Since the rise of the internet, and, in particular, the rise of free content— customer behaviour has changed dramatically, which has caused hurdles for any brands to persuade customers to open their wallets.
Whether it’s free perfume, chocolates, yogurts or anything else, people would throng to that place to try out “free samples”. But when money comes into the picture, they often get disinterested.
As a Product Manager on Monetization, Khushbu Bhalla walks a careful line between acquiring new paying users and not churning existing ones. In this article, Khushbu shares why free trial users churn, how to unlock monetization through product and specifically, Khushbu’s approach to converting free users to customers.
What’s inside?
- Challenges of converting free to paying customers
- Main reasons why free trial users churn
- Five Steps to Unlock Monetization Through a Product
- Eight strategies to convert free trials users into paying customers
- Lesson Learned
- Who is Khushbu Bhalla?
Challenges of Converting Free to Paying Customers
Founded in 2006, Deezer is one of the first generations of music streaming software platforms. In a fast-evolving industry, they have kept the momentum by partnering with media and technology brands to enable a connected listening experience for users.
One of the main ways companies acquire new customers and gain their loyalty is through free trials (freemium plans).
This is a great strategy in theory. But in practice, the numbers tell a different story:
This asks the question: How do you convert free customers to paying customers?
Before converting free users into paying customers, you need to understand that most users sign up to see what outcomes your product can give them, and not just to check out your product interface.
Rarely someone looks at your product and say: “Wow, this is an excellent list of features the company offers. I can’t wait to sign up and try each one of them!”
If you want to convert trial users to paid ones, you should show them the value your product offers and how it will help them achieve their primary outcomes. Without that, no matter how valuable or helpful your product is, most users won’t bother signing up for the paid version.
Fortunately, there are many actions you can take to influence that process and showcase your value.
Main Reasons Why Free Trial Users Churn
What are the reasons why some trial users convert and others cancel, deactivate, or never log in again?
Here Are the Most Common Reasons Why Trial Users Fail to Convert:
- Your product is not a good fit between what the user expects and what the product delivers.
- The activation process workflow only focuses on conversion and not on building sticky habits around using your product.
- Your product is complicated to use or navigate, and the whole onboarding experience is inefficient.
- The price of the product doesn’t match its value.
5 Steps to Unlock Monetization Through a Product
I am currently part of the monetization team at Deezer. When I say monetization, it’s not just about converting users to the paid tier but also monetization through ads.
It’s a careful balance. If you force people to pay tiers, they might churn and move to other products if they are unhappy. We have to do extra work to choose the correct conversion entry points, like a certain number of skips or too many ads.
Follow these 5 Steps:
Step 1: Make Your Offer Visible
Our starting point was ensuring our offers were visible to every user. Once we had an exclusive album release, we realised that the conversion could double with exclusive content. Next time exclusive content is involved, we reach out to users to let them know about the time-based offer.
Step 2: Optimise the Conversion Path
The next step was making the process easier. Within two clicks, you can pay and have all the information needed. At this point, it was essential to look at data. We try to map out the entry points in the system, map out the funnel, make hypotheses, and test, test, test. We have constant A/B testing on the steps, language, and journeys.
Step 3: Dig Into Data
We have a big data team that creates a dashboard and give us access to the information we need to start asking questions:
- What platforms do customers come from?
- What quality of sound do they listen to?
- What devices do they play on?
- Could we make personalised offers for them?
- What are the leading conversion indicators?
- What are the churn or conversion patterns?
Step 4: Communicate Strategically
We can build better relationships by assisting users through their journeys, guiding them, and making sure the right offer comes to the right person at the right time.
Step 5: Localise
When it comes to music, culture, language, location can have a considerable impact. Specific content can have a significant influence in certain markets.
We work closely with the markets to understand what offers are more relevant to them. Finding these conclusions can be a lot of detective work and challenge if the teams are not working closely.
8 Strategies to Convert Free Trials Users Into Paying Customers
1. Give a Sense of Urgency
Give customers the feeling that they will miss out if they don’t sign up for a product. Make sure customers fall in love with your offer during the free period and decide it’s worth the investment to keep it.
Why not offer a free trial of your paid version for a limited time only? Use this limited time to give your best to show how extraordinary your product is.
2. Try a Promotional Period Instead of a Free Trial
Another proven approach is offering a promotional period of a product instead of a free trial. A promotional period refers to the limited time a user can sign up for your product and receive a promotional service or a gift.
The strategy behind this is the following: If the promotional service or gift is appealing enough, the customer may sign up due to the fear of missing out on this tremendous promotional period.
3. Use email to your advantage
Using email to your advantage is one of the best ways to urge users to go from free to paying customers. Develop customer-centric email campaigns that will show the user how much you care about their experience and do everything to make them happy and loyal to your brand.
What to include in these emails?
- If you have a complex product, send tutorials or explanations to encourage customers to use it again in case they get stuck at some point.
- Start with a free trial, and then send an email with a promotional service or gift as a thank you.
- Regularly talk with your users to ensure they are enjoying your product. Make it clear that they can ask you any questions and get your help at any time.
- Remind them of the upcoming end of the free trial and include your CTA to encourage them to make a decision faster.
- After your trial period ends, send a follow-up email to ask for feedback and improve your marketing strategies based on it.
4. Use Personalised Content Only
Personalisation is one of the strategies that can definitely help you win customers in a nutshell.
Personalisation can take on many forms.
Start with including specific details in your email campaign such as:
- A personal message with a photo from the CEO of your company using the new user’s name.
- Focus on emails that are triggered by a user’s behavior because individualized responses can make your product more personal to customers.
- Reach out to users who didn’t sign up for your paid product with a personal message and ask them for feedback on how you can improve.
5. Ensure Customers Get the Most Out of Your Product
One of the main challenges with subscription products is that if the users don’t get the most out of the product during the free trial, they won’t be compelled to consider paying for the product in the future.
To get around this issue, ensure that your new user has every opportunity to enjoy your product to its fullest extent.
To do this, send emails asking for their feedback every time a customer finishes their free trial. You can also do this during the free trial. Ask the customer if they are enjoying your product and whether or not they need any help.
If you see they are struggling, follow up with step-by-step tutorials or videos or encourage them to have a live chat with your customer support.
6. Organise Webinars
Along with sharing helpful videos, organising webinars is another excellent way to engage customers over your product. Don’t allow the full potential of your product to be missed because you didn’t offer the proper instructions at the beginning.
Webinars are an easy way to train customers on how to use your product and keep them engaged in an ongoing way.
7. Improve Your Pricing Range
If your website’s pricing page doesn’t accurately represent what the paid product offers, you may miss out on many paid customers.
Here is what you can do:
- Keep things simple and straightforward. Don’t overwhelm them with too many details.
- Show the prices in straightforward language and ensure no hidden costs can pop up later on.
- Make it simple for anyone to opt-in or out. Avoid an automatic start of the paid product at the end of the free trial even before the customer can cancel.
8. Gather Feedback and Make Improvements Based on It
No company is perfect, and the best ones learn from their mistakes by asking their customer for honest feedback.
When the free trial ends, ask the following questions:
- Which of the following did you like most about this product?
- Which of the following did you like the least about the product?
- What is the main improvement we can make that will make you reconsider paying for our product?
Not every answer to these questions will be helpful, but you can collect insights that will guide you to more thoughtful decisions in the future.
Lessons Learned
The main reasons trial users fail to convert can be the following: your product doesn’t deliver what your user expects, the product price doesn’t match its value, the activation process workflow solely focuses on conversion, or the product is troublesome to navigate.
To convert free trials users into paying customers to apply some of the following strategies: give a sense of urgency, try a promotional period instead of a free trial, use email to your advantage and personalized content only, ensure customers use your product, share videos and organise webinars, improve your pricing rage and collect feedback and make improvements based on it.
Who is Khushbu Bhalla?
Next Steps
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