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How to Build a Funnel that Will Grow Your Subscription Business the Fastest Lars Lofgren Marketing Analyst - June 2012 [email protected] - Confidential - Do not distribute
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How to Build a Funnel that Will Grow Your Subscription Business the Fastest
Lars LofgrenMarketing Analyst - June 2012 [email protected] - Confidential - Do not distribute
@larslofgren #KISSwebinar
We’ll cover...
What is activation?1
4 levers for industry domination2
Common pitfalls of testing3
WHAT ISActivation?
Your SaaS funnel
Not only do people need to create an account, they need to start using your
product.
Are people using your product?
No value = no sale
Activation = the critical step people need to take in order to get value
from your product
How to define activation
Facebook Activation
Evernote Activation
Instagram Activation
Basecamp Activation
It’s the most important part of your funnel and everyone forgets it.
Make sure to track activation
FUNNELLevers
A change to the funnel that helps you maximize users or revenue.
What’s a lever?
Free Trials
Lever #1
Trial Funnel
Visited Site Trial Sign Up Activated Upgraded
Basecamp Free trial
You have a limited number of days to make the sale. Don’t waste them.
On-ramp program is critical
The new user experience (NUX) should be completely different than
your regular program.
What’s your on-ramp program?
Shopify NUX
14, 30, or 45 day trial?
Try replacing your free trial with a 30-day money back guarantee.
Replacing the free trial
Freemium
Lever #2
Freemium Funnel
Visited Site Free Sign Up Activated Upgraded
Freemium is where you want to be.
Looking for user growth?
There’s a balance between offering enough so people sign up but not offering too much so they never
upgrade.
What do you limit?
Common Freemium Limits
Dropbox = 2 GB of Storage1
Evernote = 60 MB of Uploads2
MailChimp = 2,000 Email Subscribers3
MailChimp Freemium
Very difficult to track changing behavior over time with a long-term
funnel.
Freemium users take forever to upgrade
Cohort reports help a lot with freemium
Lever #3
UP-FRONTCredit Cards?
At account creation or at upgrade?
When do you collect credit card info?
Fewer people will create an account but a LOT more will upgrade
(especially if the upgrade is opt-out).
Credit cards up front
Much easier to get people to create an account, much harder to get them
to upgrade.
Credit cards at upgrade
AWeber $1 Trial
If users, try no credit card. If revenue, try up-front credit cards.
Maximizing users or revenue?
Lever #4
MONTHLY OR ANNUALBilling
Monthly gets more users, annual gets more revenue.
Users or revenue?
CrazyEgg used to be monthly
Your Funnel Levers
Free Trials1
Freemium2
Credit Cards Up Front3
Monthly or Annual Billing4
Test different levers for most growth
COMMONPitfalls
WHAT TO FOCUS ONFirst?
What step is a serious roadblock for people?
Look for bottlenecks in your funnel
Very few people go from Activation to Upgrade
Use levers to fix bottlenecks
ARE YOU ONLY TESTING THEFunnel?
Variation B performs the best in this funnel
Variation A gives the most revenue
SHOULD WE TESTRandomly?
If you just start testing without first understanding user behavior, you
won’t be learning.
Why did you get your results?
Once we understand our users, then we can work the levers for the best fit.
Do you have qualitative data?
Talk to your customers.
Where do we get qualitative data?
Other options?
