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Becoming a Mobile Bloomingdale’s: Merchandising Free-to-Play
Should every free-to-play game be a virtual shopping experience? Opinions vary, but if your bread and butter is microtransactions then there’s a strong case for learning how to merchandise. Not everybody will want to implement the same design strategies as Big Win Slots, but this guest post by Alfred Fung of Mobile Deluxe includes some helpful advice about thinking of your game as a department store.
Free-to-play as a revenue model in the mobile games industry has proven itself from companies publically pivoting to titles grossing jaw-dropping daily revenues. Developers seeing these successes and recognizing the low barrier of entry for consumers has created a fervor of “if you build it, they will come”. In all the excitement, developers would release a title, cross their fingers, and pray for monetization. Today, the industry is changing as developers are becoming proactive in merchandising at every phase of a player’s lifecycle and capturing revenue otherwise lost. Each game is effectively becoming a mobile Bloomingdale’s.
Merchandising (display your goods to encourage players to transact)
Trip Hawkins (formerly of EA and Digital Chocolate) offered that comparison at this year’s GDC: “Think about your game like you’re the merchandising manager at Bloomingdale’s”. Instead of relying on players to enter your storefront, you should create purchase opportunities for them in areas of the game which make the most sense. Bloomingdale’s does this with promotional point-of-sale messaging at multiple touch points. Most developers would never think about their game as a department store, but altering that train of thought will reveal those touch points where your players are likely [nay, desire!] to transact. Once you make that paradigm shift, you should then ask yourself: Am I communicating to the right users at the right moments and presenting the right purchase experience?
Segmentation (establish who the right users are to merchandise)
Bloomingdale’s understands who their customers are, and reflects it in everything from its overall brand positioning to a boutique-store layout with relevant labels carrying segment-specific price points. The beauty of mobile today is that we can figure out our relevant segments based on user behavior. Devising segments on specific criteria depends upon your business objective [yes I know we make games, but we’re also running a business]. For example, Big Win Slots has two goals: 1) Upsell existing monetizers; and 2) Convert non-monetizers into monetizers. In establishing segments for upsell, users are targeted according to lifetime purchases in parallel with In-App Purchase (IAP) coin packages. In establishing segments for converting non-monetizers, another target was simply added for those users who have spent $0 in the game thus far. Having identified your goals will ease how you carve out multiple customer groups whom you can then reach through different messages.
Placement (figure out where the right places are to merchandise to your users)
Brick and mortar department stores have clearly defined locations to display offers or special deals. Bloomingdale’s rocks window promotions, floor-to-ceiling banners, and rack sales. Placement is obviously different in mobile and even varies according to game genres, but defining these moments is crucial – placement will greatly influence your message. Discovery of the right moments can entail both playtesting game loops and mining user behavior data; either way, it’s imperative to identify places within the game where users are engaged, frustrated, or ready to exit their session. Once again, it’s important to keep in mind your goals. In the case of Big Win Slots, it was essential to factor in the desire to create unobtrusive placements for upselling existing monetizers as well as obtrusive placements, which would capture the attention of those wily non-monetizers.
Frictionless purchase experience (give the right merchandising messages to the right users at the right moments)
Making a purchase at a Bloomingdale’s is easy. You find the department you like, take a few steps and discover you’re standing next to brands you also find appealing. Executing your transaction is a smile and a card swipe away. Likewise, the developer needs to craft the right messages so that each segment is offered the appropriate transaction at the place with the highest likelihood of conversion. Sound tough? It is in the beginning – but iterating is the key to reducing friction and increasing conversion. Big Win Slots initially ran hard-coded virtual good promotions, but this made it cumbersome to iterate as each change required a resubmission. To accommodate for this, Mobile Deluxe has since partnered with PlayHaven, enabling execution on the right users, right placements, and right messages, all the while providing the flexibility to iterate on the fly. Here are a couple of examples with Big Win Slots:
This message reached Big Win Slots’ monetizers who had spent between $6-$14 within the app and appeared at the moment they ran out of coins. After multiple iterations of the message and creative, conversion rates are now almost 40% – more than three times higher than the original hard-coded upsell.
This virtual good promotion was upsold to non-monetizers and also appeared at the moment the user ran out of coins. This creative also saw numerous iterations and has generated a 50% increase in converting non-monetizers into monetizers.
Advertising (sell other people’s stuff to the right users)
Bloomingdale’s might not be selling every impression for each unique user who walks through their doors [yet!]. But, what if they could sell those eyeballs, and more importantly, what if they could sell only the eyeballs for non-buying browsers? The fact is, not all non-monetizers can be upsold through IAP alone. What about all those users who don’t make a purchase but are also very loyal and play for a long time? There’s an additional dimension to help reach the goal of converting non-monetizers into monetizers: show them ads. While some industry voices will lobby that showing ads may hurt ratings or retention, Mobile Deluxe has experienced little, if any, negative results by showing our loyal non-monetizing base in-app advertisements. Many of these players have been effectively transformed into ad-viewing monetizers as well. [The more interesting story is whether showing ads turns away a potential whale, which Mobile Deluxe is evaluating.]
What does this all mean?
While the free-to-play revenue model continues on with its massive growth phase, each developer has the ability to wrest control of its mobile merchandising. Gone are the days of releasing an app into the wild and hoping the store or advertising rake in the dollars. The viability of free-to-play isn’t just based on the barriers for install being low – it’s also based on the developer’s ability to merchandise its goods after the install to capture value at every phase of a player’s lifecycle. After all, that’s what you’d do if you were the merchandising manager at Bloomingdale’s.