D2C Summit: How Babbel wins with its subscription-based language learning service

With more people spending time at home because of the pandemic there has been a huge increase in self-improvement. Riding the e-learning wave has been Babbel, the world’s top-grossing language learning app with 10 million subscribers.

To explore how the company is evolving and creating an eco-system for a raft of learning experiences, Julie Hansen, Chief Revenue Officer and US CEO, joined FIPP CEO James Hewes at the D2C Summit.

“For anyone thinking of entering the e-learning space it starts with the basic question – why is someone learning?” she pointed out. “Is this a corporate e-learning, an education market e-learning or a self-improvement experience? That is fundamental to what you do.

“If it’s a consumer experience you have to remember that anything people are doing voluntarily is a want and not a need. Their expectations are high for the quality of the content and the pleasantness of the experience. The emotional payback is just as important as the learning payback and getting that right is critical.”

Staying ahead of the chasing pack

According to Hansen, what sets Babbel apart from competitors is its multi-faceted approach to teaching and a commitment to create connections through conversations.

“Babbel is not one generic programme that’s translated into multiple languages,” she said. “We take the notion of – you speak French, you want to learn Spanish – and we leverage what is shared in those two languages and we explain the difference. That’s an important distinction and one of the reasons Babbel is more effective than other language learning products.

“We really want you to learn a language. We don’t want Babbel to sit on your phone to make you feel good. We want you to learn. It has been built by experts and it has been built for conversation. When you learn with Babbel you will be able to go express yourself and make a mutual connection through language. It’s a premium product – it’s all about the quality of the education.”

As Covid hit, scores downloaded the Babbel app to make the most of months spent at home. Hansen admits the surge in new subscribers came as a surprise.

“For Americans travel is such an important motivator to get a language learning app so when I saw travel go to zero I thought – this is going to be a long year and it’s not going to go for us,” she said.

“And then to find that people turn to language learning as something to give them solace, comfort and enjoyment during the pandemic – that was really amazing and uplifting for the team. And it presented such opportunities, like giving Babbel away free to students last year, which was really popular.”

The importance of why

While the pandemic has have given scores the perfect opportunity to download a language learning app, the reasons why people want to learn a new language varies greatly from country to country. People in US tend to be motivated by travel, self-improvement and heritage reasons (learning to speak Italian like your grandfather), while in Europe there is far more emphasis on career.

It is a difference in motivation that Babbel uses when it comes to its acquisition strategy. “In the US you will see a lot of travel creative,” says Hansen. “We work with a lot of influencers and you will see them saying things like: ‘I want to refresh my knowledge of high school Spanish.’ And there are a lot of influencers who will say: ‘My husband speaks Spanish and I want to learn Spanish to talk to his family.’ So we tap into those motivations.

“In Europe we tend to emphasise the travel across borders and the intermixing of cultures and the idea that through language learning you can create that mutual understanding among people from different countries.”

Babbel’s business model is interesting in that it has a free trial but not a free tier.

“We’ve always had the opportunity to take one free lesson and we thought we could make that stronger through a free trial,” explained Hansen. “And we do different things in different markets. We don’t do the free trial in the US because we found that we don’t need it here.

“We do have quite a bit of learning content that is available outside of the paywall. There is the free lesson and, in many markets, games and other activities that you can try for free.”

Once people are hooked they are met with an inventive new pricing strategy. “We are doing unlimited classes, just like when you join the gym,” Hansen added. “It’s not that you are going to take a class a day, it’s more that it takes the pressure off of trying to decide how many classes you need and feel pressurised to use up all your classes. You can use what you want.”

Keeping the conversation going

For Babbel, its app is very much just the beginning of the language journey its users will go on. The company has branched out to live online classes and podcasts to keep the conversation going.

“It’s great to see people get on a class and realise that people from all over the world are learning together,” said Hansen. “I think people find that very enriching. We have classes across six languages and they are tied to the Babbel product. The idea is you can finish a lesson and there is a related class to that. It’s all about conversations and reinforcing the lessons.

“We have realised that the app is a great starting point for language learning, but you are not going to get fully fluent from an app. You need to speak to other humans in real time, in real life.

“So how can we build on that and be with the user for more of the language-learning journey? That’s our goal in launching live classes and in launching things like podcasts.”

The Babbel podcasts allows a user to hear their target language and their primary languages together in a highly supported way.

“They can hear it again and again. It’s very satisfying for people to hear the language so well supported and then being able to reuse it and constantly have new episodes. And they are fun. We’re focused on creating good podcasts. These are not lectures, they are media that’s entertaining and engaging but they also teach you as you listen.”

There is always more to learn

Even after more than a decade of success Babbel is continually tweaking its app by using data to find product roadblocks.

“We lean very heavily into data for product development,” said Hansen. “We are very focused on retension issues and data is the ideal guide for that. Are people staying in the product, where are they tripping up, where do they need reinforcements? – these are all topics for us right now.

“We have data that shows where you are struggling and what’s the lesson that people are giving up on. We find out where we are disappointing our users in that sense and really dig into that.

“We recently redid the first level of content across all our languages because we figured out the first lesson was taking people too long. It’s way more satisfying to have more, shorter lessons. It’s a very simple insight but it provided a meaningful uplift in usage.”

Babbel is well aware that after 15 years it has to ensure the app stays fresh and engaging.

“We’ve been making an app for over a decade and that’s a long time. We face the challenge of making sure we stay current and refresh our interface. We’re about to replace that first core user experience in the app. It is very bold and exciting but we have to do that kind of thing otherwise we’ll become stale.”


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