Saas companies, lets talk converting free users to paid
Austin Marks
26 replies
As the title suggests, I want to discuss strategies that SaaS companies have implemented or hope to implement on converting their free users into a free trial, and hopefully a paid plan.
What have your most successful campaigns been vs some of your worst to get these conversions?
Hearing the details of both successful & non-successful campaigns could hopefully streamline the process for other startups and help increase paid users!
Replies
Mehmet Tas@mehmet_tas
I get the most commission per transaction or idea failed in Turkey it was not very valid. 😊
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Meta Nutrition
@mehmet_tas Can you explain the company and what you more by that a little more, please ;D
@austinmeta As freelancers, we were enabling employees to bill corporate customers.
This is simply a question of product imo. In developing what you call a campaign I would think of more of baseline usergrowth and then growth hacking through product utility/feature improvement. The overall conversion will be a ratio of actual willing to convert to utility metric. Tho it is hard to say the killer pay features in any industry, one can see a general path towards optimization of monetization to in-band flows of the consumer. Uber Eats is a good extension of this. I would hazard to guess the goal of your users is not a nutrition app but to feel great, the way to do that they have learned is through nutrition management. Finite list of innovative features you believe make the difference should efficiency give you a few to test without overloading your conversion optimization testing.
Baserow
I agree with previous commentators and want just to add that it is very important to collect feedback and suggestions while the product is free, and implement comments before switching to paid version
Zipcan
My experience is mostly with enterprise sales where we went from (screen share) demo to contract. It was slow but the ACV and LTV were so high it was worth it. The problem we ran into was it still took a while for the customer to see value after the enterprise contract closed. I am working on my next company now (www.zipcan.com) and we are trying to change this dynamic. Our ideal vision is to give the product for free in the early part of the sales process to allow the customer to qualify themselves. Then when product usage or particular high value use cases show up, we offer paid versions to enhance those. We are in the think of it so I can't say for sure how it works, but sometimes it is helpful to see how others are designing their CAC model.
Meta Nutrition
@fritzly I just mentioned above how we are taking a similar path to what you are trying out too.
A majority of our platform is completely free and users will have, at the very least, access to every feature in one shape or form even if it is ultimately a pro (paid) feature. You will get that enhancement by upgrading your account but it's certainly not required to get value from using the web app.
@austin @austinmeta I am totally with you man 👏👏👏
Meta Nutrition
@austin @mirko_maccarrone Its everything, right! None of us can operate without revenue and its super helpful to hear what other people are doing or have tried
I think what a free vs paid plan offers is pretty crucial. If you give away too much in a free plan and users have no gain in switching to a paid plan, then it will be difficult to convert. It's good to look into what the direct competition offers and propose something that is competitive (maybe your free plan gives away what competition requires to pay for), and the pricing is adequate to the value your product gives to your users.
On the other hand, it could be that you are also targeting not the right kind of users, look into the CLV of the existing ones and adjust your acquisition strategy to getting more of the users that are likely to pay for your product.
Meta Nutrition
@aleksandraszte2 For Stormly I noticed you give free demos for a significant chunk of time as well as offer a free tier.
What have you noticed as being one of the biggest factors to get users to make that switch from free to Small?
@aleksandraszte2 I disagree with focussing on what the competition are offering. I tried that and just couldn't compete. My main competitor is a huge company with funding and ad revenue.
When I forgot about them and just focussed on what makes my company awesome then I started getting paid users.
Hi! Everyone is advising not to give everything in free plan and to show value during it. It is good advice for freemium model. But how about free trial? We give 14 days to try our product. But for different reasons users didn't get the value and don't go on paid plan. How can we help them?
Besides onboarding and usefull content?
Meta Nutrition
@lina_ka I think what the commenter above said, Matt Davis, applies to this. If you ONLY offer a free trial with no free option what so ever it depends heavily on what type of platform you are running. There are many instances where I start a free trial and accomplish my goals well within the time constraints that the trial put on me then never have a need to upgrade. If you can create a ton of value at a good price that is a great start.
Make sure you talk to your customers as best as possible and ask them about their experience, what they would have liked to see, why they aren't sticking with your software. Those unsubscribe / exit surreys if you don't already implement them could be very insightful.
free plans are limited
paid plans can offer different price
as you grow you can change it
Feedo.xyz
I guess it's about product utility. It will be to difficult to convert users into paid ones if a product does not solve their problems. Also payment plans can be another barrier. When we tested out our system at Feedo.xyz we want to give our users a full control of their payments, so they are able to pay for the service from month to month without 3-6-12 month plans. So they can pay when they plan to use it.
@vlad_zaev Agreed. It's difficult to "convert" users to paid if they are not finding the product useful. I think the best way to do this is to focus on the beginning stages of the user lifecycle in order to help the user find high value in your free offering, and offering additional long term value in your paid offering(s).
If you focus on activating users in their initial experiences, nurturing them to be successful users, you'll set yourself up for higher probability of free -> paid conversion in a more natural way vs. trying to "sell" users on your paid service.
One tactic that is sometimes helpful for users who have been active a little while is to offer your paid service for free for a short time in order for the user to try it. This lowers the barrier, but gives the user a taste of the paid experience.
@vlad_zaev @sean_foster1 Good points!
Regarding the tactic you mentioned, from our experience, giving more free service to already free users usually doesn't bring conversions.
It's good to keep in mind that there is a segment that will simply not pay, instead, would rather look for a similar offering for free.
From our experience, it is good to review whether the free plan doesn't give away too much, unless at this point, your strategy is to gain the biggest amount of users, no matter if they pay or not.
If your goal is profitability, sometimes less (paying users) is more (than a bunch of free-planners).
Meta Nutrition
@vlad_zaev @sean_foster1 Very good insight guys, thank you. That is more or less along the lines of what we currently try and do. 95% of our features are completely free or offer a smaller taste for what the upgraded paid version of the feature would be.
We never try and stonewall users or block off any one thing completely because we just want to provide value to them and if they want the additional benefit of increased functionality of a specific feature they can choose to upgrade.