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Fitbit Go-To Market Plan

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Go-To market plan for new Fitbit Premium Subscription

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Fitbit Go-To Market Plan

  1. 1. Agenda
  2. 2. Fitbit Smart Coach
  3. 3. Go To Market Objectives
  4. 4. Target Audience ● Owns a Fitbit wearable and a smartphone ● Value conscious but has expendable income ● Is comfortable with technology but not necessarily an expert ● Uses social media frequently ● More comfortable buying from well-known companies ● Lives in North America ● 30+ Persona: Chris ● Has a desk job ● Earns 100K+ per year ● Willing to pay for a product that received good reviews on improving health habits ● Uses a smartphone and often visits social sites to post comments and images ● Wants to work out more regularly ● Is 34 and lives in the U.S.
  5. 5. “Get More With Fitbit” - Campaign Flow Use both paid and owned channels to target current FitBit users w/o paid subscription. Display Ads (Retargeting) Premium Subscription Landing Page 30 Day Free Trial Paid Subscription ($49 annual) Paid Push Notification Owned (Little or No Additional Cost) Newsletter and Announcements (email) Display Ads (FitBit.com) Social Channels Device Box Inserts
  6. 6. Direct Marketing Conversion No commitment 30 day free trial will result in high conversion to trial. Premium Subscription Landing Page 30 Day Free Trial Paid Subscription ($49 annual) Paid Click Thru Rate: 0.8% Conversion: 30.0% Conversion: 5.0% No commitment Opt in ● Impressions per paid: 8,333 ● Impressions per trial: 417 ● Using CPM rate of $5.00 o Cost per conversion: $41.67 (max is $56.49) o Cost per trial: $2.08 (max is $2.82) ● Max = 50% of 3 year subscription ● We will monitor conversion to trial rates and adjust CPM buys to stay below maximum. Display Ads (Retargeting)
  7. 7. Model Details ● Optimizing spend with use of owned channels ● Using retargeting techniques to focus on device owners o Retargeting spend tied to device sales ● Increase awareness with retail fixture and box inserts ● Seasonal adjustments ● Compounding effect of renewals
  8. 8. Projections Q4 2014 2015 2016 Devices Sold (Million Units) 2.5 13 33 New Subscriptions (Owned Channels) 125,338 811,552 2,013,380 Total New Subscriptions 132,161 846,701 2,100,775 Subscription Revenue $6.61M $46.95M $138.35M Marketing Cost $5.55M $7.79M $11.77M
  9. 9. ● Fitbit Smart Coach will increase revenue and brand awareness ● Target market is current Fitbit users ● Overall Marketing ask: $25 million o - First quarter marketing ask: $5 million ● Estimate revenue: $192 million Summary
  10. 10. Appendix
  11. 11. Paid Marketing: Maximum Acquisition Cost Allow higher acquisition costs since majority of new subs will be from owned channels and subscription also benefit hardware sales ● Maximum acquisition cost is 50% of lifetime value = $56.49 o 50% of 3 years of subscription ($110.74) o Y1 ($49.99) + Y2 ($34.99 - 70%) + Y3 ($27.99 - 80%) = $112.98 ● Premium subscriptions brings additional value o Differentiates Fitbit and Increases perceived value of band o User with premium have higher loyalty (plus years of data) ● Risk of higher cancellation rate: Address with on-line pre-expiration campaigns to increase engagement before renewal
  12. 12. Sensitivity Analysis: Cost per Trial CPM Impressions per Trial (IPT) 400 500 600 700 800 900 1000 1100 1200 $2.50 $1.00 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $3.00 $2.75 $1.10 $1.38 $1.65 $1.93 $2.20 $2.48 $2.75 $3.03 $3.30 $3.00 $1.20 $1.50 $1.80 $2.10 $2.40 $2.70 $3.00 $3.30 $3.60 $3.25 $1.30 $1.63 $1.95 $2.28 $2.60 $2.93 $3.25 $3.58 $3.90 $3.50 $1.40 $1.75 $2.10 $2.45 $2.80 $3.15 $3.50 $3.85 $4.20 $3.75 $1.50 $1.88 $2.25 $2.63 $3.00 $3.38 $3.75 $4.13 $4.50 $4.00 $1.60 $2.00 $2.40 $2.80 $3.20 $3.60 $4.00 $4.40 $4.80 $4.25 $1.70 $2.13 $2.55 $2.98 $3.40 $3.83 $4.25 $4.68 $5.10 $4.50 $1.80 $2.25 $2.70 $3.15 $3.60 $4.05 $4.50 $4.95 $5.40 $4.75 $1.90 $2.38 $2.85 $3.33 $3.80 $4.28 $4.75 $5.23 $5.70 $5.00 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $5.25 $2.10 $2.63 $3.15 $3.68 $4.20 $4.73 $5.25 $5.78 $6.30 $5.50 $2.20 $2.75 $3.30 $3.85 $4.40 $4.95 $5.50 $6.05 $6.60 $5.75 $2.30 $2.88 $3.45 $4.03 $4.60 $5.18 $5.75 $6.33 $6.90 $6.00 $2.40 $3.00 $3.60 $4.20 $4.80 $5.40 $6.00 $6.60 $7.20 $6.25 $2.50 $3.13 $3.75 $4.38 $5.00 $5.63 $6.25 $6.88 $7.50 $6.50 $2.60 $3.25 $3.90 $4.55 $5.20 $5.85 $6.50 $7.15 $7.80 $6.75 $2.70 $3.38 $4.05 $4.73 $5.40 $6.08 $6.75 $7.43 $8.10 $7.00 $2.80 $3.50 $4.20 $4.90 $5.60 $6.30 $7.00 $7.70 $8.40 $7.25 $2.90 $3.63 $4.35 $5.08 $5.80 $6.53 $7.25 $7.98 $8.70 Will adjust CPM based on IPT to keep costs per trial below $2.82 (expect $2.08)
  13. 13. Box Inserts - Quarterly Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 New Devices 2,500,000 3,375,000 1,875,000 1,875,000 6,250,000 8,437,500 4,687,500 4,687,500 15,625,000 Trials 750,000 1,012,500 562,500 562,500 1,875,000 2,531,250 1,406,250 1,406,250 4,687,500 Subscriptions 37,500 50,625 28,125 28,125 93,750 126,563 70,313 70,313 234,375 Revenue $1,874,625 $2,530,744 $1,405,969 $1,405,969 $4,686,563 $6,326,859 $3,514,922 $3,514,922 $11,716,406 Box Insert Cost $225,000 $303,750 $168,750 $168,750 $562,500 $759,375 $421,875 $421,875 $1,406,250 30% trial rate, 5% conversion rate
  14. 14. Email Newsletter - Quarterly Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Opens 2,711,059 2,888,681 2,051,732 2,172,912 6,638,951 7,125,761 5,063,271 5,375,226 16,490,654 Clicks 94,887 101,104 71,811 76,052 232,363 249,402 177,214 188,133 577,173 Trials 28,466 30,331 21,543 22,816 69,709 74,820 53,164 56,440 173,152 New Subscriptions 1,423 1,517 1,077 1,141 3,485 3,741 2,658 2,822 8,658 Revenue $71,151 $75,813 $53,847 $57,028 $174,238 $187,014 $132,884 $141,071 $432,793 Subscription Rate (Opt Out) 50% Trial Rate 30% Open Rate 24% Trial Conversion Rate 5% Click Rate 3.50%
  15. 15. Push Notifications - Quarterly Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Opened Notifications 2.8M 4M 4.2M 4.5M 6.9M 9.9M 10.6M 11.2M 17.2M Trials 847,206 1,203,617 1,282,333 1,358,070 2,074,672 2,969,067 3,164,544 3,359,516 5,153,329 New Subscriptions 42,360 60,181 64,117 67,903 103,734 148,453 158,227 167,976 257,666 Revenue $2.1M $3.0M $3.2M $3.4M $5.2M $7.4M $7.9M $8.4M $12.9M 50% of customers open a notification, 30% trial rate once open, 5% trial conversion rate
  16. 16. Fitbit.com Display Ads - Quarterly Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Addressable Users 5.65M 8.02M 8.55M 9.05M 13.83M 19.79M 21.10M 22.40M 34.36M Impressions 147M 209M 222m 235M 360M 515M 549M 582M 893M Click Throughs 2.94M 4.17M 4.45M 4.71M 7.19M 10.29M 10.97M 11.65M 17.86M Trials 881,094 1,251,762 1,333,626 1,412,393 2,157,659 3,087,830 3,291,126 3,493,897 5,359,462 New Subscriptions 44,055 62,588 66,681 70,620 107,883 154,391 164,556 174,695 267,973 Revenue $2.20M $3.13M $3.33M $3.53M $5.39M $7.72M $8.23M $8.73M $13.40M Visits per week per device 2 CTR on Display Ads 2% Display Ad Trial Rate 30% Trial Conversion Rate 5%
  17. 17. Retargeting - Quarterly Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Imp.s/ Customer 10 10 5 3 10 10 5 3 10 Max Spend $284,296 $407,814 $218,340 $138,286 $700,113 $1,010,597 $542,091 $343,818 $1,744,968 New Subs 6,823 9,788 5,240 3,319 16,803 24,254 13,010 8,252 41,879 Revenue $341,087 $489,279 $261,955 $165,910 $839,967 $1,212,474 $650,380 $412,499 $2,093,543 CPM 5 Conversion Rate 5% CTR 0.80% Cost Per Conversion $41.67 Trial rate 30%
  18. 18. Costs - Quarterly Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Retail Fixture Costs $5,020,000 $5,020,000 $5,020,000 Creative Costs $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Box Insert Cost $225,000 $303,750 $168,750 $168,750 $562,500 $759,375 $421,875 $421,875 $1,406,250 Retargeting $284,296 $407,814 $218,340 $138,286 $700,113 $1,010,597 $542,091 $343,818 $1,744,968 Total New Subscribers 132,161 184,698 165,240 171,108 325,655 457,403 408,764 424,057 810,551 Renewals - - - - 92,513 129,289 115,668 119,775 301,969 Total Subscriptions 132,161 184,698 165,240 171,108 418,168 586,691 524,433 543,832 1,112,520 Subscription Revenue (Millions) $6.61 $9.23 $8.26 $8.55 $20.90 $29.33 $26.22 $27.19 $55.61 Marketing Ask (Millions) $5.55 $0.74 $0.41 $0.33 $6.31 $1.79 $0.99 $0.79 $8.20

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