2 million users. Released in December 2008, it caters to a varied clientele including individuals, organizations, governments, SMB businesses, as well as Fortune 500 Enterprises. Using HootSuite, users can manage and track their social media, including Facebook, Twitter, LinkedIn, Foursquare, and WordPress, in one central dashboard. The Obama administration, Facebook, and Mashable are among its many users.
Business Problem
HootSuite began as a free service and in 2010, transitioned to a freemium model, charging for advanced features but leaving the basic version of its application free. To ensure that they made the correct strategy decisions as they engaged in the transition, HootSuite needed an analytics solution that could provide insight into their users’ behavior. Daniel Mathews, Data Analytics Manager at HootSuite, recalls “Before RJMetrics, we didn’t do a lot of data analysis. If we had to, our developers had to spend a lot of time doing ad hoc data pulls. But we wanted to allow our developers to get back to building HootSuite instead of pulling data for business intelligence”.
HootSuite initially planned to introduce a free option and four premium tiers – Bronze, Silver, Gold and Platinum. Mathews recalls that when HootSuite tried their five-tier freemium model, “We experienced a significant dropoff in both free and paid signups. We could see right away that we didn’t package it properly.” HootSuite decided to shift their strategy, and embarked on a new plan to separate their customers into two main pools – 5% into a paid pool, and 95% into a free one. This time, they wanted to conduct a bucket analysis to determine how many users fell into each of their tiers and test different combinations.
Solution: RJMetrics
HootSuite contacted RJMetrics to help them better understand their customer base and identify the behavior of their top 5% heaviest users. Mathews recalls that “with the RJMetrics dashboards in place, we segmented customers easily by key metrics – x% of customers used these social networks, or x% sent messages, or x% added team members. We also able to eliminate dimensions that were poor for customer segmentation.” Using RJMetrics, HootSuite found a set of features that best differentiated what consumers and business would use HootSuite for. Ultimately, the ability to add unlimited Social Networks, RSS feeds, Team Members, Advanced Statistics were ultimately used as the criteria for differentiating their customers. Using this information, HootSuite decided to retry their freemium offering with three plans – a free option, a paid “Pro” option and an Enterprise plan.
This time, HootSuite not only saw their free sign-up rates go back to their historical rates but also saw paid sign-ups increase as well. Today HootSuite continues to use the plans and feature segmentation identified in RJMetrics.
Ongoing Value and Support
Having undergone a
successful transition from ad-supported to freemium, Mathews continues to use
RJMetrics every day. “I setup an overview dashboard, which gives me
up-to-date insight into micro and macro trends on recently created accounts.
We also have other broad overview dashboards that are available to
everyone in the company.” He adds, “The marketing team gets a daily
RJMetrics summary email on user sign-ups, and the sales team uses RJMetrics’
data export functionality to follow up on new leads. RJMetrics can be
used by every department in a company, which you can’t say about many tools”.
With millions of
users, and data on hundreds of millions of user actions, HootSuite knows that
its large, growing data set can become more and more time-consuming to work
with. At Mathews’s request, RJMetrics
introduced an intelligent data sampling feature that enabled HootSuite to pull
metrics and make decisions in almost real-time. As HootSuite’s user base has
continued to grow, this new feature has been critical.
Mathews spoke highly
of RJMetrics support. “They’ve helped us build everything out to our
level of scale”. He estimates that if not for RJMetrics, accessing the
business data he routinely requires would be a full time job for developers. “We
save a lot of money using RJMetrics, and our developers are able to focus on
making our product the best it can be.”
For more information about HootSuite, visit HootSuite.com and blog.hootsuite.com.
If you are interested in learning more about RJMetrics you can learn How it Works, read the latest post at our blog, The Metric System, or sign up for a demo below.
