SaaS free trial sign-ups can be a great way to win business. But many SaaS companies have found it difficult to stop their free trial from turning into a tribulation.
One of the major problems is the huge gap between signup and conversion. A much-quoted 2012 survey from Totango showed that even the best SaaS companies were losing as much as 75% of those who signed up for a free trial before they entered their credit card details.
Engagement And Conversion
'Engagement is another important piece of the puzzle,' writes Marie Dean, innovation director at ConversionLifters, on the iSpionage blog. 'You want visitors to engage with your trial so that they are better prepared to sign up when the time comes. If they never use the product, then the free trial isn’t serving its purpose.'
The results of that engagement are clear. 'Someone who actively uses your product past the first three days of the trial is four times more likely to convert,' writes Lance Jones, CMO of Flow, for ConversionXL.
But knowing where to start can be baffling. A cursory Google search reveals many different - and conflicting - pieces of advice on the subject.
'Do a few minutes of research, and you’ll come up with a load of conversion advice,' writes Neil Patel in Forbes. '’Make CTA buttons bigger! Create killer headlines! Streamline your checkout process!” Ad infinitum. Ad nauseum.'
Patel argues that, in terms of conversion, a clear focus and simplicity are key. (They usually are.) A confused customer is one that is not likely to stick around. And since your industry’s mileage will vary from some lumped-together statistical aggregate that compares a B2B SaaS free trial’s conversion rates with upstart social apps and Angry Bird clones, you need data and planning that’s industry-specific.
'The very best conversion optimization is tailored to specific industries. The more specific and focused the conversion tips, the bigger impact you’ll see,' Patel continues.
Focus itself is often not the problem; it’s just that it gets misplaced. We concentrate more on getting people to sign up for the free trial rather than on converting signups. It’s a mirror image of the top-of-funnel focus that makes AEs fume. And it’s causing similar problems.
'The truth is that turning free trial users into paying customers is just as important as getting people to try your product,' writes Emma O’Neil on the Optimizely blog.
Shifting The Focus
Let’s shift the focus, then, away from signups and onto conversions. Why are we able to convert so few signups into paying customers?
Poor Lead Fit/Quality
First, we need to realize the differing commitment levels of those signing up. It is generally understood that there are three different types of signups:
- True evaluators
- Accidental signups
True evaluators are those who are genuinely interested in your product, logging in daily during the trial and getting to know the product intimately so they can make an informed decision.
Potentials have activated the trial but are otherwise pretty inactive, while accidental signups - also known as tire-kickers - have done absolutely nothing since signing up.
As you might imagine, true evaluators show the highest conversion rates - yet the Totango study showed that they make up only 20% of signups. That means your company’s metaphorical Goodyears are going to take one hell of a shoeing unless you do something to change things up.
'Free trials are not for tire-kicking freeloaders,' writes Lincoln Murphy on sixteenventures.com, 'and if that’s what you’re getting in your free trial, you may want to think about identifying your ideal customer profile and getting them into your trial - because a free trial of a premium product is not freemium. It’s not a giveaway. It’s not a gift.'
So the question is: How do we weed out the tire-kickers and increase the number of true evaluators?
Building A Lead Profile
The first thing you should do is examine your data and build a profile of the type of person that normally buys your product after a free trial: your ideal lead, the Cary Grant or Audrey Hepburn of your customers. Jones recommends considering the following factors:
- What was the traffic source for converted users?
- What demographics data can you extrapolate?
- Is there an industry or job title that is converting at a much higher rate?
- Is there an industry or role you are targeting that isn’t converting to your expectations?
- How many pages did converted users view before signing up?
Once you’ve built up a profile of your ideal user, you can then tailor your lead-generation process, signup forms and processes to this profile. Think about changing your methods of correspondence to fit the personality of this ideal profile.
Emma O’Neil cites Groove as one example of a company who realized the benefits of sending behaviourally triggered emails. True evaluators, who were using the product daily, were sent an email targeted specifically at them.
'Groove, like so many other businesses, was sending generic emails to their users over a 14-day trial and it wasn’t working,' she writes. 'They created 22 different emails each based on certain user actions. Over the course of the free trial, a new user would receive around six emails. The results were impressive: The conversion rate of trials to paying customers increased by 10%.'
Nurture The True Evaluators
If you can’t handle the true evaluators, you’re going to have a hard time. Once you’ve got them there in increased numbers, you need to nurture them.
'[I]t’s important to optimize for conversions that progress to lead nurturing,' writes Sujan Patel, co-founder of ContentMarketer.io, in Forbes. 'It gives you the opportunity to be the source for educational material and relationship-building content rather than leaving the audience to find other solutions via search.'
Patel argues that, although interested, many leads are still miles away from buying and that nurturing is absolutely essential if ready opportunities are not to be passed up.
'Taking this approach is crucial because as many as half of your leads may be qualified, but far from ready to make a purchase,' says Patel. 'As many as 79% of marketing leads never convert to sales because of a lack of lead nurturing. Can you imagine 79% of customer opportunities being squandered every day?'
Improve Your Signup Process
We all want a fluid, frictionless signup process, but a balance has to be struck: sometimes an extra couple of clicks at this stage can go a long way to weeding out the tire-kickers.
Again, let’s keep things simple.
What Should A Signup Process Include?
Credit card info?
In a word, no. Conventional theory holds that customers will be scared away by having to input their credit card details at this early stage, and the Totagno survey showed that to be ultimately correct.
'When a credit card was required, 0.6% [of customers] saw an end-to-end conversion, whereas those that did not require credit-card information saw a 1.2% end-to-end conversion,' writes Dean.
Yes. 'Adding the prominently placed free trial button proved to be a success for GetResponse,' writes Dean.
'Once added, they saw no decrease in paid customers, while with the prominently placed free trial button they saw a 158% increase in trial signup conversions.'
A full range of options?
Yes. Lincoln Murphy’s Ferrari analogy makes this point vividly:
'Why would you want to limit access to the things that makes your product great?' asks Murphy. 'If you sell Ferraris, would you go out on a test drive with the prospect and say, “Okay, let’s do this… But let’s keep the top up… Oh, and keep it under 50 mph.” WHAT? No, that’s insane.'
'You want the top down so the prospect can feel the wind in her hair, you want her to speed by everyone else, and you want her to drive by those buildings downtown that are like mirrors so the prospect can literally see herself in the car.’
'The same thing goes for the free trial of your SaaS product. While admittedly (probably) not as cool as a Ferrari, that same mindset should be employed. We don’t want to limit their experience with the product, but rather expand it.'
Yes - but watch you don’t do too much spoon-feeding in terms of the info you’re presenting. True evaluators have often done a lot of research and intros or explainer videos at the signup stage can actually increase friction for this group. Make sure you at least have an option to skip that step so that true evaluators can get started right away.
Make sure you’re selling the benefits, not the solution.
It’s a common error for SaaS companies to focus on the solution, when customers are already a long way down the buyer’s journey by the time they get to the free-trial stage.
'It is a wasted effort to try selling a solution to buyers who already know the solution,' writes Neil Patel. 'Instead, you should sell your benefits… Talk about whatever it is that makes your product particularly distinctive. If there are [sic] a handful of other businesses selling the exact same solution, then you need to differentiate yourself by virtue of your benefits.'
Contactability And Urgency
Live chat options increase engagement and makes people more feel more connected to the company - instead of having to wait forever on the phone or send an email into the unknown, they can chat with someone at the company and get an immediate response.
The length of the trial is also important. 'If you make it too short, your potential customers don’t have time to experience the product’s power,' writes Neil Patel. 'If you make it too long, you jeopardize the sales cycle.'
The creation of urgency is an age-old selling tactic that can work well in SaaS. It might seem easy for businesses that have a tangible product to sell, but not so simple for SaaS companies. However, if done with care, it can work.
'SaaS businesses often feel stumped about how to incorporate [urgency] into their marketing,' writes O’Neil. 'You have no physical inventory, there’s no fear of your product selling out. How do you use urgency to convince people in trial [sic] to sign up right now?'
A simple email reminding the customer that their trial period is nearly over - and asking them not for money but instead featuring an 'update your account' CTA - is one way of doing it. O’Neil cites SproutSocial and 500px as examples where such a tactic has brought dividends.
The latter’s final ‘push’ email 'uses a ticking-clock mentality with a time-sensitive offer. ‘Act fast! This sale expires in less than 24 hours!’' she writes. 'There is a real sense of urgency - even FOMO [fear of missing out] - in this email… People do not want to miss out on amazing offers. It’s an ingenious way to get people onboard.'
Free Trials And Retention
Once you’ve got ‘em, keep ‘em: Avoid the dreaded churn.
Again, we can be so focused on free-trial uptake and conversion that we forget that our bread and butter - the aspect of business that makes most of our money - is the retention of existing customers.
'Most SaaS sales are all about getting new customers, getting them on a recurring payment cycle, and then getting some more new customers,' writes Neil Patel. 'But what about your existing customers? They are the real source of revenue.'
Sometimes optimization of the free trial can become an obsession in a company, and a dangerous one at that. While it’s obviously important, you must not forget that the meat of your business - 70 to 95% of it - comes from existing customers renewing or upgrading. Simply relying on new customers coming in will see a drop-off in profits.
'It becomes enormously difficult to replace the revenue lost through churn by gaining more customers,' Neil Patel continues. 'Conversions are important, but keeping the conversions you already have is even more important from a revenue perspective.
Keep it simple: Find your ideal profile, lure ‘em in and keep ‘em. The true evaluators are out there.
About the AuthorMore Content by Geoffrey Walters