kachingle premium for pc and web app vendors - turbocharged freemium conversions

www.kachingle.com | [email protected] | 650.376.0170 www.kachingle.com | [email protected] | 650.376.0170 19 March 2012 1

Kachingle PremiumTurbocharged Freemium Conversions

Vendor Presentation on SlideShare

For a webinar or private presentation visit www.kachinglepremium.comand fill out the contact form

http://www.kachinglepremium.com/

http://www.kachingle.com/

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Kachingle Premium: What is it?

• A Bundle of complementary, non-competitive 20 Premium apps

We do for the Freemium space what cable TV did for Premium Movie channels – but with 21st century flexibility!

• The Bundle sells for an irresistible, fixed monthly fee of $5 per month

• At KP Subscriber’s option, sign-ups can be automatically shared on Facebook and Twitter

• Intuitive vendor dashboard allows for transparent, real-time auditing

• Revenues are shared amongst app vendors based on KP subscriber access

powered by: Kachingle’s patent-pending micropayment technology



Virtual Bundling – not your Grandparents’ bundles!

Photo courtesy (http://creativecommons.org/licenses/by/2.0/deed.en) of Flickr user ghostdadhttp://www.flickr.com/photos/ghostdad/2335241259

20th century fixed bundling (e.g. cable TV channels) was

• Comprised of defined inflexible packages

• Not usage based revenue

• Producers had no choice of marketing partners

• Subscribers had no choice of channels

21st century virtual bundling (invented by Kachingle) is

• Real-time flexible packages created uniquely by each subscriber on demand

• Usage based revenue

• Producers select their marketing partners

• Subscribers effortlessly build-their-own packages

http://www.flickr.com/photos/ghostdad/2335241259

http://www.flickr.com/photos/ghostdad/



Kachingle Premium

How Subscribers Benefit Incredible Value

Immediate Access

Fixed Monthly Charge

Discover Other Apps

Social Media Friendly

Virtual Bundling

How Vendors Benefit 2x - 5x Revenue Uplift

Larger User Base

Increased Retention

App Usage = Revenue

Subscriber Evangelism Virtual Partnering Easy API Integration

Product Bundling Network Effect Social Media Virality Micropayment Platform



Example – Avira and Kachingle Premium



Effect of Kachingle Premium Across Bundle

170M Total Unique Users

1.7M Paying Users

$13.5M Total Monthly Revenue

170M Total Unique Users

6.7M Paying Users

$30.1M Total Monthly Revenue

Current With KP



The Bottom Line

• Kachingle solves the Freemium conversion problem

o By taking advantage of bundling, a proven marketing strategy

o Subscribers get more value and rapid access to premium offerings

o KP vendors get more revenue and a much larger user bases to co-market to with the KP Partners

• Simple, secure integration with your existing system with our API

• How much revenue uplift can Kachingle Premium get you…?



Revenue Model Overview

• Predicts revenue uplift for any app vendor that joins KP

• Sophisticated model considers:o User base overlap across vendors joining bundleo Number of apps used per user; days/month app is usedo Vendor’s current premium price and conversion rateo Vendor’s KP sign up rate from its own user baseo Cannibalization rate of vendor’s current premium offeringo Network effect – use of vendor app by all KP subscribers

• The following slides show KP revenue impact ono Entire 20 vendor bundle with 170M unique users pre-KPo Representative small, medium and large vendors

• Entire model available to any app vendor considering KP



Revenue Model – Medium Vendor



Revenue Model – Small Vendor



Revenue Model – Large Vendor



Model Inputs: 20 Vendors, 195M non-unique users

Inputs MediumVendor

SmallVendor

LargeVendor

Entire

Bundle

% of total users using only 1 app, pre-KP 80% 80% 80%

Avg. # of apps used by multi-app users, pre-KP 3 3 3

Average KP conversion rate across bundle 4% 4% 4%

Average % of apps used per KP subscriber 20% 20% 20%

Average % of days/month app is used 50% 50% 50%

Vendor Specific

Number of free users pre-KP 9,900,000 9,900 49,500,000

Number of 1st level premium users pre-KP 100,000 100 500,000

Average days/month vendor app is used 15 15 15

Vendor KP Sign-up rate 4% 4% 4%

Cannibalization rate of 1st level premium 90% 90% 90%

% of other KP subscribers that will use app 10% 0.2% 35%

Net $/month from current premium user $4.00 $4.00 $4.00



Next Steps

• Secure your category in the Kachingle Premium bundle

• Choose your Premium version to offer

• Select your virtual marketing partners

• Integrate Kachingle Premium into your site with our easy to use API

• Include the Kachingle Premium option at your web site

• Issue joint press release with Kachingle and the other Premium partners



BONUS SLIDES



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Freemium is not working for all vendors because of…

Fierce Competition The free version needs to be so extraordinary that there is not enough incentive for most users to upgrade to Premium

Low Conversion Rates At ~ 1-2%, Average Revenue Per User (ARPU) is too low for sustainability

High Churn Rates Low Premium user retention requires a continuous stream of new users

Free Users don’t upgrade to premium version because: too much trouble to upgrade right at that moment while the user is busy doing real task too expensive

the premium capabilities they need are not worth the premium price total cost of all the Premium apps they would use is too expensive occasional users don’t want to pay full price

too hard to keep track of multiple subscriptions and credit card charges



Freemium Best Practices• Offer a base-level product people want to rave about. Virality drives

success.

• Prompt user-to-user recruitment with a product that’s more beneficial when shared with others.

• Make offering scalable so serving each new user gets incrementally less expensive.

• Offer a premium-level product that provides meaningful value otherwise difficult to obtain, realizing that many businesses succeed with only single-digit free-to-paid conversion rates.

• Commit to ongoing user interaction in order to adapt and improve offerings, promote usage, inspire evangelism and prompt premium-level purchases.

• Provide users with a reason and easy way to spread the word, recruit new users and grow your audience into one that advertisers and others are willing to pay to reach.

Great advice – but is it actually working?

Schenck, Barbara Findlay. “Freemium: Is the Price Right for Your Company?” Entrepreneur Magazine. February 2011. <http://www.entrepreneur.com/article/218107#> [accessed January 10, 2012].

http://www.entrepreneur.com/article/218107



What If …

• More of your free users started paying you?

• Other app vendors are promoting your app?

• Your users could easily promote you via social media?

• Your users could upgrade to premium with One Click (no carts, no forms, no hassle)

• Your user retention rate increased?

Which of these are most important to you?



How Kachingle Premium Works

• Kachingle places vendor’s app into the Kachingle Premium Bundle

• Vendor offers users the Kachingle Premium Bundle

• Current Kachingle Premium Subscribers accept with ‘single-click’

• A user’s ‘purchase’ is automatically posted to their social media

sites, i.e. “I just signed up for Premium __________”

• Subscriber access is tracked for each app in the Bundle

• Payouts are made in accordance to user usage

• Monthly, vendor payouts are made via PayPal



Vendor Selection

• with 100 Million users is already onboard

o Avira is a leading, worldwide supplier of anti-virus & security solutions for professional and private use

• Criteria:

o Must be one of the top Vendors in their category

o Fits into the “Power User” app space

o Has Freemium offering



Why Kachingle?

• Kachingle’s proven micropayment and back-end technology already exists!

• 3 years of engineering work building Kachingle Anything, a usage-based donation platform, that has been working flawlessly for 2 years

• Top notch experienced team that has been together at Kachingle and other companies for years

• Founders have deep billing, banking, and payment processing in their DNA (BofA, Portal Software)

• Very fast time-to-market

• Anchor tenant – Avira – brings 100M free users to the table

• Usage-based algorithm for the “fair” distribution of revenues

• Patent pending for our usage-based micropayments technology

• Compelling, high-value, user proposition with the flat monthly fee, social recognition, and hassle-free signup

• Special business relationship with PayPal



Partnership with PayPal

Micropayments are strategic for PayPal

They love our approach and understand the Kachingle Premium value proposition

PayPal has supported us in the following ways:

Special pricing on transaction and processing fees

Featured Kachingle in their ad campaign (see below)

Direct access to their customer base

Immediate access to engineering support


kachingle premium for pc and web app vendors - turbocharged freemium conversions

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