Analytics Help 77Sparx Steer Pricing, Marketing Strategy
77Sparx is a company that designs, develops and distributes learning and phonics games for young children. The company was founded in 2012, at a time of great debate within the games industry about business models. Initially, 77Sparx's games were launched as premium apps, but the market was clearly moving toward freemium. Many of 77Sparx's parent customers were providing feedback that they wanted to try the apps before they purchased them for their children.
However, when 77Sparx weighed the benefits of going freemium, it wasn't sure it was the most responsible choice, considering the products are geared toward young children. To help makes its decision, 77Sparx needed to do some testing to determine what the market acceptance would be for various models and pricing points.
"We needed an analytics tool help us figure out the right business model," recalls Andrew Kao, co-founder and CEO of 77Sparx. "We looked at a number of options, including Flurry, Google Analytics, Mixpanel and Optimizely, and we still use some of those other tools occasionally, but we decided to go with Kissmetrics as our primary platform because of its easy integration, open API, and its ability to present the data in a way that's easy to grasp. Also, Kissmetrics' Analyze product works with what we currently have, rather than requiring us to pull our data back out and re-input it into another system.
"Since Angry Birds has had such great success selling for 99 cents, many app developers have assumed that they have to accept that as a reference point and go with the same pricing," Kao adds. "But we didn't believe that. We believe that we're creating quality digital toys, and that our apps should be priced accordingly as toys. That's an extremely unusual approach in this market. We used Analyze to run extensive tests to determine what the market would support. We ended up at the $14.99 bundled price point, which mirrors the price of an affordable toy, but is much higher than 99 cents."