Paddle Billing
ProfitWell Metrics
Join our newsletter for the latest in SaaS
The company
Master English is an AI-powered app designed to help Spanish-speaking adults reach an advanced level of English so that they can do their jobs better.
It was created by a Finland-based team of experts who have worked with language learning apps for over 15 years.
There are a lot of roles where you have to acquire a high level of English to be able to excel in your job. In fact, in South America and Asia, you can even double your salary if you are able to handle your job well in English.”
Lauri Leinonen, CMO, Master English
Master English has been available for Spanish-speaking users since February 2021.
The challenge
When first launching Master English, Lauri and the team decided it would take a hybrid approach and drive revenue both in the app stores and on the web.
To support the subscription payments on the web, Master English evaluated the solutions in the market, looking for a partner that would set them up for worldwide success.
This led them to Paddle and the Merchant of Record model that operates in a similar way to the app stores but for web sales.
We saw that Paddle acts as a merchant of record, taking away the burden of sales tax, refunds and chargebacks. That was exactly what we needed. Paddle saves us a lot of time in the back office.”
Lauri Leinonen, Chief Marketing Officer, Master English
Rising chargebacks
With Paddle now taking care of Master English’s complete web payments stack, this single source of web revenue truth uncovered a surprising issue with chargebacks.
A chargeback is when a consumer disputes a transaction with their bank and has the funds returned to their account.
It was a scary realization.
We had doubled our retention over the past year and had an average rating on the Apple App Store of 4.9 out of 5. Based on our 15 years of experience in different markets, we didn’t consider that with such positive customer feedback there might be an issue around chargebacks.
Also because the issue was mainly with long-term subscriptions – those that last six or nine months – so we were oblivious to the problem until those started to renew.”
Lauri Leinonen, Chief Marketing Officer, Master English
The solution
Paddle’s teams quickly stepped up to help Master English meet its challenge.
After working closely with Paddle’s risk team to analyze data, we quickly discovered that much of the issue was in the USA, so we did an A/B test to see what would happen if we dropped the long subscriptions and only used monthly subscriptions. That worked very well. We were able to get the chargebacks under control.”
Lauri Leinonen, Chief Marketing Officer, Master English
The Paddle team also advised that increased buyer communication surrounding billing will help to reduce chargebacks, so Master English added an additional layer of transparency by extending the app session length from 14 to 90 days, increasing the number of pre-billing notifications before the payment came out, and updating statement descriptors so that the transaction was recognizable to the customer.
On top of this, Master English sent out a series of emails to all active subscribers in the problematic segments.
First, we sent an email from one of our customer support experts to ask users if they needed any help with their program or subscription.
Then, we sent information about our refund policy, reminding customers that we are here to offer them a great service, but, if they are not happy, we will refund them within 30 days of a transaction.”
Lauri Leinonen, Chief Marketing Officer, Master English
The results
Fast growth on the web
With Paddle managing payments on the web, Master English is realizing fast growth and attracting loyal customers.
With Paddle we are able to drive fast growth with web users.”
Lauri Leinonen, Chief Marketing Officer, Master English
Less time spent on tax and compliance
As its MoR, Paddle takes on the entirety of Master English’s web sales tax liabilities globally, enabling it to enter and scale in new markets with ease.
As we expand to new continents, Paddle’s value becomes even clearer. For a startup or scale-up like ours, serving customers across many countries would be extremely difficult without a partner like Paddle.”
Lauri Leinonen, Chief Marketing Officer, Master English
Cut chargebacks in half + improved user acquisition
With Paddle helping Master English recognize its chargeback issue and pinpoint the root cause, Master English has moved to a monthly-only subscription model in the US market.
As a result, in just two months, the company reduced its chargeback rate to a very healthy 0.53% from 1.12%. Meanwhile, chargebacks from its most problematic segment (US Visa customers) were reduced by 55% and the chargeback count for all customers came down by 54%.
While the actions taken led to an initial rise in the number of refund requests, Master English has since been able to grow rapidly in the USA, while keeping its chargeback and refund rates stable. The company has also repeated some of the strategies proven to work in the US in all key markets to prevent chargebacks.
Better customer insights
Master English is using Metrics to analyze and improve its subscription revenue performance.
Metrics' automated insights allow us to monitor performance and analyze the impact of our improvements without constantly relying on our in-house data team, which doesn’t always have the bandwidth to analyze everything for us”
Lauri Leinonen, Chief Marketing Officer, Master English
Future plans
Master English’s partnership with Paddle is just getting started and they’ve got their sights set on helping even more people gain a higher level of English.
We’re currently taking Paddle Billing into use, which will bring even more benefits, including a faster, one-page checkout experience.
As we, for example, expand into Brazil soon, local payment methods like PIX will be crucial – and with Paddle set to support it soon, we’re confident this partnership will continue to help expedite our growth.”
Lauri Leinonen, Chief Marketing Officer, Master English
Want to know more about how Paddle can help your SaaS or digital product sell globally with ease? Create your free account now or speak to our team. Get Started.