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How to Convert Free
 Users to Paid Users
       Kevin Hale
particletree.com
wufoo.com
Freeloaders
Exercise 1
Visit

Try

Buy
100%   Web site visitors

10%    Sign Up to Trial

1%      Paying Users
100%   Website Visitors

10%     Signup to Trial

9%     Login to Account

5%       Active Users

1%      Paying Users

.5...
100%   Website Visitors

10%     Signup to Trial

9%     Login to Account

5%       Active Users

1%      Paying Users

.5...
Increase Awareness
   Reduce Friction
Preserve Momentum
100%   Website Visitors

10%     Signup to Trial

9%     Login to Account

5%       Active Users

1%      Paying Users

.5...
Blackhole of Irrationality
$0.15   $0.01
73%     27%
$0.14   FREE!
31%     69%
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
Exercise 2
Immediacy
           Interest
                         Personalization
        No Alternative
                          In...
Showing Off Features
Quick Notes on Pricing
One Fixed Price
      vs
Tiered Pricing
Direction of Pricing
Features. Features. Features.
Dissect Conversion
AIDAS
Attention
  Interest
   Desire
   Action
Satisfaction
Attention
  Interest
   Desire
   Action
Satisfaction
Focus on Emotions
   Not Intellect
Maximizers vs Satisficers
Momentum
Exercise 3
Most conversions
 happen inside.
Exercise 4
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
Your Economic Engine
Tools
google.com/analytics/
web.analytics.yahoo.com
omniture.com
MixPanel
haveamint.com
crazyegg.com
clicktale.com
wufoo.com
formspring.com
surveymonkey.com
dabbledb.com
google.com/talk/
service/badge/New
olark.com
sitewit.com
Exercise 5
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%       ...
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
Seasonality
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
...
On Promotion Codes
How do we move the needle?
Tests
Sequential Testing
A/B Testing
Multivariate Testing
Confidence Bars
A   A
95%
    100   20%
  1,000   6.3%
 10,000   2%
100,000   0.63%
Successful Changes
The Original
The Winner
regonline
     Powered By Logo
339% increase in click through

   Video Spokesperson
11% increase in registrations

   Why...
Customer Lifetime Value
Customer Referral Value
Exercise 6
Off the Funnel
Before Launch:
 100% development

    After Launch:
 33% dev, 33% bug fix
33% customer support
Best Price
    Best Product
Best Overall Solution
+300,000 users
3.5 million people
   ~300 issues
   +600 emails
  7 -12 minutes
Daily Support
400
               Saturday
               Friday
               Thursday
               Wednesday
300      ...
We are fanatical about
creating meaningful
 relationships with
      our users.
New Users :: Dating
Existing Users :: Marriage
New Users :: Dating
Homepage
Landing Pages
Plans / Pricing
    Login
   Signup
First Email
   Account Creation
Blank / Starting Interface
        Login Link
         Ad Link
     First Support
Existing Users :: Marriage
Dr. John Gottman
Everyone fights.
Money    Cost / Billing
  Kids   Users’ Users
   Sex   Performance
 Time    Roadmap
Others   Others
100%   Website Visitors

10%     Signup to Trial

9%     Login to Account

5%       Active Users

1%      Paying Users

.8...
100%   Website Visitors

10%     Signup to Trial

9%     Login to Account

5%       Active Users

1%      Paying Users

.8...
Enlightened Hospitality
Importance of Fun
Keeping the Romance Alive
Bibliography
Questions?
Thanks!
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
How to Change Free Users Into Paying Customers - Kevin Hale
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How to Change Free Users Into Paying Customers - Kevin Hale

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Take a look at Kevin Hale's slides from FOWA Miami 2010. Kevin discusses how creating profitable and successful Web apps is getting more and more difficult. In this workshop, Kevin has shared some sure-fire tips for converting your users from free to paying customers.

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Transcript of "How to Change Free Users Into Paying Customers - Kevin Hale"

  1. 1. How to Convert Free Users to Paid Users Kevin Hale
  2. 2. particletree.com
  3. 3. wufoo.com
  4. 4. Freeloaders
  5. 5. Exercise 1
  6. 6. Visit Try Buy
  7. 7. 100% Web site visitors 10% Sign Up to Trial 1% Paying Users
  8. 8. 100% Website Visitors 10% Signup to Trial 9% Login to Account 5% Active Users 1% Paying Users .5% Staying Users
  9. 9. 100% Website Visitors 10% Signup to Trial 9% Login to Account 5% Active Users 1% Paying Users .5% Staying Users
  10. 10. Increase Awareness Reduce Friction Preserve Momentum
  11. 11. 100% Website Visitors 10% Signup to Trial 9% Login to Account 5% Active Users 1% Paying Users .5% Staying Users
  12. 12. Blackhole of Irrationality
  13. 13. $0.15 $0.01 73% 27%
  14. 14. $0.14 FREE! 31% 69%
  15. 15. Overcoming the Power of Zero
  16. 16. Interest No Alternative Urgency Convenience Peer Pressure Novelty Status
  17. 17. What about software?
  18. 18. When copies are free, you need to sell things which cannot be copied.
  19. 19. What can’t be copied?
  20. 20. Trust
  21. 21. Immediacy Personalization Interpretation Authenticity Accessibility Embodiment Patronage Findability
  22. 22. Exercise 2
  23. 23. Immediacy Interest Personalization No Alternative Interpretation Urgency Trust Authenticity Convenience Accessibility Peer Pressure Embodiment Novelty Patronage Status Findability
  24. 24. Showing Off Features
  25. 25. Quick Notes on Pricing
  26. 26. One Fixed Price vs Tiered Pricing
  27. 27. Direction of Pricing
  28. 28. Features. Features. Features.
  29. 29. Dissect Conversion
  30. 30. AIDAS
  31. 31. Attention Interest Desire Action Satisfaction
  32. 32. Attention Interest Desire Action Satisfaction
  33. 33. Focus on Emotions Not Intellect
  34. 34. Maximizers vs Satisficers
  35. 35. Momentum
  36. 36. Exercise 3
  37. 37. Most conversions happen inside.
  38. 38. Exercise 4
  39. 39. You make what you measure.
  40. 40. Point Point
  41. 41. End Start
  42. 42. Count
  43. 43. Log = Action + Timestamp
  44. 44. Action Timestamp Referrer IP Address Cookie / Session Server Data Client Data
  45. 45. Views Clicks Submits Keystrokes
  46. 46. Positive / Negative Likert Scale Ratings Multiple Choice Open Feedback
  47. 47. The Ultimate Question
  48. 48. Your Economic Engine
  49. 49. Tools
  50. 50. google.com/analytics/
  51. 51. web.analytics.yahoo.com
  52. 52. omniture.com
  53. 53. MixPanel
  54. 54. haveamint.com
  55. 55. crazyegg.com
  56. 56. clicktale.com
  57. 57. wufoo.com
  58. 58. formspring.com
  59. 59. surveymonkey.com
  60. 60. dabbledb.com
  61. 61. google.com/talk/ service/badge/New
  62. 62. olark.com
  63. 63. sitewit.com
  64. 64. Exercise 5
  65. 65. Benchmarks
  66. 66. Web App Autopsy SXSW 2007
  67. 67. PHP 6 months to launch Launched : July 2006 3 Employees
  68. 68. Ruby on Rails 3 months to launch Launched : July 2005 6 Employees
  69. 69. Java 5 months to launch Launched : February 2004 ~30 Employees
  70. 70. regonline .NET 3 years to launch Launched : 1996 50 Employees
  71. 71. Conversion per 100 Visits Free Paid 7.00% 1.00% 11.00% 1.00% 8.00% N/A regonline 1.52% 1.14%
  72. 72. Shareware 0.5%
  73. 73. Dropsend 1% - 2%
  74. 74. Casual Download Games 2%
  75. 75. Other Freemium Services Range from 1.5% to 5% Average Overall less than 3%
  76. 76. Ning 3%
  77. 77. Flickr 5-10%
  78. 78. AdultFriendFinder 10% - 22%
  79. 79. Habbo : 10% of players Club Penguin : 25% of uniques Runescape : 16.6% of uniques Puzzle Pirates : 22% of players
  80. 80. Top 10
  81. 81. TurboTax Online 70%
  82. 82. Things to Keep in Mind
  83. 83. Seasonality
  84. 84. Best Worst Mar Dec Jan Dec Jan/Feb Dec regonline Sept Dec
  85. 85. Early Adopter Frugal Factor
  86. 86. 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 ).
  87. 87. On Promotion Codes
  88. 88. How do we move the needle?
  89. 89. Tests
  90. 90. Sequential Testing
  91. 91. A/B Testing
  92. 92. Multivariate Testing
  93. 93. Confidence Bars
  94. 94. A A
  95. 95. 95% 100 20% 1,000 6.3% 10,000 2% 100,000 0.63%
  96. 96. Successful Changes
  97. 97. The Original
  98. 98. The Winner
  99. 99. regonline Powered By Logo 339% increase in click through Video Spokesperson 11% increase in registrations Why Register Online? 6% increase in registrations
  100. 100. Customer Lifetime Value
  101. 101. Customer Referral Value
  102. 102. Exercise 6
  103. 103. Off the Funnel
  104. 104. Before Launch: 100% development After Launch: 33% dev, 33% bug fix 33% customer support
  105. 105. Best Price Best Product Best Overall Solution
  106. 106. +300,000 users 3.5 million people ~300 issues +600 emails 7 -12 minutes
  107. 107. Daily Support 400 Saturday Friday Thursday Wednesday 300 Tuesday Monday Sunday 200 100 0 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 2 4 6 2008 2009 2010 Weekly Totals 400 300 200 100 0 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 2 4 6
  108. 108. We are fanatical about creating meaningful relationships with our users.
  109. 109. New Users :: Dating Existing Users :: Marriage
  110. 110. New Users :: Dating
  111. 111. Homepage Landing Pages Plans / Pricing Login Signup
  112. 112. First Email Account Creation Blank / Starting Interface Login Link Ad Link First Support
  113. 113. Existing Users :: Marriage
  114. 114. Dr. John Gottman
  115. 115. Everyone fights.
  116. 116. Money Cost / Billing Kids Users’ Users Sex Performance Time Roadmap Others Others
  117. 117. 100% Website Visitors 10% Signup to Trial 9% Login to Account 5% Active Users 1% Paying Users .8% Staying Users
  118. 118. 100% Website Visitors 10% Signup to Trial 9% Login to Account 5% Active Users 1% Paying Users .8% Staying Users
  119. 119. Enlightened Hospitality
  120. 120. Importance of Fun
  121. 121. Keeping the Romance Alive
  122. 122. Bibliography
  123. 123. Questions?
  124. 124. Thanks!
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