How to Build a Funnel that Will Grow Your Subscription Business the Fastest

How to Build a Funnel that Will Grow YourSubscription Business the Fastest Lars Lofgren Marketing Analyst - June 2012 info@kissmetrics.com - Confidential - Do not distribute

@larslofgren #KISSwebinar

We’ll cover...1 What is activation?2 4 levers for industry domination3 Common pitfalls of testing

WHAT ISActivation?

Your SaaS funnel

Are people using your product? Not only do people need to create an account, they need to start using your product.

No value = no sale

How to define activation Activation = the critical step people need to take in order to get value from your product

Facebook Activation

Evernote Activation

Instagram Activation

Basecamp Activation

Make sure to track activation It’s the most important part of your funnel and everyone forgets it.

FUNNELLevers

What’s a lever? A change to the funnel that helps you maximize users or revenue.

Lever #1 Free Trials

Trial Funnel Visited Site Trial Sign Up Activated Upgraded

Basecamp Free trial

On-ramp program is critical You have a limited number of days to make the sale. Don’t waste them.

What’s your on-ramp program? The new user experience (NUX) should be completely different than your regular program.

Shopify NUX

14, 30, or 45 day trial?

Replacing the free trial Try replacing your free trial with a 30- day money back guarantee.

Lever #2 Freemium

Freemium Funnel Visited Site Free Sign Up Activated Upgraded

Looking for user growth? Freemium is where you want to be.

What do you limit? There’s a balance between offering enough so people sign up but not offering too much so they never upgrade.

Common Freemium Limits1 Dropbox = 2 GB of Storage2 Evernote = 60 MB of Uploads3 MailChimp = 2,000 Email Subscribers

MailChimp Freemium

Freemium users take forever to upgrade Very difficult to track changing behavior over time with a long-term funnel.

Cohort reports help a lot with freemium

Lever #3 UP-FRONTCredit Cards?

When do you collect credit card info? At account creation or at upgrade?

Credit cards up front Fewer people will create an account but a LOT more will upgrade (especially if the upgrade is opt-out).

Credit cards at upgrade Much easier to get people to create an account, much harder to get them to upgrade.

AWeber $1 Trial

Maximizing users or revenue? If users, try no credit card. If revenue, try up-front credit cards.

Lever #4 MONTHLY OR ANNUAL Billing

Users or revenue? Monthly gets more users, annual gets more revenue.

CrazyEgg used to be monthly

Your Funnel Levers 1 Free Trials 2 Freemium 3 Credit Cards Up Front 4 Monthly or Annual Billing

Test different levers for most growth

COMMONPitfalls

WHAT TO FOCUS ON First?

Look for bottlenecks in your funnel What step is a serious roadblock for people?

Very few people go from Activation to Upgrade

Use levers to fix bottlenecks

ARE YOU ONLY TESTING THE Funnel?

Variation B performs the best in this funnel

Variation A gives the most revenue

SHOULD WE TESTRandomly?

Why did you get your results? If you just start testing without first understanding user behavior, you won’t be learning.

Do you have qualitative data? Once we understand our users, then we can work the levers for the best fit.

Where do we get qualitative data? Talk to your customers.

Other options?

Q&A Time! Lars Lofgren llofgren@kissmetrics.com @larslofgren

How to Build a Funnel that Will Grow Your Subscription Business the Fastest

by KISSmetrics on SlideShare on Jun 28, 2012

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