How effective is account-sharing prevention as a growth strategy?
Few initiatives can generate growth as significant as account-sharing prevention. Yet, most companies leave this opportunity untapped. Why? Because it requires a massive investment of time and talent to build an effective solution.
Rupt is the first and only platform specialized in detecting account sharers and turning them into happy paying customers.
Working with 40+ companies over the last 12 months across industries with 1.5M+ active users, we wanted to understand how effective account-sharing prevention is for growth.
Data on the scale and effectiveness of account-sharing prevention strategies is sparse and nearly non-existent. Through its experiences with customers, Rupt is publishing its results to provide companies embarking on similar initiatives with benchmarks to compare their performance and growth against. Let’s dive in.
The number of user accounts shared amongst two or more people ranged between 10.55% and 25%.
These accounts belong to people who (mostly) willingly share their login credentials with one or more people.
Our customers approach account sharers in two ways:
- In-app “challenges”: these are popups or redirects designed to lock the user out of the app until they create a new paid account (convert) or verify via 2FA the account ownership and kick out other devices we believe belong to other people.
- Off-app communication: this can be an email asking them to stop sharing or asking if they’d like to purchase more seats.
Of the sharers who faced a challenge, conversion rates ranged from 6.15% to 63.67%.
What contributed to the conversion rate
The most significant correlation to conversion was the “leniency” factor. By leniency, we mean how lax or tight the system is configured to detect and challenge account sharers. For example, companies that limit user devices to a maximum of 2 saw double the conversion rates of companies with a maximum of 3. Companies that limited users to one device (one of each type, mobile, tablet, computer) saw 3X conversions compared to those with a generic two-device limit.
The most effective strategy was setting reasonable device limits and considering device types (for example, limiting to one computer, one tablet, and one mobile device).
One caveat here is that 40% of conversions occur after 10+ challenges. Meaning as sharers are more active, they get automatically challenged more and are more likely to convert. The time element should be considered. But all conversions will likely increase over time, so this does not impact the conclusions.
Let’s examine referral marketing as a common growth strategy and compare it with account sharing.
The average referral conversion rate is 2.3% - 4.75%, meaning account sharing prevention is 3X better than referrals at worst performance and 13X at its best.
Shared accounts are a goldmine of referrals waiting to be exploited. If you suspect your product is vulnerable to account sharing, or you’d like to know how much of an opportunity it is, give Rupt a try.