Building the First Software Platform For Executive Assistants
Base CEO Paige McPheely explains how High Alpha’s product-led growth expertise helped Base build a new category of software.
Free Trial Marketing Strategy
There was a time when great innovations became massively profitable through the efforts of persuasion marketers. Salespeople bonded with customers in ways designed to channel their impulses to buy to their company’s products. This traditional method of sales was tremendously successful, but modern customer attitudes have changed.
Now potential customers usually do not have time to schedule with a salesperson. They do not want to interact with vendors. They want to try out new software and hardware — for free. Marketing no longer leads growth. Products lead growth, and smart vendors stimulate sales with free trial marketing strategy.
The driving force in the free trial marketing model is the product. Vendors create new products that fill old needs better than their competitors. But it is a mistake to suppose that products that customers use again and again to boost their own bottom line and increase their control over business variables “sell themselves.” The try-before-you buy model assumes easy installation and minimal need for customer training. Products that are “too innovative” will show a weakness of free trial vs paid trial. If your product will revolutionize your customer’s industry, you need to get paid up front. But sales of most innovative software and hardware products thrive with a freemium, try-it-before-you-buy-it strategy.
Free Trial Marketing Campaigns
What are the characteristics of successful free trial marketing campaigns? When is product trial marketing the optimal approach to rolling out a new product? Let’s consider some situations in which free trial marketing strategies probably aren’t optimal:
- The new product is the first of a new category of product within an established brand. Successful software companies understand customer pain points, training needs, and core challenges in using their products. Offering a novel product as a free trial incurs risk of churn.
- The new product is high-niche product for a high-niche application. When the total addressable market is small, relationships have an outsized impact on sales. The products that do best with free trial marketing campaigns are scalable.
- The revenue goal is to close customers with high lifetime contract value. It’s never a good idea to rely on just a few customers to generate annual revenues, but large accounts can be extraordinarily profitable, if managed with skill.
- The company has a product demonstration program staffed by a salesperson. It is seldom efficient to offer both a product demo and a free trial. The salesperson should seek to convert at the end of the demonstration.
There are other situations in which free trial marketing strategies are usually the best bet, such as these:
- Customer acquisition costs are high. If it costs more to acquire a new customer, eventually the company will have to pass those acquisition costs to customers. An inefficient sales-led customer acquisition model can open a path for competitors to lure customers away with a lower price.
- The marketing department is great at distributing information but deficient in closing sales. Information content consumption is a poor measure of campaign effectiveness. Sometimes the only way to make a customer is to distribute the product, not information about the product.
- The sales team closes large sales on the condition of a few product tweaks that product engineers may or may not deliver in a timely fashion. There can be bugs in freemium products, but as long as they are fixed quickly they won’t cancel sales.
Free Trial Conversion Rate
How do companies assess the success of marketing strategies?
There are numerous metrics that obscure the success of marketing. Some companies measure the success of a campaign by the number of email messages sent. Others measure success by the number of freemium users. These measurements are an excellent indicator of just how busy the marketing department may be, but not how a campaign contributes to product development and ultimately to the bottom line.
For most free trial campaigns. a better measurement is the free trial conversion rate. It is easy to compute the free trial conversion rate. This is the number of people who sign up for a free trial compared to the number of people who visit your website. This number is a first pass at measuring success at finding customers. Free trials are usually vastly more successful at finding new customers than sales campaigns. Why?
There is a huge problem in a sales-led go-to-market strategy for almost all new products. According to data from SiriusDecisions, over 98 percent of qualified marketing leads fail to convert to new business. Put another way, the conversion rate for product rollouts that measure marketing productivity in terms of generating leads is less than 2 percent.
Why does the traditional sales approach have such an awful conversion rate? One problem is that sales people are incentivized to act as gatekeepers of information, rather than sellers of products. Downloading a white paper is not the same thing as buying a product.
Another problem is treating “intent” to buy as actually buying a product. There is an old saying about the destination at the end of the road paved with good intentions. And a third problem is the general friction in the process of getting paid for product.
Almost any free trial conversion rate greatly exceeds the average sales-led conversion rate. Conversions in publicly reported free trial examples, most of which include easily accessible free trial landing page examples, range from 4 percent with Dropbox to 30 percent with Slack. Getting out the news of a free product trial will typically result in 8 to 10 percent free trial engagement. Smart companies collect information during free trial engagement that bolsters future sales.
Increase Free-Trial Sign Ups
Marketing and product development can mine a treasure trove of data from free trial engagements to increase free-trial sign ups every hour of every day, 365 days a year. The necessary data are supplied by customers themselves. Vendors need to mine that data to look for patterns in software use by your best and worst customers.
Companies need to look at usage patterns to answer these questions:
- How do your best customers regularly use the product?
- What do your best customers not do with the product?
- What features did your best customers use first when they downloaded the product?
- What are the identifiable characteristics of your best customers — use of other products, demographics, team structure — that are most clearly associated with an increase in free trial sign ups?
Another essential task to increase free trial sign ups is looking at the behavior of churned customers, customers who tried the product but did not purchase it
- Which product features were used by converted customers that were overlooked by churned customers?
- Which product features were used by churned customers that were not used by converted customers?
- Were these churned customers in the product’s target market?
- What was different about the product experience of customers who failed to purchase the software?
The answers to these questions should lead to A-B testing. Tweaking product presentation can be followed by a second round of conversion analysis. This data should feed into changes in the email campaign.
Emails To Use For Free Trials
There is a tried but not necessarily true formula for free trial onboarding emails. The typical free trial email sequence goes something like this: Create content. Design landing pages to capture leads. Nurture those leads with automated product trial emails until one day, as if by magic, your free trial email template produces a customer.
There is a better way.
The free trial email sequence needs to be seamless from first touch to conversion and renewal, and at every point in between. A single free trial email template will not work for every potential customer. Examples of trial emails, especially examples of free trial onboarding emails, need to be generated by smart segmentation of users into meaningful cohorts. Automated statistical sampling should create evidence-based intelligent scoring to identify the customers most likely to convert for additional attention. Analysis of churned emails should lead to multiple trial expiration email examples, and analysis of the best customers should drive upgrade email examples.
Nearly every provider of software as a service (SaaS) profits from professional assistance with emails to use for free trials, examples of trial emails, the free trial email template and free trial email examples, product trial emails, upgrade email examples, and free trial email best practices.
SaaS Free Trial Best Practices
So how do companies operationalize the SaaS free trial best practices? How do companies move current and new customers through the B2B free trial sales funnel? Here are the very basic features of an effective SaaS trial model.
Let’s begin with the welcome email. The first task of creating an effective welcome email is training your audience to open your emails. Then you need ro set expectations for what’s coming next.
Your welcome email results in a free trial. Great! Next you need to nudge your customers into greater familiarity with your product. This is where usage-tip emails come into play. Be careful only to offer information that increases satisfaction with the trial product. You want to keep onboarding going in a straight line. These are the emails for sending customers to a specific product page, a help center, or a best practices page. For marketing any free-trial SaaS the time to send the information emails is when a customer does or does not complete an onboarding task.
When you have delivered on your value (and your software should be able to tell you when customers have achieved what they need to achieve with your product), then you need to send your sales-touch email. Don’t send this email too soon. Your customers need to understand what your product can do for them. But don’t send this email too late. You should not let your customers think of your SaaS as shareware.
And now that your customer has bought your product, occasionally remind them of features that make their business lives even easier as they become more and more familiar with your software.
No company has to go through all these steps alone. High Alpha’s expertise in building product-led growth companies makes us the ideal place to start a business. Our combined expertise across a variety of disciplines helps your company move faster and go farther. Learn more about the High Alpha venture studio.
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