March 26, 2012
We analysed our trial data and found that the vast majority of people who never converted from free trial to paid-up had logged into the software only once or twice. It could be argued that this just means they quickly determined the software wasn’t for them and went off into the sunset never to be seen again. Maybe.
But we phoned up thousands of would-be customers and asked why they hadn’t continued with the software – the overwhelming response was “I just never got around to looking at it properly”.
The science of customer acquisition is massively complex, and it’s very interesting seeing KashFlow be so open about their experiment. I have a couple of thoughts around trial periods.
If they don’t start using the product straight away, they never will
I’m a firm believe in the adage that immediacy is everything. I’ve long thought that for many applications an extended trial period only gives prospective customers the ability to put off actually diving in and learning about the software. By putting this off the software remains out of sight. And, as we all know, when something is out of sight it tends to be out of mind. SMBs (the target market for KashFlow) are very time poor and are constantly faced with a deluge of things to do. I’ve seen it happen time and time again that when a task is put off for an extended period of time it has the tendency to slip off the radar and be forgotten. I suspect that a significant proportion of the cold prospects that SaaS companies in the SMB space have are ones who simply “never got around” to trying out the product.
Complex solutions need sufficient due diligence
Accounting solutions, even for SMB customers, have a degree of complexity that shouldn’t be under emphasized. There is a high degree of functionality that SMBs need to assess to determine suitability for purpose. The move to 14 days gives SMBs a very limited time frame with which to try a product and many people would suggest that by limiting this time many users simply avoid signing up at all.
The other issue that is of real relevance for users of SMB accounting software that are migrating from a legacy solution is the significant barriers to migration that exist. Moving from desktop accounting to cloud accounting products is a very difficult process – I’ve been involved in moving 10 or so businesses from MYOB to Xero for example, despite having 15-odd years experience in SMB bookkeeping, and having studied accounting practice, it really is a dog of a process. As an aside that’s one of the reasons that I’m part of a joint venture, LiveMigrate, that offers a migration service from desktop to cloud accounting products – automating migrations is, I believe, one of the the biggest things a vendor can do to increase conversion and uptake.
This is a complex area and their are people who focus exclusively on strategies for sales pipeline management. I don’t purport to be such a specialist and I suspect the majority of SaaS vendors are also not experts and cannot afford the services of these specialists. Luckily there are a range of analytics tools available that SaaS vendors can use behind the scenes to measure this process. In particular Totango is a tool that helps vendors gain an understanding of users behavior resulting from different product offerings, trials and marketing communications to prospects.
The example that some commenters on the initial post gave of prospects who might sign up for a trial only to be cut off after the 14 day free period but before fully assessing the application is a valid one. While not resolving all the issues people brought up, it might be worth KashFlow automating a change whereby trialists that use the application over a certain amount, but haven’t fully made a purchasing decision, are offered an extension to their free trial.
Either way it’s an interesting experiment and I look forward to seeing some more data surfaced about the results.