Top 5 Ways to Increase Free Trial Conversions & Revenue

The first thing I think of when I see a headline about improving free trial conversions is “more money!” And I don’t think I’m alone.With roughly 75% of SaaS companies offering a free trial, it is no wonder the free trial has become the de facto industry standard.While conversion rates vary from B2B vs. B2C, SMB vs. Enterprise, etc., a study by SaaS industry research firm, Softletter, indicated that 66% of online companies surveyed had free-trial-to-paying-customer conversion rates of 25% or less.With that said, free-trial-to-paying-customer conversion rate is not the only metric to consider – but it is an extremely important one! Let’s look at two scenarios, assuming your average revenue per user is $100/month:40% Conversion Rate: You have 40 conversions out of 100 free trials. Your conversion rate is 40% (wow!) and revenue increases by $4,000/month.20% Conversion Rate (for the win): You have 60 conversion out of 300 free trials. Your conversion rate is 20% and revenue increases by $6,000/month (double wow!).Which would you rather have? Personally, I’d take the 20% conversion rate (over 40%) that provides an additional $2,000/month in revenue AND provides a larger pool of potential paying customers that could be nudged towards a purchase decision.The takeaway? The value of free trial conversions can sometimes be more important than the free trial conversion rate alone, and you should track and constantly strive to improve both metrics.

Source: Top 5 Ways to Increase Free Trial Conversions & Revenue

Advertisements

About Bob Warfield

Here's my bio: http://www.smoothspan.com/management.html
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s