Converting SaaS (News - Alert) users is an ongoing challenge, since it's not enough to convert them once, as in an e-commerce purchase. SaaS visitors need to be converted over and over, as they get more engaged with the online service, and go from being an anonymous visitor, to a trial user, to an active trial user, to a paying customer. And if you thought you were done at “paying customer,” think again, since one of the biggest challenges for SaaS companies is customer churn, so even if you have great paying customers, you need to continually convince them to renew their contracts, which is conversion all over again.
The SaaS conversion funnel can be broken down into four levels, each of which is a process unto itself:
Based on our own experience with our SaaS offering and the large number of SaaS customers that we serve, we developed the following insights and tips for how to improve conversion at each of four stages.
Stage One: Acquisition: New Visitor --> Registered Member
In Stage One, you are trying to convince anonymous visitors to try out your service. You don't really know if they're qualified yet, and the most information you have about them is where they came from, what keywords they searched on, and what pages they viewed on your site. Here are some tips to get these unknown quantities to register on your site.
Stage Two: Activation: Registered Member --> Free Active User
Registering for your SaaS application is no guarantee that the registrants will try it out. Put yourself in the user's shoes – he could have ten tabs open on his browser, each with a different solution under consideration, while he winnows them down to his short list. And you want to be on that short list of apps that he actually tries, since playing with the software will of course make him fall in love with it. Here are some tips to convert your users at stage two
Your app may be designed with experts in mind, but bear in mind that everyone starts as a beginner. Try to approach your app with fresh eyes and anticipate what brand new users will want to try first, and make it easy to access.
You have only few seconds to make the user understand what you want him to do before he gives up. If he can't get that first feature to work right away, he may just assume your app is broken. Through user analytics or actual interviews with users, determine the top five things a new user would want to do. Then focus on making it super-easy for them to accomplish those five things. One quick way to accomplish this is by using step-by-step guides, actually taking the user by the hand and leading him to complete the required steps. This can be done with third-party tools, or you can ask your developers to create tool tips to walk users through these key processes. Remember, your app may do five thousand things, but that is not necessarily relevant at this stage. Most important is to help your user get his feet wet and gain confidence in how easy your app is to use. If you can get past that hurdle, you will have time later to introduce them to more advanced features.
Users that contact your support or sends an email are literally the best thing that can happen to you. This means these users spent valuable time investigating your system, and that they want to learn how to do things that are important to them. Make sure that contact us information is available at the website footer. Just to be doubly sure, send the new user an email with all the contact information he will need in case he gets stuck. You can even go the extra mile and provide live chat, live feedback or live walk-throughs to these users.
Follow up with your users via e-mail, invitations to webinars and even phone calls, if applicable. At the same time, make sure the content you give them is relevant to the user's shown areas of interest. The secret to keeping a user engaged is in providing the information they can use, while avoiding over-saturation and thus, user “tune-out.”
Stage 3: Revenue: Free Active User --> Paying Customer
This is the holy grail of freemium conversion. You might have thousands of users on your free service, but until you can get them to convert to paying customers, your dreams of revenue will remain just that, dreams. Assuming that your premium, paid version provides added value that is of interest to your target market, there are certain things you can do at this stage to encourage them to convert:
Your best premium user is the one who understands the value premium features bring, so it's important that they know how to fully use them. Training helps your users exploit the system to its maximum potential, constantly exposing them to the utopia of, “If only I had the premium version.” Different people learn differently, and some have more or less time to invest. Various training methods we recommend include webinars (live and on-demand), live walk-throughs of the site, and pre-recorded videos. Of course, it goes without saying that you need top notch, searchable documentation, available on site.
Make sure that your users are aware of your premium features. You never know which feature will catch the attention of a user and drive him to upgrade his account. An email newsletter highlighting several premium features can help this process along. Monitoring click throughs can give you an indication of what the hot button issues are. For example, if you see a lot of click throughs on a mention of security features (e.g. SSL) you will know that this is a feature worth further highlighting, to drive conversions to premium service.
When buying low price services, most people (or companies) don’t mind paying with their credit card. But, paying recurring monthly bills of hundreds of dollars might need a standing order, or pre-payment in advance, rather than putting them on a credit card. Depending on your target market, you may wish to offer PayPal (News - Alert) as a payment option. Lastly, most people feel safer giving their credit card details when they know that they can change their mind. So be sure to offer a money-back guarantee, and make sure your finance team is willing to stick to it. The last thing you need is someone tweeting about how your SaaS company ran away with their $20.
Follow up with information, success stories and case studies of happy, relevant customers to show how your service already benefits users like them. Call to check how satisfied they are and to ensure that they have access to all the features they need. Also, once your users reach the limits of the free trial/usage, don’t be shy about sending a nicely worded warning mail – if they've gotten to the point where they need your software, they will be quick to pay, since they don't want to lose something they need. If you see that even the warning email gets ignored, try to reach them another way, to see if you can convince them to stay with your solution.
Stage 4: Retention: Paying Customer --> Renewed Customer
This can sometimes be the trickiest stage of all, since vendors can become complacent, thinking if the customer has already paid, he must be happy. But come renewal time, they will vote with their credit card, and may decide not to continue your service.
Many customers prefer autorenewal since they do not have to go searching for the credit card, and they do not want to take a chance of losing even one day of a service they are using. Try to get a large portion of your customers on the autorenewal track, since it reduces paperwork and chasing. Of course some people hate autorenewal, and some companies even have a policy against it, so make sure it's not something you force on your customers.
It seems a bit backwards if your users do everything via your app on the web, but when it comes to renewal time they have to pick up the phone or send an email to a representative. The renewal process should be as easy to accomplish as any other feature on your app. If you can make it web-based and basically frictionless, your chances of encouraging renewal are greater.
Your users probably don't have your app's renewal date on their calendar (sad, but true). Send them an email ahead of time to warn them that their contract is about to expire, and incorporate a warning on the app itself when you get into countdown phase.
Throughout the subscription period, remind your users how much they gain by using your application. You can do this through personalized email newsletters that provide statistics and insights into their usage of the app; or you can highlight their usage within the app itself in an automatically generated dashboard. Users may not even realize how much value they are getting from your app, unless you point it out to them.
Don't forget to market to your existing customer base, and to share good news with them about any new features you roll out. This may be just the feature that keeps them coming back at renewal time.
The Bottom Line: Successful SaaS Conversion is a Step-by-Step Process
As you have already read, SaaS conversion is done to its fullest potential by understanding the stage of the conversion process and approaching the user with this in mind. If you follow the steps above, while correctly identifying and responding to the user's needs, you will keep him coming back for more – as a satisfied customer, as a paying customer, and eventually as a renewal customer. And every satisfied customer you achieve opens the floodgates to a steady client base.
Rafi Sweary is a co-founder of WalkMe.com, the world's first interactive online guidance system, enabling organizations to overlay on-screen “Walk-Thrus” into their websites or apps. These “Walk-Thrus” assist end-users in quickly and easily finishing even the most complex tasks, thus, helping organizations fight the “gremlins” that take their marketing efforts off-track. To learn more about WalkMe, visit www.walkme.com.
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