Freemium marketing The approach has become similar between B2C and B2B software providers. Given that most see less More than 5% To move free users to a payment plan, even a slight improvement in conversion can turn into significant revenue gains. The (multi) million-dollar question is, how do they do it?
The answer lies in product analysis, which gives teams the ability to ask and answer any number of questions about the customer’s journey on an ad hoc basis. Combined with a commitment to testing, measurement and iteration, it puts data in the driver’s seat and helps teams make better decisions about what’s in the free tier and what’s behind the payer. Successful enterprises make this evaluation a continuous practice.
Often, the truth of product analysis is that actionable insights come from some piece of data and it can take time to understand what is happening.
Sweat small stuff
A freemium business model is simply a set of interconnected funnels. From leads all the way through to engagement, conversion and retention, understanding each step and making small adaptations at any level will also have implications for the bottom-funnel. Start by using product analysis to understand the nuances of what is working and what is not, and then double up on the former.
For example, identify specific individuals who perform well and perform poorly. While your overall conversion average may be 5%, there may be segments converting to 10% or 1%. A light can shine to focus on understanding the difference. This is where the right analytics can deliver significant results. But if you don’t understand What, Why the And How To improve, you make a guess. And it is not a modern mode of operation.
There is a misconception that Volume Is equal to data value of data. Suppose you want to start your funnel by purchasing pay-per-click traffic. You see a high volume of activity, with a sales team busy with numbers and calls at the beginning of your funnel. However, you come to know the increased traffic, which initially seemed very promising, resulting in very few users converting to paid plans.
Now, it is as old as PPC, but in small percentage this is the story do Change has a lot to learn to focus your efforts – which product features keep users hooked and which are untapped. Often, the truth of product analysis is that actionable insights come from some piece of data and it can take time to understand what is happening. Getting users to plan for free is the first step in conversion. Testing and iteration continues from there.
Fallen and fallen
Within the free tier, users can use whatever features – they can be satisfied. If your funnel is full of very weak users, you have solved the problem of at least adoption, so why are they stuck? Without a testing and tracking approach, you will struggle to understand your users and how they, by section, will react to changes.