On Converting Free
Users to Paid Users
Kevin Hale
Future of Web Apps · Miami · Feb 23, 2009

particletree.com

treehousemagazine.com

wufoo.com

150,000+
1.3 million+
2 million
15 million

Individuals, Developers,
Designers, Non-Profits,
Teachers, Students,
Universities, Research,
Real Estate, Marketing,
Healthcare, Banks, SMBs

Why are you here?

Freeloaders

Overcoming the
Power of Zero

Interest
No Alternative
Urgency
Convenience
Peer Pressure
Novelty
Status

What about software?

When copies are free,
you need to sell things which
cannot be copied.

What can’t be copied?

Trust

Immediacy
Personalization
Interpretation
Authenticity
Accessibility
Embodiment
Patronage
Findability

Maximizers vs Satisficers

Best Price
Best Product
Best Overall Solution

Excercise 1

Immediacy
Personalization
Interpretation
Authenticity
Accessibility
Embodiment
Patronage
Findability

You make
what you measure.

Point
Point

End
Start

Count

Log = Action + Timestamp

Action
Timestamp
Referrer
IP Address
Cookie / Session
Server Data
Client Data

Views
Clicks
Submits
Keystrokes

Positive / Negative
Likert Scale
Ratings
Multiple Choice
Open Feedback

The Ultimate Question

Tools

google.com/analytics/

web.analytics.yahoo.com

omniture.com

haveamint.com

crazyegg.com

clicktale.com

wufoo.com

surveymonkey.com

formassembly.com

dabbledb.com

google.com/talk/
service/badge/New

Excercise 2

Your Economic Engine

Benchmarks

Web App
Autopsy
SXSW 2007

PHP
6 months to launch
Launched : July 2006
3 Employees

Ruby on Rails
3 months to launch
Launched : July 2005
6 Employees

Java
5 months to launch
Launched : February 2004
~30 Employees

regonline
.NET
3 years to launch
Launched : 1996
50 Employees

Conversion per 100 Visits
Free Paid
7.00% 1.00%
11.00% 1.00%
8.00% N/A
regonline 1.52% 1.14%

Shareware
0.5%

Dropsend
1% - 2%

Casual Download Games
2%

Other Freemium Services
Range from 1.5% to 5%
Average Overall less than 3%

Ning
3%

Flickr
5-10%

AdultFriendFinder
10% - 22%

Habbo : 10% of players
Club Penguin : 25% of uniques
Runescape : 16.6% of uniques
Puzzle Pirates : 22% of players

Top 10

TurboTax Online
70%

Things to Keep in Mind

Seasonal Effects

Best Worst
Mar Dec
Jan Dec
Jan/Feb Dec
regonline Sept Dec

Early Adopter Frugal Factor

7,000 invitations sent
to potential Beta Testers.
Only 3,500 created an account.
Only 50 of them became customers
(and we o ered them half o ).

Moving the Needle

The Funnel

Reduce Friction

Number of Steps

Label Placement

Multiple Columns

Excercise 3

Increase Awareness

Excercise 4

On Promotion Codes

Successful Changes

regonline
Powered By Logo
339% increase in click through
Video Spokesperson
11% increase in registrations
Why Register Online?
6% increase in registrations

Customer Lifetime Value

Customer Referral Value

The Original

The Winner

Excercise 5

Off the Funnel

Best Price
Best Product
Best Overall Solution

Relationships
as a Metaphor

Intimacy Passion
Commitment

Nonlove
Liking
Infatuated love
Empty love
Romantic love
Companionate love
Fatuous love
Consumate Love

Intimacy Passion
Commitment

Existing Users :: Marriage

Dr. John Gottman

Everyone fights.

Money Cost / Billing
Kids Users’ Users
Sex Performance
Time Roadmap
Others Others

How it’s done.

When Things Go Wrong

Enlightened Hospitality

Importance of Fun

Keeping the Romance Alive

Bibliography

Questions?

Thanks!