It’s a problem that is common across the SaaS landscape: how to convert free trial users to paid subscribers. Especially now, during this time of economic crisis, the importance of focusing on your current users or even past clients, is made even more critical. When examining the paid activation rate of your free trials, what is your benchmark? Of course, it depends on your product and segment, but if you said your conversion rate is well below 10%, you’d be in the majority. At BuzzBoard, we work with many enterprise tech companies that target the small to medium-sized business segment, and they struggle with the problem of mining their free trial rosters. Over the past six months, we’ve analyzed more than five million of these free trial account records from leading companies. During this process, we’ve identified several common themes and recommendations. The accepted SaaS industry playbook encourages everything from:
- Creating a sense of urgency with the free trial user
- Sending emails at the end of their trial period
- Conducting personalized demos and outreach programs
All these recommendations are sound, however, they often result in failure due to bad data, or a lack of data—both of which can be addressed.
Bad Data
The age-old adage “garbage in, garbage out” couldn’t be more relevant when it comes to the information collected from new users. In most cases, the amount of data required from a new user is surprisingly minimal, typically consisting of basic contact information such as name, email address, and company name. However, it’s astonishingly common for this information to be incomplete, with a staggering 90% of cases lacking a valid URL or business website.
The absence of this critical piece of data severely limits the visibility into the DNA of the business, making it challenging for marketing and sales teams to offer personalized outreach. Without a comprehensive understanding of the business, it’s like trying to navigate a dark room without a flashlight. The lack of insight into key growth signals such as revenue, headcount, and industry trends makes it difficult to tailor marketing strategies, identify potential customers, and develop targeted sales approaches.
Moreover, the absence of a valid URL or business website can also hinder the ability to verify the legitimacy of the business, making it challenging to build trust with potential customers. In today’s digital age, a professional online presence is often the first impression that customers have of a business, and its absence can raise red flags.
Furthermore, the lack of data on the business’s online presence can also impact the company’s ability to track its online reputation, monitor customer reviews, and respond to online feedback. This can lead to missed opportunities to build brand loyalty, address customer concerns, and improve overall customer satisfaction.
In addition, the absence of a valid URL or business website can also make it difficult for the company’s marketing and sales teams to measure the effectiveness of their campaigns, track website traffic, and analyze conversion rates. This can lead to a lack of visibility into the company’s online performance, making it challenging to optimize marketing strategies and improve overall business outcomes.
The importance of collecting valid URLs or business websites from new users cannot be overstated. It’s a critical piece of data that provides valuable insights into the DNA of the business, enabling marketing and sales teams to offer personalized outreach, build trust with potential customers, and drive business growth. By prioritizing the collection of this data, companies can gain a competitive edge, improve their online presence, and ultimately drive business success.
Profile Enrichment and Segmentation
The first step in creating a comprehensive customer profile is to enrich the record by obtaining the company’s URL. This allows you to append the record with a vast array of useful signals and data points that provide valuable insights into the business’s current activities, trends, and characteristics. By doing so, you can answer crucial questions such as:
- Is the business currently hiring new employees, indicating potential staffing needs or expansion plans?
- Are they actively running advertising or marketing campaigns, suggesting a desire to increase brand awareness or drive sales?
- Are they a big content creator, frequently posting new blogs and videos, indicating a focus on thought leadership or customer engagement?
- Have they recently purchased a new tech platform, such as a payroll, e-commerce, or marketing automation software, suggesting a need for process improvements or scalability?
Once these insights are gathered and attached to a free trial user’s record, it enables a highly personalized marketing approach that speaks directly to their unique needs and pain points. Moreover, when your CRM records are enriched, you can begin to segment and prioritize your target audience more effectively.
Most companies create segments based on levels of user engagement, which can be a useful starting point. However, this approach may not take into account an SMB’s “outside the product” traits and characteristics, which are often just as important in determining their needs and preferences. The goal of 1:1 marketing is more achievable when your front-line teams have a 360-degree view of the target business, encompassing both their product usage and external factors that influence their behavior.
For instance, an in-depth understanding of the business industry or category can make a critical difference in crafting a targeted marketing strategy. If a trial user enters “consultant” as their business category, what does that tell you about their business and their current or future needs? There are hundreds of types of consultants, and there’s a significant difference between an IT consultant and a financial consultant’s practice. By narrowing down the business category, you can then layer in hundreds of growth indicators, including:
- Employee size: Are they a small, agile team or a larger organization with complex needs?
- Hiring trends: Are they experiencing rapid growth or downsizing, indicating potential staffing needs or restructuring?
- Data usage: Are they leveraging data analytics to inform business decisions or struggling to make sense of their data?
- Activity on social platforms: Are they actively engaging with their audience, sharing industry insights, or simply maintaining a presence?
- Industry-specific trends and challenges: Are they facing regulatory changes, market fluctuations, or technological disruptions that require specialized solutions?
By incorporating these external factors into your customer profile, you can develop a more nuanced understanding of your target audience’s needs, preferences, and pain points. This, in turn, enables you to create targeted marketing campaigns that resonate with your audience, drive engagement, and ultimately, drive conversions.
How to Leverage Your 360 View of a Business
Now that you have a comprehensive profile and deep understanding of your trial user, you can take your outreach efforts to the next level by engaging with them in a more personalized and targeted manner. However, it’s no secret that small businesses are bombarded with a staggering amount of inquiries every week, with estimates suggesting that they receive close to 100 snail mail, email, social, and telephone inquiries on a daily basis. Cutting through the noise and getting their attention is a significant challenge, making it essential to develop a strategy that stands out from the crowd.
One popular approach to creating a sense of urgency is to send a warning email to trial users, informing them that their free trial is soon to expire. While this tactic may seem effective, the reality is that these types of emails often yield limited conversion success. Many businesses find that their trial users are simply not motivated to take action, and the email is met with a lack of engagement.
So, what can you do to spark engagement and drive conversions? One effective approach is to leverage a business’s competitors. By highlighting the benefits and advantages of your solution over those of your competitors, you can create a sense of FOMO (fear of missing out) and encourage trial users to take action. This can be achieved through targeted email campaigns, social media ads, or even personalized phone calls.
For example, you could send an email to trial users highlighting the limitations of their current solution and how your solution can provide a more comprehensive and effective solution. You could also use social media ads to target trial users who have shown interest in your competitors’ products or services, and offer them a special promotion or discount to switch to your solution.
By leveraging your competitors in this way, you can create a sense of urgency and encourage trial users to take action. This can lead to a demo session, which in turn can lead to conversion. Additionally, by highlighting the benefits and advantages of your solution over those of your competitors, you can build trust and credibility with trial users, making them more likely to choose your solution over others.
While creating a sense of urgency is an important part of any outreach strategy, it’s not the only approach. By leveraging your competitors and highlighting the benefits and advantages of your solution, you can create a more effective and targeted outreach strategy that drives conversions and grows your business.
Competition
For small to medium-sized businesses (SMBs), understanding their competitors is a crucial aspect of staying ahead in the market. This includes gaining insight into their marketing strategies, strengths, and weaknesses, as well as their financial performance. By analyzing this data, SMBs can identify areas for improvement, capitalize on opportunities, and make informed decisions about their own marketing and business strategies.
One of the most effective ways to gather this information is by leveraging competition data. This data can be used to create a comprehensive picture of the competitive landscape, highlighting areas where a business is excelling and where they may be falling behind. By incorporating this data into a free trial account, businesses can then use it to personalize their outreach efforts and tailor their messaging to specific prospects.
However, it’s essential to approach this outreach in a way that resonates with the business owner. Simply sending an email or making a call with the intention of telling the business owner what’s wrong with their business is unlikely to yield the desired results. In fact, this approach can often come across as accusatory or critical, leading to defensiveness and a lack of engagement.
Instead, a more effective approach is to focus on providing value and insights that are relevant to the business owner’s interests. This can be achieved by sending an email or making a call that shows how their business ranks or compares with several similar businesses in their industry and locale. By highlighting areas where they may be lagging behind their competitors, you can pique their interest and encourage them to learn more.
To take it a step further, you can offer to provide a deeper dive into more competitors, offering a more comprehensive analysis of the competitive landscape. This can be a powerful way to demonstrate your expertise and provide value to the business owner, increasing the likelihood that they will engage with your outreach efforts and consider a demo or conversion.
By taking a data-driven approach to competition analysis and using it to personalize your outreach efforts, you can increase the effectiveness of your marketing and sales efforts, and ultimately drive more conversions and revenue for your business.
Reimagine the outreach call in this scenario:
“Thank you for using our product. I’d like to share some valuable information about your competitors. Better yet, is there a specific competitor that you’d like information about? I’d be more than happy to show that to you.” Now that you have their attention, you can demonstrate an understanding of their specific business landscape, educate them about the benefits of your product/service, and make a compelling, personalized pitch about how it could give them a competitive edge.
Better Data Leads to Higher Conversion Rates
Ask a SaaS marketer how to go about converting free trial users to paid subscribers and you’re sure to get a long list of preferred tactics, best practice email templates/call scripts, and lots of benchmarks. However, one foundational, undisputed piece of advice is that the more good data you can gather on your freemium/free users, the better you can conduct personalized outreach. And better outreach means higher conversion rates. The good news is that collecting the data for a 360 view of the business (the specific services it provides, budget, growth trajectory, etc.) is doable—and worth it. Over the course of the next few weeks, we’ll be sharing more examples and success stories. We welcome hearing your thoughts and learnings along the way.
Conclusion
Turning small business free trial users into paid subscribers is a crucial step in maximizing the revenue potential of your SaaS product. The article highlights several strategies to achieve this goal, including:
- Providing a seamless onboarding experience to ensure users get the most out of your product.
- Offering personalized support and training to address any questions or concerns users may have.
- Conducting regular check-ins and surveys to gauge user satisfaction and identify areas for improvement.
- Offering tiered pricing plans to cater to different user needs and budgets.
- Utilizing email marketing campaigns to nurture leads and encourage conversion.
- Leveraging user testimonials and case studies to build credibility and trust.
- Implementing a robust analytics system to track user behavior and identify opportunities for upselling.
By implementing these strategies, businesses can increase the likelihood of converting free trial users into paid subscribers, leading to increased revenue and customer retention. Remember, the key is to provide value to your users and demonstrate the ROI of your product, making it an essential part of their workflow. By doing so, you’ll be well on your way to building a loyal customer base and driving long-term growth for your business.
