Have a huge base of free trial customers? Check. Next step is where it gets trickier, as per Forbes, only 25% of SAAS customers who opt for free trial go on to become paid customers. The defect rate is extremely high and is very less likely to change overnight.
Lucky for you, there is still plenty you can do to make these customers stick. Let’s look at 10 easy ways to convert that customer:
Segment the free trial users:
The low percentage of conversions from free trials makes one thing very clear that many customers in the herd are not there to buy but to merely take advantage of the freebies. There is not much you can do to stop them for signing up for your service, but there is plenty you can do to convert them from non-profitable to profitable customers.
First step to that is segmentation. Totango has made the job easier for us, it has segmented the free trial users into three categories – True Evaluators, Potentials and Accidental Signups.
Looking at the engagement of each of these categories with your software, you can decide separate approaches to be taken to treat these customers. As is evident from the graph, true evaluators are the most likely to convert to paid customers, followed by potentials with accidental signups being the least likely to convert. The latter may sound like the least important, but these are qualified leads and can be nurtured (even after the trial period) to become paid customers in future. Hence, they definitely can’t be neglected.
Analyze the Common Conversion Activities (CCA) metric:
The investment firm, Sixteen Ventures – specializing in SAAS, has come up with a perfect metric for our said problem, converting the free customers to paid ones. This metric is called the common conversion activities or CCA metric. CCA is formed by carefully observing and analyzing the free trial period activities of the paid customers. It essentially is a set of actions that if completed during the trial period, lead to conversion.
Once you know the set of actions have been completed, you can estimate that the customer has reached the stage to convert; this is when you start enticing them towards a paid subscription. On the other hand, if the customer hasn’t completed a set of actions even when the end of free period is nearing, there is a threat of churn. Knowing your customers can help take the right course of action with them.
In continuation with CCA, you can define each action to be completed as a milestone. Further on, customer behavior for each milestone should be tracked to understand if the customer is interacting with the software in the fashion we expect them to.
Different milestones can be major events in the customer’s journey, for example in wordpress:
- User created their home page
- User added a new theme
- User shared their first post
Triggered emails have to be a part of the customer’s cycle from the beginning of their free trial period till they convert to become paid customers. These emails are the first personal interaction of your firm with your potential revenue generators and have to be handled with a good amount of personalization and customization, keeping budgeting constraints in mind.
Emails are the best way to nurture a lead and should be triggered at precisely correct occasions or the customer will turn their back from the annoyance. Time triggered emails will just bombard the inbox and get deleted without being read but occasion driven personalized mails will make their place in customer’s mindshare. Examples of such mails will be follow-up mails, “You just viewed the classifieds section of our website, here is a video on the different ways this section can help you”. Importance of content in e-mailers can’t be emphasized enough.
A client can be guided towards the end point using emails and website indicators to a large extent but the action will never be complete without human interaction. When it comes to shedding our wallets, we all want some assurance and a source to be held accountable. This is the most important role played by the customer service unit. Every client forms a relation and builds a level of trust with the customer service executive assigned to their account, this can be of importance when the time to decide upon the paid account comes.
Source: Robert Half
In a SAAS product, plenty of technical uncertainties can easily arise while using the trial version. While some can be solved easily by going through the standard list of FAQs, others need a more interactive interface which is fulfilled by customer service. Some healthy practices for the customer service team would be:
- Maintaining published standards (SLAs)
- Transparency with customers
- Support is easily accessible: this includes a phone number, email id and chat box
- Be proactive in responding to the customers rather than reactive
Today, with the fast pace with which technologies are catching up with each other – customer service remains the only differentiator.
Train the customers:
Customers take up the free trial to explore, experiment, like or dislike the software. In this process of exploration, it is upon you to help them form a positive opinion about your software and show them how you can solve their problems rather than becoming complacent in trying to flaunt the features of your software. Customers are not buying features; they are buying a solution to their problem.
When they first enter your software, the customer might be like a kid on their first day of school – lost and in search of education. Educate the customers through interactive videos, screenshots and documents and engage them to make them derive the maximum value they can in the short span of time.
Extended trial periods:
Sometimes, the customer might be very close to completing the milestones that we spoke about earlier but still hesitant to give in. In such instances, giving extended trial periods might help you acquire the customer that otherwise would have been lost.
However, you have to be wary of who you are giving this extended trial period to and get a feedback from them on if they need this extension to understand the software and will convert after the extension is over or not. This communication can be done through an interactive email or at best, phone calls.
Build a knowledge repository:
As per a 1999 TERP report, for every 26 unhappy customers only 1 makes a formal complain.
Having a customer support system in place is vital but can’t is a part of the larger customer interaction system. Most customers prefer an interactive method to resolve their queries, but there are also many who prefer looking up the answer themselves. For these customers, a repository such as Frequently Asked Questions (FAQs) or explainer videos will be the right form of customer service.
Building this knowledge base might be a laborious task but in the long run, it is a cost saving mechanism that will bring down the manpower cost, time cost and calls cost to a minimum.
Reduce conversion Friction:
The last step of the process of conversion always generates some level of friction for all user segments. The friction usually comes from one of the following factors:
- Previous encounters of discrepancies between fact and assumptions in terms of subscription length, cost and opt-out options
- Unsure about technical support provided during the trial period
- Limited payment options
- Usability of the data created during the trial period in the paid subscription
If careful attention is paid to all these factors, you are sure to convert, at the least, the engaged and enthusiastic customers.
Offers and Content:
At the verge of conversion, many a customer is happy with the product but hesitant to pay the amount prescribed. Their hesitancy is reflected from the time spent on the checkout page. At this point, a small offer from the company will prompt the customer to complete that purchase and also become a grand gesture for the customer, making them a loyalist of the brand. The small cost at this point can later be recovered from cross-selling or upselling once the customer is in the game.
For these offers, e-mailers, training and all other essentialities of the customer journey, content is the most important food for the customers. The right content, framed engagingly will take you places. It might be an expensive investment but is worth every penny spent. It not just engages current customers but if the right type, it is also shared and captures audience at a much larger scale. It essentially turns users into evangelists for your software.
All the above factors in conjunction assist the free trial customer to convert into a paid one. You are now ready to form a huge paying clientele.