Customers use Alexa skills to remain productive, complete everyday tasks, and simplify the demanding requirements of their day-to-day lives. However, Adrian Risch, co-founder of Healing.fm, wanted to take the opposite approach. He was inspired to help people find a moment of peace in their daily routines. So, he decided to develop Alexa skills that offer a library of ambient sounds to promote mindfulness and relaxation.
"I didn't have a business model at the time. I thought it would be a nice skill to use myself and share with my friends," he says. "It took off and became very popular. And as Alexa has grown, we've grown along with it. We've had millions of customers use our skills over the years."
Starting a successful business on Alexa
When Adrian first heard about Alexa, he was intrigued. "I'm always a fan of new technology," he says. "I thought Alexa would be a real game-changer. It's fun because you're experimenting with new ideas, and customers are looking for services that will suit them."
Working with his co-founder, Richard Stedman, Adrian has developed upward of 30 Alexa skills, including Japanese Garden Sounds and Beach Sounds. The firm that they co-founded, Healing.fm, has grown into a steady business with a team of four employees.
Critical to this growth has been Adrian's strategic use of In-Skill Purchasing (ISP), which gives skill builders the ability to sell digital premium content to customers within their Alexa skills. Customers pay for the premium content using the payment options associated with their Amazon account. He offers enhanced audio quality and longer hours of audio loop sounds as part of his premium content in his skills.
"ISP really helped us make a business out of Alexa," he says. "It brought the first meaningful revenue to the company, which helped us upgrade our hosting and hire dedicated developers to ensure that every skill is top-notch."
Optimizing ISP to drive revenue
Over the years, through trial and error, Adrian has learned what does and doesn't work for integrating ISP and creating premium experiences. Based on his experience designing experiences that help drive customer engagement and revenue, he shares five tips for using ISP to drive revenue.
Tip #1: Choose a free trial period that offers customers the opportunity to evaluate your premium content
No matter the type of skill, Adrian has found it necessary to provide Alexa users with a taste of the premium experience that he wants to monetize. He advises skill builders to customize the duration of the free trial based on customer response.
"We've tried a broad range of time periods to offer the free skill experience from seven days to as long as thirty days," he says. "But we found that a period of two weeks is the perfect timing for users to see if they like the premium versions of our skills."
Tip #2: Keep the upsell message simple and friendly
Adrian played around with the wording of upsell messages, from more formal and grammatically correct messages to snappier and more casual ones. In most cases, he found that a short, friendly upsell message that also summarizes what customers get is most effective.
"Keep the upsell message short and snappy," he says. "It can take a lot of iterations to get to the ideal message, but you'll find that the effort is well worth it."
Tip #3: Present the upsell message early to new customers
To give new users plenty of opportunity to enjoy the skill before purchasing it, Adrian doesn't initiate the upsell message when they launch one of his skills for the first time. However, he also advises against waiting too long to upsell either.
"Our recommendation would be to present the upsell message early to the user," he says. "If a free customer is a free customer for too long, it becomes more difficult to upsell to them."
Adrian's approach has been to set up the upsell message so that it occurs when a user opens one of his skills for the second or third time.
Tip #4: Use analytics on the Alexa Developer Console to optimize upsell and pricing
In fine-tuning his upsell messaging and pricing, Adrian has relied on the analytics available on the Alexa Developer Console to understand how people interact with his skills. "The console has so many details about why people like your skill or why they drop off or how they respond to different upsells or prices," he says.
Adrian often uses Alexa Skills Deals in conjunction with the analytics on the console to see if users are willing to purchase his premium content at a slightly lower price before adjusting the price permanently. Alexa Skills Deals are a self-service way to offer temporary discounts on ISPs. He has found that two dollars is the typical sweet spot for premium experiences, but recommends that skill builders test their way to the ideal price point.
Tip #5: Adapt your pricing strategy for different locales
For pricing premium experiences, Adrian notes that it isn't one-size-fits-all, especially across different locales. He recommends adjusting the pricing so that premium experiences are affordable to customers in different parts of the world. In addition, he has also found that the type of ISP options that customers prefer in each locale varies as well.
"In some markets, the monthly subscription model doesn't work as well as a one-off model," he says. "Every developer should look at each market individually."
He also recommends that skill builders leverage the presence of ISP in multiple locales to extend it to their skills that are available there to maximize their monetization opportunity.
Using ISP effectively, Adrian has turned what started as a hobby into a business that is growing steadily year over year.
"ISP has been an excellent way to create a great company with sustainable revenue. I would encourage developers to bring their ideas to the Alexa platform and participate in monetization to grow their business."
Design an optimal ISP experience by reviewing the Alexa Design Guide.