What’s your conversion rate from trial to paid?
Do you know how many of the people who start a free trial end up paying you real money?
Customer.io has improved from a bad conversion rate to a slightly less bad conversion rate. Here it is reported from our internal dashboard:
We currently convert at 3% from sign up to paid. For every 100 signups, we get about 3 paying customers.
(edit: I reported this wrong. Our conversion rate is actually 6 – 10%)
Your conversion rate might be higher, or it might be lower. Whatever your number is, it is likely your conversion rate will be vastly different to ours because your business is different.
Everything you do affects your free-to-paid conversion.
Converting people from free-to-paid is the sum-total of every decision you’ve made and everything you do in your business. Some decisions get more people in the top of the funnel but those people may not be high quality leads. Other decisions might send fewer people through your funnel but have a much higher success rate.
- Do you have a trial period?
- Do you require a credit card up front?
- Are you acquiring signups through advertising?
- Can people understand what your product does before signing up?
- Do support questions get answered quickly?
- How helpful are your on-boarding emails?
- How quickly do pages in your product load?
Here are just a couple of the decisions Basecamp has made:
Some unique things that affect conversion from free to paid for Customer.io are:
- There’s a free tier with no time-pressure to pay.
- We don’t do paid advertising — all signups are word of mouth or from reading blog posts like this.
- Sign ups receive our lifecycle emails to help them get started.
- Our entry level paid plan is $50 a month.
- We try to make our documentation comprehensive
- We have a features page and pricing to hopefully pre-qualify signups.
If you’re a SaaS business where the average customer has more than $2000 in lifetime value, it may be worth some time to try “Concierge Onboarding”.
Can Concierge on-boarding improve free to paid conversion?
For the past several months, I’ve been hearing people talking about “Concierge Onboarding”.
What to work on (SaaS): Concierge + automated onboarding, pricing strategy, paid acquisition, scalable content generation, lifecycle email.
— Patrick McKenzie (@patio11) April 1, 2014
With concierge onboarding you spend time helping your prospective customers get up and running with your product. For Customer.io this might mean working with a company’s developers on implementation details, or working with marketing teams to design triggered email campaigns that map to their activation funnel.
If I had to put money on it, I’d guess that doing “Concierge On-boarding” might boost our conversion rate at least from 3 – 4%. At the high end it could even double our conversion rate.
I’ve designed an experiment where we can test this hypothesis.
Here’s what I’m doing. If you want to set up your own Concierge On-boarding experiment in Customer.io, you could use similar steps:
Step 1. Create a triggered campaign
My triggered campaign is simple.
I’m sending an email to people who have signed up, 2 days after they sign up.
However, I want to ignore the people who sign up with free email accounts (like Gmail, Hotmail etc..). I don’t have enough time to offer Concierge Onboarding to everyone and in our experience, people who sign up with personal email accounts don’t convert as well.
I also want to track a “conversion” for my campaign. We want to track how many people end up as paying customers.
Step 2. Write your onboarding offer email
Feel free to steal my email copy. One temptation I had initially was to use software to streamline booking time in my schedule. Asking people to click on a link to book an appointment didn’t get as high a response rate as this more manual process. Since I actually want to talk to people, I decided to schedule more manually.
Step 3. Create an A/B test
If you want to see how offering concierge onboarding compares to not offering that service, you can create a 50/50 split a/b test.
In an A/B test, a common thing to do is to test two different emails to see which copy does better.
However, rather than sending the variation, you can configure the email to send you a notification:
That way you’ll be able to make a mental note of who didn’t get an offer. They are now in your control group.
Can concierge onboarding double our conversions?
In the past, the biggest indicator that a company was going to be successful in Customer.io and ultimately pay us is that they got started on their own and managed to send data and set up an email without talking to us.
Customer.io is a sophisticated product, and probably intimidating for most people. It’s not surprising that if you didn’t make it on your own you probably will abandon the product and not convert.
Will concierge onboarding double our conversion rate to paid from 3 – 6%? I really have no idea, but I’m going to be spending the next month or so working my butt off to help some people get up and running in the product. If it works, it should have a meaningful impact on our monthly recurring revenue. I’ll let you know either way.
Have you tried concierge onboarding? What changes have you made to your policies, pricing or product that have had a meaningful impact on your conversions from free to paid?
Share them in the comments below