Behind the question of whether a billing system can help your SaaS business grow is the question of what it means for a SaaS business to grow. This guide tackles both — it creates a model you can use to approach SaaS growth and a 360-degree view of how your billing system fits into it. Read More >
While some people are beginning to argue that the concept of freemium has run it’s course, we don’t believe it for a second. Offering a freemium model is still the single best way for subscription businesses to convert interested website visitors into paying customers. Knowing whether or not to provide 24/7/365 customer support is another matter entirely.
According to Uzi Schmilovici of Gigaom, one of the biggest challenges facing SaaS business owners is knowing how much of their product to give away during the freemium stage. We’re firm believers that your company should offer the best support possible, and here’s why:
1. Your Word-of-Mouth Will Soar
There are few words with more weight and positive connotation to consumers than “free.” Schmilovici highlights the fact that freemium trials can be a silver bullet for driving massive amounts of traffic to your subscription business website, because “people LOVE to talk about free products and recommend them to their friends.”
With a freemium model that doesn’t just include a stellar product, but also allows users access to friendly support staff, the value and frequency of your word-of-mouth recommendations may soar.
2. Remove Features, Not Help
Freemium is expensive, and virtually every subscription business has fallen victim to subscribers who’ve never intended to purchase the product. The Wall Street Journal recently reported that the average conversion rate into paid customer by trial subscribers could be as low as 1-2%.
Chargify (our competitor) is a prime example of a company that nearly faced bankruptcy due to a poorly-designed freemium strategy. However, the key to reducing your costs associated with trial subscriptions isn’t removing support, it’s removing features. There needs to be a clear incentive for your users to upgrade, and that incentive shouldn’t be access to help desk. It should be a clearly defined list of improved features and functionality.
3. Support is Key to Engagement
Time and time again, subscription business experts are discovering that engagement is the single biggest factor in determining whether or not a trial/freemium subscriber will convert into a paid customer. Even if someone has the budget and authority to convert into a paid client, they’re not worth your sales team’s time if they didn’t log-in once during the 30 days. Alternatively, users who have integrated the software into their daily workflow and learned to utilize it’s functions are most-likely to convert.
For some subscription businesses, improving their conversion rates could simply require improving engagement during the trial period. Limiting or preventing freemium users access to support will likely result in frustrated users who simply abandon the product entirely during their freemium trial, and potentially tell their friends that the product is too difficult to use.
Provide your prospects with the tools to engage and succeed, and develop other incentives for conversion that won’t negatively impact their experience.
Now its your turn. Please use the comments box below to share your experience with us.
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