Creating a premium subscription product for teens and young adults

Step Premium

Overview

Step is a bank for gen z that offers a secured credit card that helps young people build credit. Our mission is to improve the financial future of the next generation and I think we’ve delivered on that promise, at least for teenagers. Our product builds credit extremely well and we have all the features you’d need all in one app. 

Our strategy as a business was always to acquire teens while their cost of acquiring them is cheap, build a relationship with them so they continue to bank with you when they’re older (so we can increase their LTV). To execute on the last part and retain older users we needed our users to put their first paycheck into their Step Account.

Business Objectives

  • Increased profitability

    • Introduce alternative revenue streams.

    • Increase funding via ACH, direct deposit and cheaper transaction types for us.

Step Premium?

The idea of a premium subscription had been kicked around for a while. Based on our business objectives it seemed like a good candidate to achieve our goals. Our job was to figure out the details and find a product offering that was right for our audience and the business.

Challenges

  • This feature spanned 3 internal product teams, marketing, and the executive team.

  • The feature touched a lot of the app and we wanted it to have its own visual identity so there was a lot to do.

  • The seasonality of teen finances required a launch by the end of the school year to capture direct deposit for summer jobs.

User Research

Since this was our first real push into the 18+ market research was an integral part of this project. I found the conjoint analysis was particularly effective at helping us shape the feature. It helped us prioritize features and help decide where to put our effort and money based on feedback from a large sample size of our customers.

  • Interest on Savings, Cashback and metal cards were highly requested features on Acute (software that allows users to submit feature requests and others users can upvote them)

  • Conjoint analysis to help guide messaging and find out what was important to this new audience. Below

  • We conducted user interviews that included generative exercises and concept testing.

Conjoint Analysis Takeaways

  • The metal card was less important than we thought.

  • Fees / price are really important

  • Users wanted interest on savings but didn’t know what APY stood for.

  • Users knew they spent a lot of money on food so increased rewards on food purchases resonated with them.

Design Phase

To make sure design was efficient I led a collaboration session in-person with all the stakeholders. We aligned on requirements, and the basic flows. I used very basic wireframes like the one below to express the ideas and prompt conversation. The entire doc from the session can be found here.

Once we had agreement on scope and requirements we began to document the designs for the various milestones and I began to delegate UX work. File organization and excellent documentation became extremely important. We set up weekly reviews to make sure the work was progressing.

Iterative Approach

​​After the initial soft launch in May 2023 we continued to iterate and optimize until 2024. A good reminder that you don’t have to get it perfect the first time out. Getting data from real customers is super helpful.

  • Initially we had two tiers Step+ and Step Black. We combined them and made Step Black free with Direct Deposit.

  • We changed our billing to monthly based on user feedback and data.

  • Removed the metal card from the subscription cost and made it a separate purchase.

Final Product

  • $4.99/month or free with direct deposit

  • Included 5.00% Savings APY

  • Up to 8% cashback

  • An exclusive metal card for an additional $49.99

Impact

  • Introduced 2 new revenue streams.

  • More than doubled customers with direct deposit within months.

  • Grew ACH funding from ~10% to 46% over the year.

What I Learned

Design with your audience.

  • This feature brought together heavily requested features like cashback rewards, savings apy and the metal card.

  • Conjoint analysis helped us define the details of the product like price, cashback amounts, etc.

  • Soft launching allowed us to iterate based on feedback from real users and optimize results. 

There’s no such thing as over communicating

  • Clear and extensive documentation so people reviewing the designs asynchronously can understand them.

  • Organization, documentation, and naming conventions in figma so teammates can find exactly what they are looking for quickly.

  • Broadcast status, decisions or changes to the plan to the entire team.

Next

The Step App