SaaS growth strategist Michiel Vermeulen has recently joined InnerTrends in a live webinar on How to boost your SaaS free trial conversion rate – A proven concept for scaling and continuous growth.
Here’s what we discussed:
- Why it’s essential to know the customers you’re attracting, and how to approach different segments for better results – covering marketing, product, and sales perspectives, including product-led approaches;
- How to get more paying customers without adding resources to the team or marketing dollars;
- Understand the influence of the AHA moment on free-to-paid conversion and why alignment on onboarding between marketing and product is crucial;
- How to set up your email strategy – timing and content – to boost conversion from free to paid (emails can impact both onboarding and free-to-paid conversion positively or negatively!)
- The role of product tours or checklists in enabling customers to get to the value of your product faster.
Let’s dive in the webinar wrap-up!
Building the Ideal Customer Profile
It’s very helpful to decide what the ideal customer profile (ICP) looks like.
What’s the ideal profile of people that eventually convert?
If you already have conversions – it could be 100s, or it could be 1000s – there’s information hidden within these conversions, and therefore, there’s a lot to learn from those clients.
We want to know their goals, and their pains; what is the solution that they’re looking for?
The details you can really zoom in on include the type of language they use and the role they hold within their company – the language of a product manager or developer will be different from one another.
It’s not a problem to create more than one ideal customer profile, in fact, it’s very common to build two, or even three. The more profiles you build, the more it strengthens your whole approach.
When you look at the ideal customer profile, several departments are involved. Marketing is making a promise through their messaging, through their content.
Product is also looking at:
- What are the specific features that attract our ICPs?
- What is the value that those people are looking for?
- When do they get this value?
- Does our product really make our values stand out for this specific group of people?
- Are they able to find this value?
- Are they able to get there as quickly as possible?
- Is our product easy to use?
It’s all about helping this ideal customer profile from their point of view from all areas – that’s where sales, customer support, etc. are coming in.
So you need to come up with a customer route or mapping that all departments are aligned on.
RELATED CONTENT ➡️ Check out this free tool and framework to build your Customer journey Metrics Map.
Make your sign-up forms more “difficult” and complement customer interviews and surveys
A lot of companies struggle to define the ideal customer profile because they don’t do enough research through customer interviews, surveys, and so on.
We’re usually told to have very straightforward sign-up forms that are easy and clear for people to complete. But when you don’t know your ideal customer profile, it’s actually better to make your sign-up form more “difficult”, with more fields so you can capture more information.
You can also ask an open-ended question: “What are you trying to achieve today?” followed by a text area where people can expand on their needs and goals.
Your registration rate may go down, and your conversion rate may lower, but sometimes, in order to go faster, you need to go slower first.
So you can collect information about your customer to build your ideal customer profile that way, and eventually convert the sign-up form into very simple steps and you can also customize the content of the onboarding process afterwards.
The AHA moment
The AHA moment is a really important moment in the onboarding process.
To tie it back to what we mentioned at the beginning, the AHA moment is when the client first experiences that your product can solve their pain points.
Most people know of Calendly; if somebody creates a page where people can book a meeting with them, they’ll say, “Oh, Calendly really works, it’s easy to use, etc.” For our purposes, this is the moment when that user experienced the value of Calendly for the first time; it’s the AHA moment.
It’s typically advised that you enable your customers and users to arrive at the AHA moment as soon as possible; but you should never “cheat” here.
So you need to analyze the data to understand what that ideal amount of time is; you don’t get to decide for the user. Instead, you look at the data of the user to determine what that time is.
It’s important to note that the aha moment and onboarding process as a series of technical requirements that a client must complete to experience the intended value of the product.
The reason we say “technical requirements” rather than “technical steps” is because requirements means that if they aren’t completed, the value cannot be experienced or achieved.
To make sure you minimize the amount of time needed to experience the value of your product for this first time, look at the technical requirements. The data will be able to tell you what elements actually have an influence on the onboarding time, and which do not. If you introduce too many technical steps as mandatory, it will make it difficult for you to find out what works and what doesn’t.
Correlation vs. Causation
How you track the data behind these technical requirements is really important – it could be extremely beneficial to track the differences between all of these steps, and any additional goals you may include.
For example, if there’s a correlation of people adding a logo during your onboarding process having a 98% chance of upgrading, you may sit there and say: “Why don’t we ask every person to upload a logo during their first interaction with the product?”
But that’s not how it works – it’s not as simple as by asking everyone to add a logo, they’ll convert. Instead, the conversion is a result that is caused by the value they’ve experienced by adding a logo.
When you learn that adding a logo tends to make people more successful, the conclusion is not: let’s force them to add the logo. You will not make them more successful.
The conclusion is, what makes them add a logo? What is the value that users get from adding a logo? How can we better communicate that value? Can we send an email campaign? Can we make it obvious in our product that users have the ability to add a logo? But you never force it.
Every step can be optimized
Every step can be optimized. So even when you’re really experienced, and if you have everything in place, there’s always something to improve. yYou can improve time to value, you can improve the time it takes to get from step two to step three three a.s.o.
If you have different ICPs, then maybe it makes sense to have different flows for different segments, and then analyze the paths by segment.
The impact of emails on free to paid conversion
What we always see is that people get a message after they sign up. But once you’re logged in, if you get a notification that you’ve received a new email in your inbox, you’re not going to want to change over into your email inbox to look at the new message. Because you’re already in the product.
Instead, you should wait for one day and then send the person an email asking: “Did you find what you were looking for?” The timing is very important.
You can use triggers about specific actions that they’ve done, or moments that they have reached in the system that you can use for sending emails out.
There’s a company we worked with that had 80 email campaigns during the onboarding process. They were targeted, so a person would not get 80 emails, but they had 80 email campaigns defined. So a person would get like five, six emails depending on which scenario they fit into.
Out of those 80 emails, they determined – with the help of InnerTrends pre-built product analytics reports – that around 60 of those campaigns had zero influence on onboarding. Even more so,
15 campaigns had a negative impact. If people were opening those emails, they were less likely to finish the onboarding process. All of those 15 campaigns were forcing people to upgrade; telling people “Upgrade now! Here’s a coupon, here’s a voucher, here’s an offer.” The people receiving those emails were really annoyed by it as they hadn’t experienced the value of the product.
And then they had five email campaigns that had a positive influence. So they deleted 75 campaigns and stuck with the five positive campaigns, and they did much better.
The product tours checklist
There’s a lot of talk about product tours or checklists. They are clearly helpful, and everyone is using them, but first you need to measure where in the process people get stuck.
And not only to understand where the friction is, but also what are the paths that people take to get onboarded and to use your product.
And then you can decide where you want this product tour or checklist to be added.
Going through and completing the checklist also provides the user with a learning element.
The positive thing about these tools is that you can base them on every ideal customer profile, making it a tailor-made process.
Let us reinforce this – there’s always something to improve.
Even if you have a great process, it’s healthy to review things every now and then.
It’s a loop – there are companies that have been on the market for 5-10 years that still go through this loop. Their target audience changes, the product changes, the customer journey sometimes changes. And you always need to be on top of your data to have it accurate because if garbage in, then garbage out.
A lot of companies start with low sign-up rates, low conversion to account creation rate, low onboarding rate, etc. And as they improve these rates, their retention rate suddenly goes up. But they didn’t work on it, they didn’t try to improve it. But because the foundational rates are getting better and better and better, because they are targeting different segments, they are messaging differently, they improve onboarding, the retention improved naturally.
When somebody says they have a retention problem, very rarely have a retention problem. In 90% of cases, they actually have an onboarding problem, or an acquisition problem.
You truly have a retention problem only when your onboarding rate is over 60%. If you have an onboarding rate over 60%, and your retention rate is lowering, you have a retention problem. If you have an onboarding rate that is lower than 40%, don’t even look at fixing retention; it doesn’t matter. Onboarding is the only thing that matters. Fixing onboarding will fix your retention.
By fixing these fundamental things around acquisition and activation will make your SaaS more predictable.
A big thanks to Michiel for joining us in this conversation; be sure to watch the entire webinar and reach out with any questions you may have!