Is Snapchat Plus Worth the Price?

Snapchat, the short-living messaging app, launched Snapchat Plus in June 2022 as a subscription service offering exclusive features.

This case study dives into the value proposition of Snapchat Plus for users, analyzing its features, user demographics, and potential impact on user engagement and platform revenue.

Deep Dive into Snapchat Plus Features: Value for Different Users

Let’s take a deep dive into the features and value propositions of Snapchat Plus.

Exclusive Access

Snapchat for Web

This feature allows users to access Snapchat from their computer browser, offering a larger screen experience for sending snaps, chatting, and managing stories.

This can be particularly valuable for power users who spend a significant amount of time on their computers and want a more seamless way to interact with Snapchat.

Story Rewatch Indicator

Intrigue and engagement are key aspects of Stories. Plus users can see who rewatched their stories, potentially providing insights into which content resonates most with their audience.

This can be especially interesting for creators who use Snapchat Stories for personal branding or marketing purposes.

Customization:

Pin a Best Friend (BFF)

Snapchat prioritizes close connections. Pinning a BFF ensures their chat stays at the top of the chat list, offering easier access to frequent conversations.

Chat Wallpapers

Personalize the chat experience with friends by setting custom wallpapers for each conversation. This can add a fun and unique touch to communication.

Control & Expression

Exclusive Badges and Ghost Emojis

Snapchat Plus subscribers get access to a special set of badges displayed next to their profile picture and unique ghost emojis to use in chats.

These exclusive elements allow users to express themselves in a way not available to free users, potentially fueling a sense of individuality and status.

Differentiating the Value Proposition Based on Different Users

• Casual Users: Free users have access to the core Snapchat experience of sending snaps, chatting, and creating stories. For casual users who interact on the platform occasionally, the additional features of Plus might not be essential and may not justify the subscription cost.

• Power Users: Highly engaged users who frequently use Snapchat's core features and crave additional functionality will likely find more value in Plus. Features like Story rewatches, Snapchat for Web, and exclusive customization options can significantly enhance their Snapchat experience.

• The "Cool Factor": Social media is driven by trends and social currency. For some users, the exclusivity associated with Plus badges and ghost emojis might be a major draw, even if the features themselves offer limited utility. Owning these exclusive elements can elevate their social status within their Snapchat circle.

Understanding Snapchat Plus Target Users: Age, Value, and Subscription Propensity

The success of Snapchat Plus hinges on understanding who will find value in the subscription.

This section dives into the core demographics of Snapchat users, their propensity towards subscriptions, and how Snapchat can tailor the value proposition of Plus to resonate with this specific audience.

Core Demographic

Snapchat's core demographic falls within the 13-34 age range, with 75% of daily users concentrated here according to Snap Inc. This age group, encompassing Gen Z and Millennials, is known for being:

• Tech-Savvy: They've grown up with technology and are comfortable using a variety of digital tools and platforms.

• Value-Conscious: Financial independence is often still developing, making them particularly sensitive to pricing and subscription costs.

• Trend-Oriented: Social influence and keeping up with the latest trends are often important.

• Privacy-Focused: They value platforms that offer control over their online presence and data.

Subscription Propensity and Snapchat Plus

Understanding how this demographic typically approaches subscriptions is crucial for evaluating the value proposition of Snapchat Plus:

• Free vs. Paid Preference: Free-to-play and freemium models are prevalent in mobile apps, and this generation is accustomed to accessing basic functionalities for free. They might be hesitant to pay for features, especially if the free version offers a satisfactory experience.

• Subscription Fatigue: Many young people juggle subscriptions for various services like music streaming, video games, and food delivery. Adding Snapchat Plus to this mix requires a compelling value proposition.

• Perceived Value: The features offered by Snapchat Plus need to be demonstrably valuable to this age group. Features like story rewatches and web access might not resonate as strongly for casual users compared to power users.

Tailoring the Value Proposition

Snapchat can address these considerations by:

• Highlighting Utility: Emphasize how Plus features enhance the user experience, such as increased control over stories, improved communication with friends, and a more personalized chat environment.

• Social Currency: Play on the "cool factor" of exclusive badges and ghost emojis. These elements can build a sense of social status and differentiation within their Snapchat circles.

• Targeted Marketing: Segment users based on engagement levels and tailor marketing messages showcasing the features most relevant to each segment. For example, highlight web access for students who primarily use Snapchat on their computers.

• Free Trials and Bundles: Offer free trials of Snapchat Plus to allow users to experience the value firsthand. Consider bundling Plus with other Snapchat features or in-app purchases to create a more attractive package.

By understanding the unique characteristics of their core demographic, Snapchat can refine the value proposition of Snapchat Plus and make it a more compelling option for a wider range of users within the 13-34 age group.

Monetization with Snapchat Plus

Snapchat's launch of Snapchat Plus signifies a strategic shift towards a freemium monetization model.

Here's a breakdown of this approach and its implications:

The Freemium Model Explained

Freemium offers a base level of service for free, with additional features and functionalities locked behind a paywall (subscription in this case). This strategy aims to:

• Attract a large user base with the free app.

• Convert a segment of those users into paying subscribers who value the additional features.

• Maintain a healthy balance between keeping core functionalities free and offering enough value in the premium tier to justify the subscription cost.

Benefits for Snapchat

• Recurring Revenue: Subscriptions provide a predictable revenue stream, unlike advertising which can fluctuate.

• Increased User Engagement: Exclusive features in Plus can incentivize users to engage more with the platform to leverage the full benefits of their subscription.

• Deeper User Relationships: By understanding which users convert to Plus, Snapchat gains valuable insights into their most engaged users, allowing for targeted marketing and product development efforts.

Challenges and Considerations

• Balancing the Freemium Equation: It's crucial to ensure Plus features are valuable enough without diminishing the free experience. If core functionalities are placed behind a paywall, user frustration and churn (loss of users) can result.

• Value Perception for Users: Users, particularly the value-conscious young demographic that dominates Snapchat, need to clearly understand the benefits of Plus and how it enhances their Snapchat experience.

• Competition: Other social media platforms are also experimenting with freemium models. Snapchat needs to differentiate its Plus offering to stand out.

The Snapchat Plus Freemium Experiment

The launch of Snapchat Plus is an experiment to see if the freemium model can be a successful revenue stream for the platform.

By closely monitoring user behavior, subscription rates, and feature usage, Snapchat can refine its approach and determine the optimal balance between free and premium functionalities within the app.

The Future of Freemium on Snapchat

The success of Snapchat Plus will likely influence how Snapchat approaches monetization in the future. We might see the introduction of additional freemium elements within the app, such as:

• In-App Purchases: Selling virtual items or enhancements within the app for a one-time fee.

• Tiered Subscription Options: Offering different subscription tiers with varying feature sets at different price points.

By effectively navigating the freemium landscape, Snapchat can unlock new revenue streams while continuing to engage its core user base.

Key Engagement Metrics for Snapchat Plus

Following the launch of Snapchat Plus, analyzing user engagement is crucial to understand its effectiveness and identify areas for improvement. Here are three key metrics to closely monitor:

Subscription Conversion Rate

This metric reveals the percentage of free Snapchat users who convert to Plus subscribers. It provides a direct measure of how successful Snapchat is in convincing users of the value proposition behind Plus.

Here's how to calculate it:

Subscription Conversion Rate = (Number of New Plus Subscribers / Total Number of Free Users) x 100

Ideal Scenario: A high conversion rate indicates that Snapchat's messaging about the benefits of Plus is resonating with users and successfully converting them into paying subscribers.

Average Revenue Per User (ARPU)

This metric represents the average monthly revenue generated per Plus subscriber. It's calculated by dividing the total monthly revenue from Plus subscriptions by the number of Plus subscribers.

Here's the formula:

ARPU = (Total Monthly Plus Revenue / Number of Plus Subscribers)

Ideal Scenario: A healthy ARPU indicates that Plus subscribers are finding value in the subscription and are willing to pay the monthly fee.

Feature Usage

This metric dives deeper into how Plus subscribers are interacting with the platform's exclusive features.

Tracking which features are used most frequently provides valuable insights into user preferences and helps Snapchat determine which features are driving the most value for subscribers. Here are some examples of how to track feature usage:

• Percentage of Plus users who utilize story rewatch functionality.

• Number of chats where custom chat wallpapers are applied.

• Frequency of using exclusive badges and ghost emojis.

Ideal Scenario: High usage rates for Plus features indicate that these features are resonating with subscribers and justifying their subscriptions. Conversely, low usage rates might suggest features need refinement or aren't delivering enough value.

By closely monitoring these engagement metrics, Snapchat can gain a comprehensive understanding of how users are interacting with Snapchat Plus. This data can then be used to:

• Optimize the Subscription Model: Identify pricing strategies or feature adjustments that might improve conversion rates and ARPU.

• Enhance the User Experience: Prioritize feature development and refinement based on actual user behavior within Plus.

• Targeted Marketing: Tailor marketing messages to highlight features most relevant to specific user segments and drive engagement.

By leveraging these user engagement metrics, Snapchat can ensure Snapchat Plus continues to deliver value to its subscribers and evolves into a successful and sustainable revenue stream.

Analyzing if Snapchat Plus is Worth Paying for

Let’s use a decision-making framework. It is best to act as the user, think from their brain and mind, and ask questions as if you’re them.

Here’s the framework we’re going to use:

1. Evaluate Your Snapchat Usage: How often do you use Snapchat? What features do you use most?

2. Identify Your Needs: Are there specific features you miss in the free version that Plus offers?

3. Consider the Cost: Can you comfortably afford the monthly subscription fee?

4. Explore Alternatives: Are there other apps that fulfill your needs for messaging or social connection?

Evaluate Your Snapchat Usage

• How often do you use Snapchat?

  • Daily: If you're on Snapchat every day, you're likely a power user who could benefit from Plus features.

  • Occasionally: If you use Snapchat a few times a week, consider what you use it for most. Plus might be less essential.

  • Rarely: If you rarely use Snapchat, the free version likely offers enough functionality for your needs.

• What features do you use most?

  • Snaps: Plus doesn't offer significant benefits for sending/receiving Snaps.

  • Chats: Story rewatch and pin features in Plus could enhance your chat experience.

  • Stories: Rewatching your own stories and seeing who rewatched yours might be valuable (Plus features).

Identify Your Needs

• Are there specific features you miss in the free version that Plus offers?

  • Story Rewatches: Do you ever want to see your own Stories again after they disappear?

  • Snapchat for Web: Would using Snapchat on your computer be a major advantage?

  • Customization: Do exclusive badges and chat wallpapers hold value for you?

Consider the Cost

• Can you comfortably afford the monthly subscription fee?

  Be honest with your budget. Plus shouldn't strain your finances.

Explore Alternatives

• Are there other apps that fulfill your needs for messaging or social connection?

  Consider apps like Instagram or Facebook Messenger that offer similar features, some for free.

Making the Decision

• Power Users: If you use Snapchat daily, heavily utilize chats and Stories, and miss features like rewatch and web access, Plus could be a worthwhile investment.

• Casual Users: If you use Snapchat occasionally and primarily for Snaps, the free tier likely offers enough. Consider the cost and explore alternatives before subscribing.

A Mini-Task for You

Develop a user segmentation strategy for Snapchat. Categorize users based on engagement levels and identify high-value users most likely to subscribe to Plus.

This will allow for targeted marketing campaigns promoting features most relevant to specific user segments.