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How could I know that my users are ready to finish a free trial and start paying for a product? I’m not even surprised that a lot of entrepreneurs have problems with finding the answer. In my opinion, onboarding is one of the hardest areas in marketing. So if you have decided to include a free trial in your onboarding strategy, sooner or later, you must find a way to convert trial users into paid customers. And this might be a bit tricky to do.
So from the following post, you will learn:
In the book “Startup Owners Manual” written by Steve Blank, the author introduced a methodology called customer development. Customer development suggests that you should apply an engineering or scientific method rather than use intuition and beliefs in order to validate the ideas. Steve mentions that companies should validate their product and market with prospects because it is the easiest and cheapest way.
Eric Reis includes customer development as a big part of the lean startup methodology that he created. He describes it in his book “Lean Startup” and presents this concept at many startup conferences around the world. These two books show us that we can get the most valuable information just from our customers and prospects.
Before we start to optimize the free trial strategy, we should check what actions users do with a product and what value they get from it.
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Every product is defined by a different set of features, so it’s hard to generalize what exactly we should measure. It simply depends on a product’s nature. That’s why I’ll describe how it looks in Droplr, the company I work for.
Our four main features are cloud storage, file transfer, screenshot capture and screencast recorder. Each of these features has its own specification. They can be described, for example, by file type, file size, content, etc. When a product is described that way, you can create an infinite number of actions. The thing is to find a few which are the most meaningful and start measuring them.
I can’t tell you what action is the best to describe customer success, but I would start with a more general rather than a specific one. In Droplr, I decided to measure the events when a user uploads (or creates) a file.
Every time a user takes any action in a product, he or she is getting used to your solution. So with every next action, he or she is less likely to churn from your product. If we take a look at it from other perspectives, we can find a breakpoint (or rather period) after which users create a habit of using your product on a daily basis. At this moment, for the first time, we can notice that users are becoming more and more active.
You will see that this happens just for some of your users. They become your most important leads because of two things. They are more likely to buy your product, and they are a great source of feedback. Analyzing their steps since registration, you will see what makes them use your product. The thing that helps them see the value might be completely different. It can be a set of features, an easy interface, clear communication or something else. I think it will be a good idea to talk to some of them and simply ask what they like the most about your product.
Now, once got to know what your validated successful users care about, you can adjust the onboarding process a little in that way. Remember to expose the things your user mentioned as important. Every customer cares about something else, so you should repeat the whole process several times and improve all shortcomings.
At the end of this article, I want to say that you can’t sell a product to everyone who decides to test your solution. In a world where we can buy or test something with just a few clicks, and marketers show us uncountable values of products, people sign up (or even sign up for a subscription) just to see if a new solution will work for them. Unfortunately, in most cases, they won’t because a product is not designed for them. Always remember who your product is dedicated to. There is no sense in selling a product to an audience that can’t get too much value from it.
You should look for signs like increased usage and growing engagement. Monitoring your free trial conversion rates and when exactly your users are deciding to convert can also give you plenty of insights.
A free trial conversion rate is the percentage of trial users who become paying customers. To calculate it, divide the number of users who converted from a trial (or free version) to a paid subscription by the total number of trials. Then multiply the result by 100 to get your trial conversion rate as a percentage.
If you are offering a trial version of your product, then the trial conversion rate should be one of the key metrics you will be tracking. If it's high, then your trial experience is good enough to motivate users to convert. But if it’s low, you should look closer at your trial offering.
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Expert in B2B pricing, monetization and value-based selling strategies. Over the past year, he has completed over 40 consulting projects in Europe. Prior to founding Valueships, he worked at McKinsey & Company, mainly in the TelCo, software, and banking industries. He completed his doctorate in pricing in SaaS start-ups at the University of Economics in Wrocław, where he also lectures.
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Expert in B2B pricing, monetization and value-based selling strategies. Over the past year, he has completed over 40 consulting projects in Europe. Prior to founding Valueships, he worked at McKinsey & Company, mainly in the TelCo, software, and banking industries. He completed his doctorate in pricing in SaaS start-ups at the University of Economics in Wrocław, where he also lectures.
