Fact:

💵
Monetization is a secondary lever to increase revenue. Hotjar is a monetized product with $25M in revenue with 21,000 users across the globe
 
To identify if the product is ready to be monetized, we have considered Retention, Engagement and Willingness of customers to Pay as the factors to be analyzed.
🗣
From our User insights, we found that ~60-70% of users are Core + Power users and out of which CORE users’ share is much higher than the Power user. This provides an opportunity to run campaigns around FTP (Free to Paid).
 
 

Retention

🗣
User Calls:
From user calls, Hotjar’s retention rate is falling in the Start-up and SMB segments as core users, who were onboarded in the past two years are considering moving to Microsoft Clarity due to change in Hotjar’s pricing.
 
Industry Standards on Retention Rates
  • Industry Benchmark for Retention - According to Lenny’s Newsletter, the industry benchmark is as below
      • notion image
 
  • From B2B SaaS standard table above, we have taken higher average churn of 2% MoM for Enterprises and 5% for Others. The users continue to churn over a period of 12 months and then stablize.
      • notion image
 
Details are part of our Growth Model Excel.
Updated Hotjar GrowthX | Template to design a growth model
Step 1 : Assumptions Parameter,Specific numbers,<a href="https://www.notion.so/growthxclub/TAM-SAM-SOM-for-BCPs-8ae14c9e5e564b2b8ba640117670f899">https://www.notion.so/growthxclub/TAM-SAM-SOM-for-BCPs-8ae14c9e5e564b2b8ba640117670f899</a> Total Addressable Market Serviceable Addressable Market Se...
Updated Hotjar GrowthX | Template to design a growth model
https://docs.google.com/spreadsheets/d/1FXRyvcOehPmSqqJWG1CQScNPDfUOaiDc9yTOcGd6S80/edit#gid=1100428467
Updated Hotjar GrowthX | Template to design a growth model
 

Engagement

Hotjar’s user base bifurcation into Casual, Core, Power Users Definition and their Natural Frequency
Casual
Core
Power
Natural Frequency
1-2 times a week
2-3 times a week
3-4 times a week
Sub-products used
Recording and Heatmaps
Recording and Heatmaps Surveys & Feedback
Recording and Heatmaps Surveys & Feedback User Interviews
Sub-products most valued
Recording and Heatmaps
Recording and Heatmaps
Recording and Heatmaps
Plan
Free
Free/Paid
Paid
Time spent
30 mins- 1 hour/week
2-3 hours/week
4-5 hours/week
BCP
Startups
Startups, SMB
SMB, MSME, Enterprise
 

Bifurcation of users

Hotjar’s user base, as inferred from user calls:
  • 42% core users
  • 31% power users
  • 28% are casual users

Willingness to Pay

Hotjar’s product stickiness, and the market’s lack of awareness and lower incentive to search for competitor products indicates that there is willingness to pay.
ICP 1: Product Manager
ICP 2: Product Marketers
ICP 3: Growth Marketers
ICP 4: Product Designers
Core, Power, Casual
Power
Core
Core
Power
Recency of use
Daily
Daily
Daily
Daily
Customer Segment
SMBs + Startups
SMBs + Startups
SMBs + Enterpise
SMBs + Enterprise
JTBD
1. Identify if the user understands the product flow, understands blockers and reasons for user drop-offs 2. Improve onboarding to activation ratio 3. Get feedback for new product releases
1. Understand the user journey from the entry on the website to the exit 2. Identify the reason a user drops off from their site 3. Get real-time feedback on new pages that are launched. 4. Evaluate the placement of CTAs and change what is needed 5. Improve lead conversions 6. Increase time spent on the website
1. Understand reasons for user drop off 2. Improving sessions per day 3. Increase visitor engagement 4. Learn which pieces of content work v/s others
1. Understand user behaviour of their product 2. Understand reasons for drop off, rage clicks and how to create a happy flow 3. Real-time feedback for new feature releases
Features they will use
Screen recordings to evaluate user behavior, heatmaps to identify which elements the user interacts with, Easy to use interface, easy implementation and onboarding, ability to share findings with the team, low cost
Heatmaps, Recordings and End to end user journey analysis, Rage clicks, user drop points
Heatmaps, Screen recordings to show the start to end journey of a visitor, indication on reasons of churn, trends for user churn
Screen recording to understand the user journey, heatmaps, indication of reasons for drop off, user frustration in using the product, scroll depth, real-time user feedback for new releases
Willingness to pay
Yes
Yes
Yes
Yes
BCP
Start-up
SMB
SMB
Enterprise
Average spend per year
$384
$960 - $1200
$960-1200
$5000-$25000
 
✅
Results of Litmus Test: Passed
  • 76% Retention at M12 for Enterprises and 55% for others.
  • High engagement with 73% users in the Core and Power users segment
  • Monetized with different pricing tiers
 
 
 
 
 
 

⬅︎ What Alternative?

 

Who to Charge? ➡︎

 
badge