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Mike Hines, Amazon

Understanding Power Users and How to Attract Them

(White Nights Conference St. Petersburg 2017)
The official conference website — http://wnconf.com

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Mike Hines, Amazon

  1. 1. @MikeFHines MobileDevMikeHines UNDERSTANDING YOUR POW ER -USERS AND GETTING MORE MIKE HINES D E V E L O P E R E V A N G E L I S T, A M A Z O N
  2. 2. A B O U T M ike Hin es Amazon Appstore @MikeFHines Founder @ 2 Financial Services Startups Founder @ 2 Software Startups QA Engineer @ Now Software QA Manager, Product Manager @ Microsoft Evangelist @ Amazon.com Mentor @ GameFounders, Dev Bootcamp Games Judge @Casual Connect Indie Prize, White Nights, and Pocket Gamer Very Big Indie Pitch Speaker @ GDC, GDCE, Casual Connect, Pocket Gamer Connects, AnDevCon, White Nights, CES, PAX Dev
  3. 3. iPHONEiPAD GOOGLE PLAY AMAZON 47.7%57.1% 36.5%64.2% 66.0% 26.3% 7.7% SHARE OF MOBILE GAME SPENDERS PER APPSTORE US, UK, GER, FR 2014 LEVEL OF SPENDING AMONGST ALL MOBILE GAME SPENDERS PER APPSTORE US, UK, GER, FR 2014 56.3% 34.9% 8.7% 64.9% 28.2% 7.0% 58.1% 33.1% 8.1% % Minor Spenders % Average Spenders % Big Spenders © 2014 Newzoo | Source: Newzoo Data Explorer Source: Newzoo Trend Report Spotting The Mobile Spenders A M A Z O N R E A C H E S ( B I G ) S P E N D E R S B E S T
  4. 4. POWER USERS The vital few 1
  5. 5. P O W E R U S E R S : T H E V I TA L F E W WELL-KNOWN ACROSS INDUSTRIES POWER USERS ARE NOT NEW M o b i l e G a m i n g i s n ' t t h e f i r s t i n d u s t r y t o r e c o g n i z e t h e i m p o r t a n c e o f h i g h l y e n g a g e d c u s t o m e r s .
  6. 6. P O W E R U S E R S : T H E V I TA L F E W SUBSTANTIAL SPENDERS SPEND ON THE THINGS T H E Y L O V E When it comes to th eir p assion ( wh atever it may b e) , power -users spend more mon ey th an th e average fan .
  7. 7. P O W E R U S E R S : T H E V I TA L F E W THE PARETO PRINCIPLE KNOWN EARLIER AS T H E 8 0 - 2 0 R U L E In 1941, Joseph M. Ju ran gen eralized th e con c ept of th e "vital few," which he n amed after V ilfred o Pareto .
  8. 8. P O W E R U S E R S : T H E V I TA L F E W WHALES, DOLPHINS, MINNOWS CASINO DEFINED COMMON TERMS Mon etization strateg y is segmented, based on different c u stomer exp erien c es at d ifferent p ric e p oints . F reemiu m: Min n ows = 9 0 -9 8 % of u sers Dolp h in s = 5 0 % of reven u e Whales = 3 -4% of paying users ( <0 .1 % total)
  9. 9. P O W E R U S E R S : T H E V I TA L F E W THE NUMBERS VARY, BUT… SEGMENTATION IS SIMILAR • Newzoo: 3.5% of U.S. mobile gaming customers generate 33% of sales • Google: 1% of U.S. customers generate 14% of monthly sales • Kongregate: 0.1% of U.S. customers generated 53% of all time sales Top 1% of customers who spend on mobile Sources: Google, Casual Connect July 2014; Kongregate, GDC March 2015
  10. 10. AMAZON’S PERSPECTIVE 2
  11. 11. A M A Z O N ’ S P E R S P E C T I V E THE VITAL FEW AND USEFUL MANY EVERY CUSTOMER HAS VALUE Non -spenders are important. Th ey can b e: • Potential p ower -u sers • Influencers and advocates • Eyeb alls for ad vertisin g
  12. 12. A M A Z O N ’ S P E R S P E C T I V E W H A L E I S P R E J O R AT I V E P O W E R U S E R V S . W H A L E Nicholas Lovell, author of The Curve, differentiates: • Ethical: Customer spends because they love what you do • Unethical: Customer spends because of who they are We prefer the term "power-user" to describe the avid hobbyist who loves your work.
  13. 13. A M A Z O N ’ S P E R S P E C T I V E AMAZON APPSTORE POWER USERS WHAT DO THEY LOOK LIKE TO US? • Spend $50/ month or more • O n average, sp en d >$ 2 0 0 / month • Are concentrated in US, Jap an , UK, an d Germany
  14. 14. A M A Z O N ’ S P E R S P E C T I V E F O C U S E D PA S S I O N POWER-USERS ARE LOYAL T O A F E W A P P S 80% of customers who sp ent $ 1 0 0 0 in Jan u ar y, 2 0 1 5 sp ent 75% ( or more) of that on ju st two titles.
  15. 15. A M A Z O N ’ S P E R S P E C T I V E CANDY CRUSH SAGA POWER-USERS LOVE ALL K I N D S O F A P P S MMOs are trad ition ally assoc iated with power -users, but King h as exp an d ed ou r view of wh at is p ossib le.
  16. 16. A M A Z O N ’ S P E R S P E C T I V E GAME OR WAR: FIRE AGE POWER-USERS LOVE ALL K I N D S O F G A M E S Similarly, Machine Zone h as h ad su c c ess in a comp letely d ifferent genre.
  17. 17. WHY SHOULD YOU CARE? 3
  18. 18. A M A Z O N ’ S P E R S P E C T I V E A R P U A N D A R P P U NOT ALL IMPORTANT METRICS A R E C O M P L E T E Averages are most u sefu l wh en d ata h as a n ormal d istrib u tion ( Bell c u r ve) . For examp le: • Hu man life -sp an or b lood pressure • Nu mb er of p etals on a d aisy • Clou d y d ays in S eattle
  19. 19. AMAZON’S PERSPECTIVERevenue User Rank Revenue by User Best-described by a power law, in which one value (such as revenue) varies as a power of another (such as rank). APP REVENUE HAS HIGH VARIANCE
  20. 20. A M A Z O N ’ S P E R S P E C T I V E IMPACT ON OTHER METRICS R E V E N U E D I S T R I B U T I O N I F N L U E N C E S A N A L Y S I S O ptimize th e fu n n el, b u t look for emergent b eh avior amon g p ower -u sers an d tu n e th ose p athways. • Prioritize featu res ac cord in g to monetization segment • Desig n sep arate A |B tests • Id entif y h ig h est -imp ac t flows
  21. 21. IT’S ALL ABOUT EMOTION 4
  22. 22. I T ’ S A L L A B O U T E M OT I O N P E R S O N A L E X P R E S S I O N W H A T Y O U B U Y S A Y S SOMETHING ABOUT YOU Th e med ia you con su me exp resses wh o you are, an d you r emotion al con n ec tion in sp ires th e willin g n ess to p ay.
  23. 23. I T ’ S A L L A B O U T E M OT I O N K R I T I K A : T H E W H I T E K N I G H T S GAMEVIL OFFERS AVATARS THAT APPEAL TO COLLECTORS
  24. 24. I T ’ S A L L A B O U T E M OT I O N STAND OUR OR FIT IN? CONNECT WITH WHO OR W H A T Y O U A D M I R E Go b ig : Id entif y with someon e, a b road er commu n ity, or someth in g th at in sp ires you . Go small: E stab lish you rself as p art of an elite trib e .
  25. 25. I T ’ S A L L A B O U T E M OT I O N S T A T U S U P D A T E TELL THE WORLD WHY Y O U ’ R E G R E A T Hig h lig ht you r ac comp lish ments or soc ial statu s. Pu rc h ases ac t as a b ad ge of ac h ievement, or a u n iform comman d in g respect.
  26. 26. I T ’ S A L L A B O U T E M OT I O N EMOTION AND SPENDING U N D E R S T A N D T H E C O N N E C T I O N Kn owin g why th ey b u y is c ritical to makin g you r ap p attrac tive to p ower -u sers — an d more imp ortantly, worthy of th em.
  27. 27. BEFORE, DURING AND AFTER 5
  28. 28. B E F O R E , D U R I N G A N D A F T E R B E F O R E D E S I G N F O R Y O U R P O W E R - U S E R S • Foster early en gagement • Message at th e rig ht time • Keep th em in th e ap p • Keep th em comin g b ac k • Use ser ver -sid e ac cou nts
  29. 29. B E F O R E , D U R I N G A N D A F T E R D U R I N G L E T YO U R C ATA L O G SUPPORT THEIR DESIRES • Self -expression / aesth etic s • A b ility • Status / collection • Mon ey for time • Pric e d istrib u tion
  30. 30. Source: Amazon Appstore, March 2014 31% 29% 7% 12% 11% 5% 3% 1% 14% 11% 6% 3% 16% 16% 11% 9% 0% 5% 10% 15% 20% 25% 30% 35% $0.99 $1.99 $2.99 $4.99 $9.99 $19.99 $49.99 $99.99 % of Assortment % of Sales ASSORTMENT BY PRICE POINT Total Marketplace
  31. 31. 28% 15% 10% 13% 11% 9% 9% 5% 32% 19% 7% 4% 10% 12% 5% 4% 0% 5% 10% 15% 20% 25% 30% 35% $0.99 $1.99 $2.99 $4.99 $9.99 $19.99 $49.99 $99.99 % of Assortment % of Sales Source: Amazon Appstore, March 2014 ASSORTMENT BY PRICE POINT Top 50 Only
  32. 32. B E F O R E , D U R I N G A N D A F T E R A F T E R GROW WITH THE CUSTOMER • Un d erstan d p ric e sen sitivity • E xp an d you r catalog ( keep it fresh ) • Limit p ric e p oints to clarif y value • Treat all c u stomers well!
  33. 33. 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 1 4 7 10 13 16 19 22 25 28 Source: Amazon Appstore, July 2013 Days Owned +60% average selling price REGULAR CUSTOMERS SPEND MORE Price Sensitivity Declines over Time
  34. 34. B E F O R E , D U R I N G A N D A F T E R A F T E R GROW WITH THE CUSTOMER • Un d erstan d p ric e sen sitivity • E xp an d you r catalog ( keep it fresh ) • Limit p ric e p oints to clarif y value • Treat all c u stomers well!
  35. 35. 69% 100% 145% 0% 20% 40% 60% 80% 100% 120% 140% 160% 1-5 Items 6-10 Items 11-15 Items Source: Amazon Appstore, March 2014 # of In-App Items for Sale ARPPU INDEX: Average = 100% SELECTION DRIVES REPEAT ORDERS More Is Better
  36. 36. B E F O R E , D U R I N G A N D A F T E R A F T E R GROW WITH THE CUSTOMER • Un d erstan d p ric e sen sitivity • E xp an d you r catalog ( keep it fresh ) • Limit p ric e p oints to clarif y value • Treat all c u stomers well!
  37. 37. Conversion Rate INDEX: Average = 100% DON’T CONFUSE YOUR CUSTOMER OFFER VARIETY, BUT NOT TOO MUCH Source: Amazon Appstore, March 2014 147% 101% 52% 0% 50% 100% 150% 200% 1-5 Price Points 6-10 Price Points 11-15 Price Points
  38. 38. B E F O R E , D U R I N G A N D A F T E R A F T E R GROW WITH THE CUSTOMER • Un d erstan d p ric e sen sitivity • E xp an d you r catalog ( keep it fresh ) • Limit p ric e p oints to clarif y value • Treat all c u stomers well!
  39. 39. AMAZON CAN HELP 6
  40. 40. iPHONEiPAD GOOGLE PLAY AMAZON 47.7%57.1% 36.5%64.2% 66.0% 26.3% 7.7% SHARE OF MOBILE GAME SPENDERS PER APPSTORE US, UK, GER, FR 2014 LEVEL OF SPENDING AMONGST ALL MOBILE GAME SPENDERS PER APPSTORE US, UK, GER, FR 2014 56.3% 34.9% 8.7% 64.9% 28.2% 7.0% 58.1% 33.1% 8.1% % Minor Spenders % Average Spenders % Big Spenders © 2014 Newzoo | Source: Newzoo Data Explorer Source: Newzoo Trend Report Spotting The Mobile Spenders A M A Z O N R E A C H E S ( B I G ) S P E N D E R S B E S T
  41. 41. ANDROID PHONES & TABLETS FIRE TV & FIRE TV STICK BLACKBERRYFIRE TABLETS
  42. 42. M O R E WAY S TO M O N E T I Z E PREMIUM ADS SELL T-SHIRTS GET PAID FOR EVERY MINUTE OF APP USEIN APP PURCHASE
  43. 43. TAKEAWAYS 7
  44. 44. TA K E AWAY S T H E G O O D S T U F F : P O W E R U S E R S • Power-Users drive revenue • Any user may become a power-user • They spend on what they love
  45. 45. TA K E AWAY S T H E W O R K P A R T : P O W E R U S E R S • Plan for them Engage early; don't distract; keep them coming back • Support their (emotional) choices Self-expression; collecting; status; advancement; optimization • Grow with them Keep catalog fresh; clarify value; offer several price points
  46. 46. THANK YOU! Mike Hines mihines@amazon.com @MikeFHines Facebook.com/MobileDevMikeHines http://bit.ly/MikeHinesDevTools

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