Case Study: Codédex
About Codédex
Codédex is very promising early stage EdTech company that is positioned to be the major player in the online learning to code space.
Their goal is to help bring coding education and better job opportunities to Gen Z, which is a missions that I strongly resonate with.
They have built a great product, their early investments in brand have differentiated them, and organic traffic to the site is taking off.
The Core Challenge: Strong Foundation for Revenue
Codédex has all of the elements of a great consumer company. They are taking on an important problem, they have a great brand, and their product delivers an excellent experience for their end user.
When our engagement started, they already had a paid product in place but were not seeing the conversion to paid and the associated MRR growth that they'll need to scale the business.
Biggest Lesson: Early stage subscription products must get monetization in place as quickly as they can. Every month they are missing best practices is money lost forever.
The Codédex's team has built an amazing product in a very competitive space. They have a path to building a great business and they'll need to monetize effectively to do that.
Consumer subscription companies take a long time to grow, so it's critical to set up the best practices for monetization as soon as possible.
The Results: Dramatically Improved Monetization
Across the engagement, we were able to deliver the following impact. The Codedex team was incredible to work with and
the speed with which they could iterate was the core to this success.
Gross Bookings
+121.1%
Definition: Total dollars collected minus refunds
Failed Payments
-12%
Definition: % of payments recovered after an initial failure
MRR
+68%
Definition: Recurring revenue generated monthly.
Free Account Sign Ups
+27%
Definition: Free accounts registered divided by anonymous visits per month
Monthly Churn
-24%
Definition: % of overall paid users canceling monthly
Free to Paid Conversion
+48%
Definition: % of free users that convert to paid users
% Annual Plan Sales
+71%
Definition: % of overall plans sold that are annual
12 Month ROI
5.7x
Definition: Return on consulting spend from MRR growth within 12 months
"No one knows subscription businesses better than Dan. We more than doubled our Annual Plan mix after he completed a thorough site audit and presented us ALL of the gaps within the user lifecycle. He realigned the team with growth metrics and distilled data intuition for the whole team at Codédex."
Sonny Li
Founder, Codédex
The Process:
I tailor my process to each clients and this the process that was used at Codedex to product these results. Because they have all of the basic elements of a free product in place, they challenge is how quickly we can get high ROI work launched.
1. Deep Audit of the Site
The first step was to walk through every page of the product with fresh eyes, document where I think there is opportunity to improve the business. Because Codedex is a freemium product, little details matter a lot to the overall business.
I documented every screen, CTA and redirect in the user journey too see where I can find seeing the following things:
- Confusion - Where might users be falling away because the next step isn't clear?
- Bugs - What edge cases are causing issues that are hurting conversion?
- Missing Best Practices - Where can we find easy wins by implementing best practices?
- Improve Monetization Features - What core monetization features are missing or need improvement?
Everything gets added to the board and presented to the team.
2. Align on Plan & Rapidly Implement Best Practices
After presenting the results to Sonny and the team, we aligned on a prioritization framework for changes with the goal of implementing the best ROI work first and quickly.
Because subscription companies are slower to scales than sale led companies, fast implementation is critical. Every day that you are not converting people is money that is lost forever.
We added best practices across the core areas of:
- Payment Processing - How effectively are we collecting payments?
- Revenue Recovery - How are we handling payments that fail and how many can we win back?
- Purchase Flow - What path are people taking to upgrade and how can we improve it?
- Annual Plan Sales - How can we push longer term plans to the right users?
- User Onboarding - How quickly can we get users to value?
The Codédex engineering team ability to make rapid changes was very impressive and one of the keys to success.
3. Invest in the Key Monetization Features
For a freemium product to work and scale into a business, you need to invest in the free to paid user journey. Every little detail matters as the conversion rate + LTV + retention rate will dictate how large the business can be.
For all subscription products, some of the best ROI work that can be done in around the point of purchase. Every incremental win that you can get in the purchase flow will compound for months and years to come.
Together with the team, we overhauled multiple key features of the site, the most powerful of which was the paywall and checkout pages.
Big credit to Ruo Shan Lee who did these designs. They are great.
Paywall Upsell Points
Before:
After:
Checkout Page
Before:
After:
4. Define Metrics for User Lifecycle & Monetization
To help understand the impact of these changes, we established a hierarchy of metrics for both the usage on the product and the core monetization.
This allows us to monitor the changes we are making and see leading indicators of success.
Usage Metrics
- Set Up - When are users "ready" to start the product?
- Aha Moment - When do they first see the value?
- Active - When are users "activated" on the product?
- Retained - When are users "hooked" and
Money Metrics
- Conversion Rates - between the core user states of anonymous, free and paid
- Plan Mix - How effective are we at driving users to long term plan
- Conversion time windows and session counts
- Payment vs Usage Retention - When are users going to stop using vs stop paying
5. Weekly Metrics Reviews
Review core metrics with the team so that they build their intuition on how our changes impact the business. This allows the engineers to see the impacts of their work and better understand the product.
Based on what we see working in the product, we re-prioritize the roadmap.
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About Dan Layfield
Dan has help drive 100M+ of business growth across his years as a product manager. He specializes in growth & product management, focusing on self service revenue.
He ran the growth team at Codecademy and scaled ARR from $10M to $55M, which was acquired for $525M in 2022
After that he was a product manager at Uber Eats, running the Homefeed ranking.
Now he advises and consults with start ups who are looking to increase subscription revenue.