Unidentified Analyst: I was thinking more just on the consumer side. Just the nice acquisition period going into back-to-school, is another opportunity just to lean in more there?
Chuck Cohn: Yeah. One of the things that, I think we shared on the last earnings call was to just drive good operating discipline, we’re holding our customer acquisition cost content while we saw pretty dramatic improvements in lifetime value. Those have continued to hold. So we feel really good about that relationship. And we’re continuing to grow reach and grow new customer acquisition by making our product resonate more and more. So we think that continuing to improve the product marketing and the underlying product set that comes with your learning membership and driving growth through conversion is something that is a very highly accretive way to grow the business. We’re going to continue to explore other marketing opportunities as well.
We think this has the potential to continue to appeal to a large segment of the US student population and we would expect the effect to which it resonates improves as we continue to add new features and products. So it’s getting better fast. It’s already really good. We think an incredible value and it’s going to keep getting better.
Unidentified Analyst: Great. Thank you.
Operator: Thank you. The next question comes from Doug Anmuth from JPMorgan. Please go ahead.
Bryan Smilek: Hey. It’s Bryan Smilek on for Doug. Thanks for taking my questions. Just starting on learning memberships, can you just talk about the pricing strategy there and how it could evolve overtime, particularly just as you evolve the membership going forward? And then on BTS, can you just better help us better understand how renewals with existing customers are trending? Have these new formats come up in those conversations? And are they driving deeper spend?
Chuck Cohn: Sure. So one of the things that we test is the actual features that come with any given membership as well as the frequency of live tutoring hours to come as well. And so there’s different need states that exist for any given subject an example would be foreign languages where you have. People that are learning it in a given school, in an academic context, and it’s more intensive and more oriented towards accomplishment and grades and specific academic achievement and there’s other cases where you have, an adult learner like to say, my mom, who might be learning Spanish before she goes on a trip. And that’s a real example. And in both cases, by having different levels of frequency and different price points, you can appeal to different audiences.
And so the way that we think about this is we’ll actually do consumer research and identify it. And then, we’ll also test the incrementality of different offerings and what product features we actually feature for a given the audience being effectively the combination of subjects and ages of students. And given that our platform services the entire consumer base from kindergarten through adult and professional learners and everything in between. There’s a lot of different ways to kind of fruit. So our product and product marketing teams are actually going through and testing in different audience segments to make sure that we are evolving the product in a way that meets different marketing. And what we see is that you get increased conversion and retention associated with those changes which then drives high-margin growth.
Jason Pello: And then, on your second question as it relates to like more teachers for schools customers and how they’re responding to new products. I’d say it’s incredibly well. We’ve recently been a couple of the larger schools to conferences, including the Council of the Great City Schools, The Virginia Association of Superintendent t as well as New Jersey. And I think what school district leaders like is the simplicity of the models, the ability to affect multiple students in multiple need cases across whether or not they want to maintain control of the allocation of ours at the district level, put that power within the teacher sands or allow parents to schedule those hours after the school day and on the weekends through parent assigned.
And so during the quarter, we actually converted 20 customers to these new contracts. So it’s not only resonating with prospective customers, it’s also resonating well with customers that have been with us for some period of time now. So add that all together, and I think we feel really good about how we’re positioned heading into 2024.
Chuck Cohn: Yeah. I would also add that the product itself, as we’ve made these consumer membership upgrades, the institutional basis is piggybacking off of those upgrades for its students. So it also just naturally inherits all the benefits of better product discovery of everything we have within the platform, the subject portals that we referenced, a lot of the diagnostic testing, the live classes, the live chat-based tutoring all these other things that come with the live video-based tutoring that really is our superpower. All these additional features that are available for entire school districts of students they can deploy allow for them to provide value to the student basis. So there’s classes in ACT and SAP and enrichment and coding, and you name it, and districts really are valuing the kind of broad array of different solutions that they have available that come with these new three, high dosage tutoring subscription offerings.
Bryan Smilek: Got it. Thank you
Operator: Thank you. The next question comes from Alice Guiltaux from Raymond James. Please go ahead.
Unidentified Analyst: Hi, this is Jessica on for Alice. Thanks for taking my question. I just was just a little bit curious, so at almost all your active members in the consumer segment have now been migrated pretty overt subscription model. I wanted to double-click on what trends you’re seeing so far for churn and renewals? It might be that early, but is there anything you’re seeing on renewal rates of this new model compared to what you had before? And are you seeing anything like upgrade, downgrade within packages month-to-month? Thanks.
Chuck Cohn: Perfect question. So, one of the things that we shared in our shareholder letter was the actual cohort curves. So, you can see that for all the different cohorts that have started since we launched the membership product relative to our own package model, they are significantly higher lifetime value and that’s a function of the fact that people are just getting more value from the entire experience from a consumer’s perspective, the relationship is oriented toward multi-subject support, multi-learning format support, and multiple academic calendar years. And you then see that change — psychology and change in product positioning and change in the features that come with the product manifest in much higher levels of retention relative to the package model and at a year, mark, you are trending towards about 2x what we were getting in terms of revenue for a given customer relative to the old package file.
