Your business is under daily assault: shifting market priorities, search engine fickleness, and competitors both new and old.  In these trying times, many reach for the familiar and comforting techniques of spicing up their SEO, playing around with pricing, or adding a new feature or two.  But you don't have to settle for the merely familiar.  If you've been holding out for a hero, don't worry - they're already here.

Say hello to Trial-to-Paid Conversion.

What is Trial-to-Paid Conversion?

There are a lot of numbers that are important to your business.  Dave McClure popularized Pirate Metrics in 2007 as a way to simplify the complex list of business metrics a startup business owner was expected to know, but I think there's a much simpler way to talk about it.

Imagine a funnel divided into two sections.  Above the funnel are Visitors, people who have visited your website and browsed, but not signed up for anything.  The top half of the funnel is Trials, people who have signed up for a trial of your product.  The bottom half of the funnel is Paid Customers, trial users who have started paying you money to continue to use your service.  Finally, underneath the funnel is Churn, paid users who have decided to stop paying you money.

This ignores a whole lot of potential half-steps, like people who have signed up for your mailing list, people who have spoken with you via live-chat, people you met at a trade show, and so on, but for good reason - while these things can boost your numbers, they're not on the critical path.  If you don't have anyone trialing your service, nobody will ever pay for it, and if nobody ever pays for your service, well, you've got bigger problems than metrics.

So while these large buckets are useful, what's even more useful is the boundaries between the buckets, the Visitor-to-Trial boundary, the Trial-to-Paid boundary, and the Paid-to-Churn boundary.  While you want to pay attention to all your buckets and all your boundaries -- for example if your Visitor-to-Trial rate is hovering around 0, maybe take a look at that, but for the purposes of this post, we're going to focus on what I consider to be the most powerful boundary: the Trial-to-Paid Conversion boundary.

Why is Trial-to-Paid Conversion so powerful?

I wasn't kidding when I compared Trial-to-Paid Conversion to a superhero.  I mean, sure, it's a literary device, and maybe I was being a bit hyperbolic for effect, but it really is a very powerful thing to focus on if you want to make a successful SAAS business.

Why is it so powerful?  Well, let's examine its various superhero abilities:

Invulnerability To Algorithms

One very popular activity for marketers to spend time and money on is improving SEO.  The logic is: more Visitors = more Trials = more Paid Customers = more money = more problems.  Wait, that last bit is from a song.  Ignore that.


For the most part, these marketers are correct!  The logic does hold out.  Except when it doesn't.  And one of those times where it doesn't is when Google does one of its famous algorithm shifts.  Suddenly, sites that ranked highly yesterday don't rank so highly today.  That copy that worked so brilliantly now has to be tweaked and shifted around, new backlinks have to be cultivated, old backlinks have to be culled, it's madness!

Trial-to-Paid conversion is invulnerable to such algorithm changes.  By the time your users become Trial users, they're past the danger zone where algorithm changes can harm them - they're in your system, trialing your service, and you have their email and potentially even their phone number to get ahold of them to move them along.

A 10% improvement in Trial-to-Paid conversion remains a 10% improvement, no matter what Google does.  Sure, you'll need to pump up those visitor numbers in the meantime, but at least you'll be making the most of the traffic you have.

Super-Strong Math

Increasing the number of visitors to your site definitely has some value, but it can be hard to quantify.  If those visitors are unqualified - i.e. they come from an unrelated referring site or are "just browsing" and aren't looking to buy when they land on your site - they're worth much much less to you.  How much less?  Who knows?  Depending on the sources, they could be worth absolutely nothing at all.

Increasing your trials is similarly subject to unpredictable variation.  If you offer more free time or free features in your trial, trials are likely to shoot up, but will any of those users ever end up paying you money when they've gotten what they need for free?  Another popular tactic for boosting trial signups is to reduce the friction required to create an account, removing the requirement for a credit card, customer information, or even a password!  But now you've got a flood of unqualified users trialing your software, consuming your resources, and you you lack any useful customer information to attempt to intelligently convert them.  What good are a hundred trials that nobody converts from?

Thankfully, the value offered by improved Trial-to-Paid Conversion is very easy to calculate:

LTV * Average Improvement in Converted Users = Value

Simple!  If you know the LifeTime Value of a customer (divide the average net monthly revenue by your churn rate, or multiply your average net monthly revenue by the average number of months a customer stays subscribed, whichever is easier for you to calculate), and you can track the improvement in Trial-to-Paid Conversion, you can identify what it's worth to you to make that improvement!

For example, let's say you have an average net revenue of $45 across your customers, and your churn is 4%.  This makes the Lifetime Value of a customer $1125.  You spend some time working on your Trial-to-Paid Conversion, and go from an average of 10 conversions a month to 12 conversions.  This means you're now making an extra $2250/month than before, even if at first glance it's "just" a 20% increase.

In fact, it might even be higher than that, due to the final superhero ability!

That Signature Superhero Charm

Remember how we said that the Lifetime Value of a customer is partially based on the churn, or chance that customers will cancel?  Focusing on Trial-to-Paid Conversion can even help reduce churn, making every customer more valuable.  How do we accomplish that?  Just turn on that ol' superhero charm.

Superman, Wonder Woman, Iron Man, Spider-Man - they're all really charming.  If Peter Parker swings down on a web to save you from a mugging, not only do you get to keep your valuables, you also get to witness a master charmer at work.  You'll be able to gather a crowd around the water cooler at work just to repeat the witty banter he exchanged with both you and the thugs as he strung them up and returned your money.  You're not just a consumer of Spider-Man's rescue services, you're also a fan.

Increasing your Trial-to-Paid Conversion isn't something you do with tricks or traps.  Yes, there are useful techniques and tactics you can make use of, but at a very basic level, you improve this number by making sure that people love your service.  That's it, that's the most-basic technique there is.  Make people love your service, and they will happily pay you money and keep paying you money for a long, long time.

So, is there, like, a Bat-Signal or something?

Okay, yes, the superhero analogy is wearing a little thin by now, but if you've read this far, you're probably wondering "how do I summon this wonderful hero?" or if it's been a really long day, maybe more "how do I improve my Trial-to-Paid Conversion already?"  Fair.

Like I said, it mainly boils down to making sure your potential customers love you and the service you can provide them.  But some customers are resistant to change, as well you probably know.  Some will have trouble figuring out your service, or once they do, seeing the value in it.  And some will steadfastly refuse to even try it out at all.  They'll sign up and disappear, like Batman when your back is turned. (Okay, no, I'm not done with the superhero thing yet, sue me.)

So knowing that some of your customers are going to have a hard time seeing the value of your service due to their faults, your faults, or some combination of both, how do you increase the number of people who manage to make it through the gauntlet and really learn to love your service?  Well, I find it helps to have a framework to work from, and I'd like to share mine with you.

The Five Pillars of Improved Trial-to-Paid Conversion

While there are an incredible number of things you can do to improve your Trial-to-Paid Conversion, there are five major categories that I like to focus on - five Big Important Ideas you'll want to really get right, and looking at it through this lens makes it a lot easier to identify and categorize all the smaller things you'll want to think about on the way.

First Pillar: Set Expectations

This is half about qualifying your leads properly, and half about respecting those leads and their time.  If your trial will only take fifteen minutes to show serious value to potential customers, say so!  If your trial will take some work to set up and hours or days to show value, well, say so anyway!

If your trial will take some time to set up and evaluate, letting people know in advance will allow them to schedule time to evaluate you properly, instead of getting halfway in the door and discovering that they have to add a tracking script, add detailed company information, or other such time-intensive tasks.  A distinct percentage of those people will leave, never to return.  If, once you've but together an estimate of the amount of time the trial will take, you balk at revealing this information to your potential customer, that can be a good thing!  Maybe your trial takes too long to get to anything of value.  But more on that in the next pillar.

It's important to consider the impression your UI and design leaves the user with, as well.  Using an appropriate visual style for your service/target market, keeping that style consistent, and smoothing down all the little "rough edges" makes sure that your first impression is a good one, and that your users expect the rest of the service to follow suit.

Before we move on, it's important to continue to keep "setting expectations" in mind once the trial has started.  If you want to ask the user for extra app or browser permissions, send extra emails, or provide extra qualifying information, explain why first.  People are much more likely to enable notifications if they know why and approve of your reasoning.

Second Pillar: Sprint to Value

Every action, every click, every decision point is an opportunity for potential customers to reconsider how they choose to spend their time and decide to go do something else.  Once they've entered your trial process, it is literally a race against time and modern humankind's rapidly-decreasing attention span.  So don't mess around and waste your or your potential customer's time with extraneous activities. Sprint to value!

There's a number of things you can do to cut down on the steps required for your customers to see value:

  • Provide templates to work from instead of requiring users start from scratch.
  • Pre-populate with sample data that can demonstrate what a fully-armed and operational battle station setup can do for them.
  • Organize onboarding so that easier and quicker tasks are first, to provide a sense of progress and make completing later steps feel easier.
  • Or take more obvious advantage of the Endowed Progress Effect by providing a progress bar that already has one or two steps checked off.

It's key to keep in mind the word "value."  It may take longer than one session to get to your customer's first "success" (waiting for replies to a form, payments on an invoice, a delivery), but so long as they can envision the potential of your service and see the value they'll derive, you've made your case.

Third Pillar: Track, Segment, & Personalize

Some potential customers won't convert right away.  Heck, some won't convert ever.  It happens, and while it's not the end of the world, it's not helping anybody if you don't know why.  And tracking simple page views just won't do.  For one, SPAs are all the rage these days, so tracking page-by-page has less meaning than ever before.  But primarily, a whole bunch of pertinent events can happen on a single "page", and it's important that you know what they are.

Obviously, it's possible to go overboard here, and you definitely don't want to end up in creepy/obsessive/there's-no-way-you-actually-need-that territory, so maybe skip out on trying to upload your potential customer's contact list, full location history, and other unrelated stuff to your servers.  Instead, focus on the important business events that happen, and track those.

Next, take that tracked data, and segment your users into, well, segments.  Try to identify common behaviours and patterns that you can use to change your messaging to something more useful.  For example, you could create segments for low-engagement and high-engagement users.  Low-engagement users could be sent email focusing on the core value of your service, attempting to draw them back in to experience it.  High-engagement users could be sent email highlighting advanced features, showcasing the breadth of your service and working to secure the sale.

Finally, a really killer use for that tracked data is to personalize the messaging you send to your trial users.  What better way to show value for your online form service than to add the number of responses to your forms to the top of your emails?  Don't just tell them about the cool things you can do for them, show them the cool things you've already done.

Fourth Pillar: Challenge & Educate

You've done your best to sprint to value, showing as much potential as quickly as possible.  But that's hardly all that needs to be done.  There's a reason the sales process is called the "sales process" and not the "sales instant".

Either through automated emails or potentially a more hands-on approach, if you're early-stage or targeting Enterprise-y customers, now's the time to play the long game and fill in all the holes in your trial customers' knowledge and assumptions.

In point of fact, you want to challenge those assumptions.  Odds are, you know a thing or two about this space (hey, you did build a whole service targeting the niche).  This is your opportunity to tell your unique story, why your approach is the right one, and how it is going to make them into even bigger winners than they already are. Or if their entire industry is changing underneath them and you're the one company with the right service at the right price to save them?  Well, say so! Do you think they'd prefer to stay ignorant and left in the dust?  You wouldn't, so share.

You've tracked your potential customer's usage and segmented them, right?  So now's the time to send some personalized emails, educating them about not just how to use your service, but more importantly why to use your service, and how it will turn them into massive successes.

Don't lose sight of the classic "sell benefits, not features" just because you got them past the landing page.

Fifth Pillar: Persist

Okay, let's be clear: if someone tells you they're not interested, respect that.  Don't be that pushy person who won't take a hint.  But you also don't want to be that blushing wallflower who never reaches out.  Just because someone doesn't convert immediately doesn't mean they never will.

In point of fact, a surprising number of your conversions will come well after a trial expires - sometimes even months later!  Some people will evaluate your service against a potential future need and only come back later when that need surfaces, or simply be in a different position later and require your services.  Or maybe they didn't convert because you didn't fulfil a need they had, and a later improvement like an added feature or service changes that.

It's important to keep in contact with your trial users.  If you can convince them to sign up for your newsletter, great - this is a wonderful opportunity to keep that contact warm and make sure they have every opportunity to learn about new features or additions that could help convert.  If not, it doesn't hurt to send an email every once in a while to check in.  (Though it's important to understand the limits of that contact in your jurisdiction - a good rule of thumb is the CASL Law, which - without explicit consent - limits you to 24 months in which you can contact users after they sign up for your trial.  If you can't convert in 24 months, baby, they're gone.)

Speaking of Newsletters

Oh come on, you had to know this was coming.

I'm going to be going into a lot more depth on this topic on this site, so why not sign up for my newsletter and make sure you catch 'em all?  I also try to keep up on bootstrapper/entrepreneur/technology business news and share stories that catch my eye - anything that can help SAAS business owners kick it up a notch.

As a free bonus, if you sign up, I'll send you the Trial-to-Paid Conversion Checklist.  If you thought there was a lot to take in in this article, oh dang, I haven't even gotten started yet.  There's over 50 (relatively) simple suggestions and improvements you can make to your SAAS business.  I'm going to expand and expound on them in the coming articles, but if you want a preview and a handy list, subscribe today!

Great!  The Superhero Will Make It All Better!

Oh jeeze, it rarely happens like that in the comic books these days, and in real life it's much the same.  Batman may toss the villain in jail, but the economic inequality tearing Gotham apart still persists.  Trial-to-Paid Conversion can help you improve your business in a major way, but it's still just a part of the whole complex, tricky process. You can't just focus on one part to the exclusion of the whole.

Creating a SAAS service and building a business around it is hard work with huge potential rewards.  You're going to have your hands full answering customer emails and redesigning your marketing site and developing that next new feature your users are clamouring for. If you're going to put all that hard work in there, you're going to want to make it count. Getting your Trial-to-Paid Conversion right is going to make the most of that hard work and help you get the most from your business.

And just like the rest of your business, there's no "one simple trick" you can use to "fix" your Trial-to-Paid Conversion rate.  It's a holistic approach you take with respect to your service and your potential users.  Each of the Five Pillars is important in its own right and can be used to really make a difference, but in combination, they're even more powerful.

I'll be going more in-depth for each Pillar in the coming weeks, since there's way more to each of them than a few paragraphs in this already too-long article to do them justice.  If you're interested in pumping up your Trial-to-Paid Conversion and your SAAS business in the process, I hope you'll come along for the ride!