Drive and Convert (Ep. 116): How to Convert Free Trial Users to Paying Customers
This week on Drive & Convert, Jon and Ryan discuss how to convert free trial users to paying customers.
Listen to this episode:
About This Episode:
This week on Drive & Convert, Jon and Ryan discuss how to convert free trial users to paying customers.
Check out the full episode to learn:
- The importance of optimizing the free trial experience for SaaS brands.
- How to gain an understanding of the factors that motivate your users to buy.
- Proven strategies to encourage your users to convert from free to paid.
The resource Jon mentions in the episode can be found on thegood.com here.
If you have questions, ideas, or feedback to share, connect with us on LinkedIn. We’re Jon Macdonald and Ryan Garrow.
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Episode Transcript:
[00:00:00] Announcer: You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon McDonald and Ryan Garrow.
[00:00:15] Ryan Garrow: All right, Jon, you have given me a topic that you want to talk about today. That is something we’ve not done a ton of on this podcast. We’re going to, we’re going to dabble in talking more in the SaaS side of the world than the[00:00:30] e-comm side of the world today. And, I mean it probably could be some e-comm stuff, I don’t know how it would work as well, but you get to give me some insight today on how to move a free trial customer to a paying customer.
[00:00:42] Ryan Garrow: Isn’t that, is that something, did I understand correctly?
[00:00:45] Jon MacDonald: Yes. Thank you for humoring me and letting me talk about this today. today. And I do think it applies to some degree to e-commerce brands as well, because there are brands who offer free trials or, and there are different methods of doing that in e [00:01:00] com.
[00:01:00] Jon MacDonald: The ones we’ll talk about today could, with a little bit of adjustment, be used for e-comm, but. The home for these is really in SaaS. That is where most free trials have started and been utilized over the years. And some e-comm folks have taken that and run with it since.
[00:01:18] Ryan Garrow: Yeah, I think a couple of things, like I don’t know as much about SaaS as I do e-comm.
[00:01:22] Ryan Garrow: And so I’m actually really interested in a lot of how these work, because as my brain will probably go right to how do I apply this to the [00:01:30] Thousands of e-comm customers we work with in looking at how they do trial subscriptions, how they do memberships for free that they can move into a premium price point.
[00:01:39] Ryan Garrow: So that’s how my brain’s going to be thinking through a lot of this and some of you out there maybe as well, but Jon does handle some of the largest. lead gen companies out there and helps with their conversion and optimization. So his brain is well tuned to success in this for sure.
[00:01:55] Jon MacDonald: I appreciate that.
[00:01:56] Jon MacDonald: It is all my team’s doing here at the good. So I [00:02:00] will say that I know what’s going on. I, there are way smarter folks here than me at this point, which is a good area to be in. But yeah, let’s talk a little bit about converting these free trial users into paying customers, because I think that it’s really important.
[00:02:15] Jon MacDonald: There’s no secret that free trials are the, where the most SaaS organizations mess up in my opinion, right? And this is because no one signs up for a free trial unless, they want to learn more about your product, but these free trials get pushed [00:02:30] off to the side a little bit. It’s a great lead gen tool for them, but not necessarily something they optimize.
[00:02:36] Jon MacDonald: We’ve had a lot of success doing that because we take a unique perspective on this. And that’s that most customers are signing up to, to learn how your product benefits them. They’re not looking to just get a free trial. They couldn’t care if you offer one feature or 50 features. They want, just want the product to solve their problems and make their life easier.
[00:02:57] Jon MacDonald: So that’s very similar to [00:03:00] Ecom and a very similar problem, right? Again, it’s only two reasons people are at your website, because they have a pain or need and they think you can solve it, and then they want to convert and accomplish that as quickly and easily as possible and get on with their lives. If you want to convert these free trial users, your task is to show them how your product meets their needs.
[00:03:20] Jon MacDonald: And that’s it. If you can’t help them achieve that desired outcome, it’s They’re just simply not going to buy, doesn’t matter how much of a trial or whether it’s free or not.
[00:03:29] Ryan Garrow: [00:03:30] Interesting. I like how that’s been put there around how you’re solving a problem rather than, it’s I feel like I get sold a lot of features on these.
[00:03:37] Ryan Garrow: So hopefully I can go back to these-commpanies and be like, no, go listen to this podcast with Jon cause he’ll solve all your problems and I’ll give you my money. Yeah.
[00:03:43] Jon MacDonald: SaaS, even in pricing with SaaS is a traditional thing. three up table pricing, and that’s a checklist of features under each table.
[00:03:50] Ryan Garrow: Further down it goes, the more value it has to me, supposedly. The
[00:03:53] Jon MacDonald: more features, not necessarily the benefits to the user all the time. It’s a good way to focus on that. [00:04:00] What’s the old adage in advertising that nobody’s buying the hammer? They’re buying the ability to basically nail something together, right?
[00:04:09] Jon MacDonald: That’s their goal. So it’s the same adage here with your SaaS products.
[00:04:14] Ryan Garrow: Okay. So as we dig into the data here that we do have to look at some of the normal metrics that I think of without thinking a little bit differently, like the conversion rate is not as a SaaS company necessarily focus on the how many people sign up for a free trial.
[00:04:27] Ryan Garrow: That’s nice, but the real important metric is. [00:04:30] How do they go from my free product to a paid product? And that is a slightly different conversion rate than what analytics tracks, for example.
[00:04:37] Jon MacDonald: Exactly. Now, if your marketing’s job is to get more people into a free trial, and that is considered a lead, then it is your job as a product owner, conversion person, to make sure that they convert from free to paid.
[00:04:51] Jon MacDonald: And so that is the conversion rate that matters, in my mind. It measures the percentage of users who transition from a free version of a product into a paid [00:05:00] version, right? And a lot, we’ll talk about different models, if you don’t convert this, it can cost your company a lot of money and not just in customer acquisition costs.
[00:05:09] Jon MacDonald: It can cost you a ton of money in server fees and everything else to service those folks. Think about All of these AI apps that are out there right now, they’re not, they didn’t build their own AI. They’re using open AI or chat GPT’s API calls, right? And those add up so quickly. And so [00:05:30] you really need to be conscious of giving people too much free runway.
[00:05:34] Jon MacDonald: without focusing on converting them. So if you want users to upgrade to these paid tiers, there’s really an important metric to track. And it’s also important for these freemium models where users can access some of these features for free and are encouraged to pay for more premium features. And we’ll get into those models, but there’s a formula that I think we need to start with just to level set.
[00:05:57] Jon MacDonald: And this is a free to paid conversion. conversion [00:06:00] rate. That is the number of users who convert to paid divided by the total number of free users times 100. Okay, so total number of users who convert to paid divided by the total number of those free users times 100. So not too dissimilar from a conversion rate.
[00:06:18] Jon MacDonald: But okay, let’s do an example. So let’s say a SaaS company has 10, 000 free users, 500 of them upgrade to a paid version. The free to paid conversion rate would be [00:06:30] 500 divided by 10, 000 times 100%. And that gives you 5%. Okay.
[00:06:35] Ryan Garrow: So it’s interesting how you could turn off lead gen marketing and not get any new leads, but you could still be working on increasing your conversion rate, even without that new traffic, cause your free users are still 10, 000.
[00:06:47] Ryan Garrow: And then you just pick, a timeline to figure out your conversion rate. Oh, we had 200 this week convert, so our conversion rate this week was 2%.
[00:06:55] Jon MacDonald: Exactly. And it’s interesting because so many SaaS brands [00:07:00] focus on getting more people into that funnel when really what they need to do is focus on converting the folks that are in that free trial already.
[00:07:07] Jon MacDonald: And a lot of them offer, free trials that last a very long time six weeks, a month. Three months, whatever it might be. The challenge with that is you’re now extending that window, right? So as you can imagine, you’re going to really want to push that number as high as possible as more conversions to paid account.
[00:07:26] Jon MacDonald: That’s when you get your revenue. Want to focus on the revenue and then the profit, [00:07:30] that is where you need to look.
[00:07:31] Ryan Garrow: Yeah, I can see how a marketing team would like a really long free trial to be like, Oh no, we don’t need to change that. Just keeping the free trial. So we have a chance to sell them moving forward because I would be worried about, losing the opportunity when in reality, it’s probably not likely that person is going to convert if they’ve been a free user for so long.
[00:07:49] Jon MacDonald: Let’s talk about how to convert these free users before we do that, because I really want to level set on a couple of things. One of them I want to talk about is what I mean by a free trial. Okay. [00:08:00] And let’s come back to that point though, because I really want to talk about why that’s a misnomer for these marketing teams.
[00:08:07] Jon MacDonald: So there’s actually three different types or models around free trials. And there’s a whole bunch of tactics under each of these, but there’s three main groups and that is the freemium model, which most of us know about, right? There’s the reverse trial, which is probably new to a lot of folks. And then there’s a trial with payment, which once I tell you what it is [00:08:30] you’ll know what it is already.
[00:08:31] Jon MacDonald: But a freemium model is a two tiered model with a free tier and a premium plan. Pretty simple, right? This is the traditional SaaS model. We’ll grant you free perpetual access to a restricted version of our product, hoping that by limiting the accessible features, maybe giving you four out of six or something of that sort, and.
[00:08:53] Jon MacDonald: Placing caps on the features. Maybe you only get X number of downloads a month. This is the [00:09:00] hope that you will upgrade to a paid version to access all the full features that you’re going to hit that wall with usage. And you’re going to say, you know what I want to level up. I’m going to pay.
[00:09:08] Jon MacDonald: You can also think about this in some cases, freemium users can. get charged in a la carte for usage, meaning that you could say if you, maybe it’s the platform’s free, but every time you download it to dollar, right? Something of that sort, right? So there’s a couple of ways you could do freemium here, but this is what everybody knows.
[00:09:26] Jon MacDonald: Oh, I’m going to get your platform. You’re going to let me do a [00:09:30] limited subset of items. When I need more, I’m going to have to pay make sense. I’m paying for my usage, but this is where marketing teams can really mess up because they’re trying to get everybody into a free model. And the expectation is it’s going to perpetually be free.
[00:09:44] Jon MacDonald: That costs the -commpany a lot of money in the end, right? To service those folks. Just think about all the support alone when somebody has a challenge and they’re not paying. The second model is a reverse trial. This is one that I mentioned might be new to some folks. It’s a time based [00:10:00] approach and this was actually coined at Dropbox.
[00:10:02] Jon MacDonald: And users start with a full access to the features for a limited time during a trial phase. Okay. Why is this a reverse? They get moved to a freemium plan with limited product features after that time is up. So for a limited time, they’re getting the product’s maximum value at the beginning of that trial experience.
[00:10:21] Jon MacDonald: And if they want to regain access to those full features, at that point, they’re going to need to. Okay. purchase a paid plan.
[00:10:27] Jon MacDonald: So I like that one.
[00:10:28] Jon MacDonald: Yeah. If you think about it, this [00:10:30] works really well at products like Dropbox because once you have all your files uploaded to the Dropbox and you want to access those later, you got to start paying.
[00:10:37] Jon MacDonald: It works really well when you have that hook, that mechanism that hooks people in and they’re not going to want to give up that access later. The third is trial with payment. Now in a trial with payment, users are required to provide their payment information upfront. You’ll see on SaaSs a lot of times, or even e-commmerce subscription products that say no credit card required.
[00:10:58] Jon MacDonald: That’s because a lot of people [00:11:00] have grown tired of trial with payment, meaning I’m going to give you my credit card. You’re going to give me 30 days or whatever limited period of time, free access. And that trial is free until specified date until agreed upon date, at which point you’re going to charge me a recurring subscription for that full suite of products.
[00:11:19] Jon MacDonald: So you’re basically. I’m giving you the authorization to charge me in the future unless I cancel beforehand. Now the number one problem with this is that brands make [00:11:30] a ton of money on this by people who forget to unsubscribe, right? We’ve talked about this before. I’m guilty
[00:11:36] Ryan Garrow: of not unsubscribing and then being mad at myself.
[00:11:39] Jon MacDonald: And this is such a epidemic that there’s TV commercials for services that do nothing but look through all your transactions and alert you to what you have for recurring charges and then let you push a button to cancel that service. So it’s really interesting that this has become so frowned upon and it’s become such a [00:12:00] problem that people are willing to spend hundreds of millions of dollars to advertise.
[00:12:04] Jon MacDonald: To get you to use their product just to solve this problem. So it obviously works. It gets people to convert, but it also creates a down, downward effect.
[00:12:14] Ryan Garrow: Yeah. So I know which one I don’t like the best because I fall in prey to it. Is there one of these that you think works better than the other two?
[00:12:22] Jon MacDonald: Yeah, I think it really depends on the product itself.
[00:12:26] Jon MacDonald: Okay. So like that reverse trial I mentioned. You have to have a [00:12:30] product like Dropbox where you’re providing a lot of value that creates lock in, right? If you don’t have that lock in, at that point, you’re really gonna, just, everyone’s gonna flee you when that reverse trial happens, okay? The freemium model, great, but you better have a really good product that people are like, yeah, this is free and I want I need more access.
[00:12:50] Jon MacDonald: It’s impeding my workability or my personal life, whatever it might be.
[00:12:54] Ryan Garrow: Yeah. And you’ve probably got to have a good enough product to get me like, so I get some value out of that, [00:13:00] but then I can, Whoa, I can see how my life gets so much better with this. That’s probably not an easy one to pull off.
[00:13:08] Jon MacDonald: It’s not, unfortunately, because. First of all, there’s always the consumers who are going to try to hack their way around it, right? I know people who use Dropbox and always are downloading their files and only uploading what they have to the maximum space just so they can share files with people.
[00:13:25] Jon MacDonald: So they’ll go in and they’ll upload whatever they need and then store it there and then when [00:13:30] they’re, done, they’ll download it and delete it off of Dropbox so they keep that space. It’s a pain in the butt for those users, but they don’t want to pay. So they’re willing to stick within that limited time frame, right?
[00:13:41] Jon MacDonald: There’s people who go out and just create another account and get a whole nother free trial or whatever it may be, right? So you, there’s a lot of ways that consumers will try to hack this and you need to understand what is the model that is going to provide so much value for your consumers that they won’t try to [00:14:00] hack it, that they’ll just pay because it’s easier to do that and keep all their, data together, their preferences, whatever it might be.
[00:14:06] Jon MacDonald: And they’ll also say, Hey, you know what? You’re giving me so much value that yeah, I’ll pay for more access. Like it’s worth it.
[00:14:13] Announcer: You’re listening to Drive and Convert, a podcast focused on e-commmerce growth. Your hosts are Jon McDonald, founder of The Good, a conversion rate optimization agency that works with e-commmerce brands to help convert more of their visitors into buyers and Ryan Garrow of Logical Position, [00:14:30] a digital marketing agency offering pay per click management search engines optimization and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.
[00:14:47] Ryan Garrow: Because certain things I am a hundred percent guilty of. Like new emails. Like I’ve done a lot of that personal hacking in business.
[00:14:55] Ryan Garrow: And so sorry for all the SaaS companies out there that you’ve got a lot of my [00:15:00] accounts in there, but for some of them, there was probably a price point that I would have assigned that value. And it was probably to me. Yes. Okay, fine. It is worth five bucks a month for me. And I don’t have to go through the hassle of.
[00:15:11] Ryan Garrow: Creating a new account, but maybe they wanted 30 bucks and I’m like that for me was a threshold that it’s better off for me to hack around it.
[00:15:19] Jon MacDonald: Yeah pricing is a whole nother game, right? For sure. And there are commpanies that do nothing but focus on SaaS pricing. It’s that complicated of a challenge.
[00:15:29] Ryan Garrow: [00:15:30] Got it. Because I assume it’s sliding scales like, okay you could go to 5 to get Ryan, but then you’re actually making, two pennies per user and nobody wants to SaaSs with 0. 1 percent margin,
[00:15:40] Jon MacDonald: right? Otherwise you might as well be in the agency business, right? Yeah.
[00:15:44] Ryan Garrow: Come work with us.
[00:15:45] Ryan Garrow: It’s great.
[00:15:46] Jon MacDonald: The reality on this too is. You have to understand that in SaaS, the less support, the less people or accounts you have to support, the better, because that is going to be a big portion of your margin, [00:16:00] is people talking to people about their problems, right? If you have someone who converts at 5, You could also charge 25, then you don’t want to deal with the extra four people, right?
[00:16:13] Jon MacDonald: Five times five is 25. So it’d be five users at 5 or one user at 25. If I’m thinking about it, the margin is going to look a lot better at that 25 probably not even because I’m getting 20 extra dollars a month out of that user has more to do with the fact that. that I’m not [00:16:30] servicing five people.
[00:16:31] Jon MacDonald: Now I don’t have to worry about five accounts. I have to worry about one, and that’s really where I think a lot of the margins will end up.
[00:16:37] Ryan Garrow: Yeah, that’s, I love that. A great example of that is to help make it clear for me. But what we’re talking about really is not pricing. Cause that’s a different conversation.
[00:16:44] Ryan Garrow: We want to know how do we actually move these people from free to paid because that’s not a simple process. Because people like me make it difficult.
[00:16:53] Jon MacDonald: Cheaters like, like us, right? Converting free trial users to paid users is really, goes back to just [00:17:00] demonstrating your product’s value, right?
[00:17:02] Jon MacDonald: This is what I was saying up front where, how is it benefiting your consumers that sign up for an account, not what the features are, right? So you can do this by strategically placing messaging throughout your site and or your app. But keep in mind that your free trial signups already know the product is good.
[00:17:20] Jon MacDonald: What I mean by that is. You got them to sign up in the first place. So there’s some hope of benefit there for them, right? Cause getting them to sign up, whether it’s a free trial or not still can be a [00:17:30] pain in the butt. It still takes some effort. Okay. No matter how one login you use, or if I can log in with my Google account, whatever it is that, yeah, that kind of makes it easier, but it’s not perfect.
[00:17:41] Jon MacDonald: No, no sign up is so your job is to convince them that the value they’re going to get from the product is worth the price. And there’s several ways to do this, right? So you can highlight benefits. Pretty simple, right? We’ve talked a lot about benefits. You offer social proof. You give benefits. Product tours, right?
[00:17:59] Jon MacDonald: What are [00:18:00] all the functionality and features you’re missing? I actually just onboarded for a tool that gave me a seven day free trial. But if I went to their weekly product onboarding webinar that they do, it was a live webinar, and if I got on there. registered and attended, they would double it to two weeks.
[00:18:18] Jon MacDonald: And they did that because they were confident that if I figured out how to use the product effectively within that two weeks, I would subscribe. And so I was really interested in [00:18:30] this and I started chatting in the chat during the webinar, like I didn’t know who else was on this webinar.
[00:18:35] Jon MacDonald: It turns out there were dozens of people on there, which was awesome. So the offer. Of extending the trial obviously works, but the information was great. But I also started asking them like, how’s this work for you? Does this convert? I’m really intrigued by this model. I haven’t seen someone do this before.
[00:18:51] Jon MacDonald: How’d you get this idea? And they were very cool and answered my questions. But at some point during the webinar, they’re like, look, Hey, Jon, we see your questions. That’s [00:19:00] awesome. Hit me up on LinkedIn. I want to chat about this. It sounds a lot about what we’re trying to do here, but that’s not what we’re doing.
[00:19:05] Jon MacDonald: We’re here to talk about the onboarding.
[00:19:10] Jon MacDonald: But I was also, this is how I nerd out and I thought it was interesting. So give those product tours maybe with some incentive and boost your users engagement, right? So they were doing both of those with that example. I don’t think you can invite this kind of thinking unless you know your customers right?
[00:19:26] Jon MacDonald: Once you know what triggers them to buy, then you can build [00:19:30] your user experience around that. that will convince them to convert. So you can’t just put banners up everywhere that says you’re in free trial. Click here to convert. You have to understand where the value is and then add that notification where the value might be missing for them.
[00:19:44] Jon MacDonald: But if they paid, they would get that, unlock that extra value.
[00:19:47] Ryan Garrow: Got it. Okay. And so what are some of the strategies you leverage them when you’re trying to move these people through? Because you’ve. You’ve got to have, areas in that you can test and measure, I assume, because it’s Jon McDonald.
[00:19:59] Ryan Garrow: You’ve [00:20:00] done this.
[00:20:00] Jon MacDonald: Always down to test it, right? We actually have this really great resource up on thegood. com. So if you go to thegood. com, click on insights. There’s a search box there. It’s the encyclopedia of our content from 15, almost 16 years. Search for free trial in that box. It’s right up there.
[00:20:18] Jon MacDonald: And the article and resource will come up. It’s got, I think, nine or so specific detailed strategies with examples that you can use. If you really want to dive in, we’ll cover a couple of those [00:20:30] today, but that resource article is way too long to talk about all nine of these on a podcast. So, I’ll highlight a couple of them.
[00:20:38] Jon MacDonald: But I highly recommend checking out that full list. Now you should use some, or you could use these in conjunction with each other, right? So you don’t have to just stick to one of these options. These are just ideas that there are several different ones and you can test and combine them and experiment really to find the ones that are going to produce the best results for your brand.
[00:20:58] Jon MacDonald: Okay. So I [00:21:00] talked a lot a minute ago about putting up notifications. You really need to remind your users to upgrade early and often, right? Don’t make the mistake of waiting until the end of the free trial to prompt users to upgrade. I can’t stand anything more than I go to log into an app, and I had no idea that the free trial was going to be up soon.
[00:21:21] Jon MacDonald: They didn’t send emails. They didn’t tell me in the app. I go to log in, and it’s Oh, your free trial is over. And I was ready, primed, trying to get work done [00:21:30] aside on my calendar. It was just a really frustrating experience. So don’t make that mistake, right? Prompt your users to upgrade from the beginning of their experience and remind them that they aren’t getting that full feature.
[00:21:42] Jon MacDonald: You can do CTAs. You can do this in app notifications, tooltips. pop up overlays, onboarding videos, support messages, right? So if they’re looking for support, you can, in the reply to that, you could mention the upgrade and just the general email marketing flows. So you have a lot of options for [00:22:00] where you can do this, but don’t wait till the end to do that.
[00:22:03] Jon MacDonald: That’s where you end up with problems.
[00:22:04] Ryan Garrow: And I, and if I’m in a free trial, I get it. You’re going to try to convert me. So I’m not going to be mad that you’re messaging me like you can do it too often. I assume just like most things, but you probably also have to assume that not all of your emails are hitting my inbox or I automatically put them in clutter or something like that.
[00:22:22] Ryan Garrow: So test and measure likely those different calls to action and different areas to hit me
[00:22:26] Jon MacDonald: for sure. And this is the next one, which is. It’s to present [00:22:30] gated features near free features, okay? So what I’m saying here is strategically place these prompts or highlight these premium features adjacent to free ones.
[00:22:40] Jon MacDonald: So you create this opportunity for those free trial users to envision how the paid ones We’ll enhance their experience, right? So this also has serves the benefit of consistently reminding what they’re missing. It sparks that curiosity and it demonstrates the tangible benefits of upgrading. So in the same vein that you were just talking about, I’m not going to [00:23:00] be upset that you’re reminding me I’m on the free level.
[00:23:03] Jon MacDonald: I’m also not going to be upset that you’re reminding me that there’s potentially a better world over here. If I pay, I can get access to, I know I’m not paying. Thank you. I know that I’m on the free trial, so it’s okay to remind them of what they need to do there. The next one is to offer great onboarding experience.
[00:23:20] Jon MacDonald: I gave that example a minute ago, but the onboarding process is really, it’s that first impression that they’re going to have of your product or service. And [00:23:30] a positive experience here is significantly going to influence the decision to upgrade. We have for SaaS brands, we’ve worked sometimes on nothing but that onboarding experience.
[00:23:39] Jon MacDonald: And there are actually companies out there that focus exclusively on onboarding experiences. It is that important. If you. Go in and you’re going to provide this clear, concise step-by-step guide. You can use things like tool tips, interactive tutorial, walkthroughs to highlight these key features and even demonstrations [00:24:00] on how to use everything effectively.
[00:24:01] Jon MacDonald: There is a tool out there, a sales tool, it’s called Clay, C L A Y. That’s a sales automation tool. That’s really taken off right now. They are the masters at this. They have done nothing but. On LinkedIn, they have people who are just creating one to two minute videos of how to use specific functionality that is really interesting.
[00:24:22] Jon MacDonald: And you start getting, planting that seed of, Oh, wow, you mean I can create this flow to do this specific task? [00:24:30] Specific action. That’s really cool. I bet I could combine that with these other ideas I’m now having or man, I saw this other video last week that can combine with what I’ve seen right now. So that type of onboarding and awareness can go a really long way to converting people.
[00:24:46] Jon MacDonald: This last one is to use paywalls to demonstrate these paid features. Now, we all hate paywalls. I get it. Everybody hates a paywall. Nobody wants to be hit with a paywall. It’s called a wall for a reason. Now, the value that it demonstrates, [00:25:00] though, is that it entices users to upgrade to unlock the full access because they were trying to do something that they wanted to do.
[00:25:07] Jon MacDonald: It’s a great time to tell them, you don’t have access for this, but you just pay and you get access. And if you design it really thoughtfully, they can drive conversions without causing a lot of frustration. Now, we did this, we’ve done at the good. We’ve overhauled paywalls for The Economist, for The Telegraph, and a few other publications.
[00:25:26] Jon MacDonald: And that’s been really great because [00:25:30] everybody hates hitting the paywalls. And they try to go use other browsers, incognito mode, whatever, just to continue their experience. So how can you make it really easy for them and what does that look like? Now, each paywall should clearly articulate the benefits of upgrading to a paid version.
[00:25:48] Jon MacDonald: Okay? We really want to persuade people through that messaging, highlight the key value propositions and make sure they know what they’re going to get. Now, one of the coolest paywalls I’ve ever seen that worked extremely well [00:26:00] was I hit the paywall and then it said, you know what? We will give you access, if you just give us your email address, we’ll continue to give you access to two additional articles a day.
[00:26:12] Jon MacDonald: So I got the three free that everybody gets, but if I would get up to five, if I just gave them my email address now. That felt like a great exchange of value because they now know who I am. And what that meant was every once in a while I was getting a reminder that was tailored for me, [00:26:30] right? Because it had, they knew they were able to track what I read, what I liked, and they were able to then, Taylor, the messaging, Hey, you would like more of this type of content or, Hey, this article is coming out, or did you miss this article, et cetera, to try to show me how much value, but personalize that, right?
[00:26:48] Jon MacDonald: So there are a lot of ways to handle this. And. Those were just four pretty simple paywall or excuse me, conversion strategies that were the paywall, the great onboarding experience [00:27:00] present gated features next to the free ones. And then just remind people early and often there’s five more, at least up on the good.
[00:27:07] Jon MacDonald: com if you wanted to get more of those.
[00:27:09] Ryan Garrow: Dang, SaaS can get complicated. And trying to get people to part with their money. E-comm seems simpler many times.
[00:27:16] Jon MacDonald: I was going to say we all thought e-comm was difficult, but the SaaS world is, can go really deep. And so it’s part of why I love it. I
[00:27:24] Ryan Garrow: imagine it’s likely difficult to move your Strategy around [00:27:30] from, free trial to, doing the reverse trial to doing the trial with payment.
[00:27:35] Ryan Garrow: Like it doesn’t feel like that’s going to be an easy thing to move around. So you probably have to be very intentional and test small early on. Before you go
[00:27:44] Jon MacDonald: big, once you have the wins behind a solution, it can be hard to change that because all your marketing is going to be done on it. You’re the way you’ve built your product marketing and product management teams are all going to be geared up for those specific methods.
[00:27:58] Jon MacDonald: Without question, yeah, you [00:28:00] really want to make sure you have this settled in, and then you can tweak it from there, but you probably don’t want to change the entire methodology that often.
[00:28:08] Ryan Garrow: Jon, I appreciate the education today. Now I’ve got to go re listen to this a few times, probably try to figure out how I can apply this to some of these things I’m thinking about in Ecom.
[00:28:18] Jon MacDonald: Yeah maybe that’d make a great episode sometime we can how to convert free. Free to pay trial and how that works for e-Comm as well.
[00:28:25] Ryan Garrow: Yeah, I’m definitely gonna come up with some stuff to test and measure. For sure. Love it. So [00:28:30] thanks for the time.
[00:28:30] Jon MacDonald: Alright, thank you Ryan.
[00:28:38] Announcer: Thanks for listening to Drive and Convert with Jon McDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at drive and convert com.
About the Author
Jon MacDonald
Jon MacDonald is founder and President of The Good, a digital experience optimization firm that has achieved results for some of the largest companies including Adobe, Nike, Xerox, Verizon, Intel and more. Jon regularly contributes to publications like Entrepreneur and Inc.