§1
Research
The original onboarding forced users to activate a 529 plan before they could contribute
The specific problem we were solving was that users were failing to complete the activation step for their account (which had to take place on a 3rd-party site). This blocked them from contributing to their new fund and kept us from generating revenue.
A 529 college savings plan is like a 401k for future education expenses. In 2020, there were $BB held in 529 plans and that represented about 40% of overall money being saved for college in the US. They're widely regarded as the industry standard for investing money you want to save for college, however picking the right one based on your family's savings goals is cumbersome–every plan has slightly different requirements related to residency, taxes, and limits to how much you can contribute.
Backer did all this for the account owner by offering the my529 plan, sponsored by the state of Utah. It's the simplest plan, with the best tax advantages and it's open to residents of any state.
Originally, users had to enroll in this plan and activate it during our onboarding–only then could the user actually start saving (i.e. contribute to the fund). This was a problem for two reasons:
1. The activation itself was difficult for users
2. Not every user wanted to open a 529 with us
The difficult activation hurt our conversion rate because many users gave up when they ran into confusion, bugs, or didn't believe it was worth it. There were also users who wanted to use Backer to save for college but didn't want to open a 529 plan with us.
§2
Design
Our Strategy to Boost Revenue
The goals were set by our de facto product team—me, plus the CEO, COO and Head of Engineering.
We drew directly on the insights found during the research phase–each section below corresponds to an insight and a key result or metric.
Now, the nitty gritty…
The choice to institute a voluntary fee well-received by our users
Our churn rate remained stable a year after implementation. This could indicate a monthly subscription was more in line with user's expectations and willingness-to-pay.
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§3
Results
§3.1
Final Design Solution
We created was now easier than ever to start saving for your child's future education —the Safe even included previously unavailable tax-benefits
§3.2
Outcomes
Product REsults
Conversion
Rate Doubled
Users who were blocked from funding their account in the prior onboarding, could now contribute right away
KPI Breakdown
We measured conversion rates as conversion events over the total number of logins created.
Conversion Event
For this metric, the conversion event before and after was when a user contributed to their fund.
The old conversion rate measured how successful we were at getting users to contribute and tip us. Now, it was based on how many users were charged the voluntary monthly fee.
Conversion Event
The conversion event before and after the redesign of the onboarding was the moment a user first generated revenue
Revenue Outcomes
Revenue grew by 3x
Average revenue per user (ARPU) tripled year-over-year. We met our primary objective: our payback period was cut to under a year.
Our sound unit-economics demonstrated a viable path to profitability and we were able to raise an $8.6M Series A.