- Fitbit Smart Coach aims to increase revenue and brand awareness by targeting current Fitbit users in North America aged 30+ to purchase a premium subscription for $49 annually.
- The marketing plan utilizes both paid channels like display ads and owned channels like social media, emails, and device notifications to drive trials of the free 30-day subscription with a goal of 5% converting to paid subscribers.
- Projections estimate $192 million in total subscription revenue over 3 years with marketing costs of $25 million, most of which is spent in the first year to acquire new subscribers through the various channels.
5. 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.
6. “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
7. 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)
8. 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
9. 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
10. ● 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
12. 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
Our target audience actually stays very similar to the Fall quarter’s; men and women who own smartphones, earn high enough income, focus on value, have enough exposure to technology and feel comfortable using it and see some credibility in well-known companies. We’ve added “Fitbit wearable owners” at the top to emphasize the importance of owning a Fitbit wearable to use our new premium services. Geographically, we have most of our customers in North America. And age-wise, they are old enough to have established their careers.
We named our persona Chris as we are targeting both men and women. Chris is 34 and has a high paying job. But the job requires them to sit at their desk all day and the hours are long as well. They bought a Fitbit wearable because they wanted to monitor what they eat and have a visual feedback on how much they move during the day. The problem is they are tired every day after work and just want to sit on the couch and use social sites on their smartphone. They are motivated to do something every 3 days, every other day or even everyday, so they are hoping someone could give them advice as to what they can do on weekends and week nights separately so they can keep themselves more active.
- We are bringing an innovative industry first solution - Fitbit Smart Coach which will increase Fitbit Premium subscription customers.
- The team is optimizing marketing spend across the owned and paid channels with the goal of increasing subscription revenue and brand awareness.
- Our paid advertising is targeting the current Fitbit users and therefore our costs are manageable.
- Our first quarter ask of _5__ million will lead to an estimate revenue of _7__ million.
- Our overall ask of ___25___ million will lead to an estimate revenue of ___ 192___ million from premium subscriptions.
We believe this is a realistic ask because we will always be targeting a known user base based on previous quarter device sales and safe assumptions.