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,
...
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%       ...
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
...
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...
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!
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
Converting Free Users to Paid Users - Fowa Miami 2009
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Converting Free Users to Paid Users - Fowa Miami 2009

  1. On Converting Free Users to Paid Users Kevin Hale Future of Web Apps · Miami · Feb 23, 2009
  2. particletree.com
  3. treehousemagazine.com
  4. wufoo.com
  5. 150,000+ 1.3 million+ 2 million 15 million
  6. Individuals, Developers, Designers, Non-Profits, Teachers, Students, Universities, Research, Real Estate, Marketing, Healthcare, Banks, SMBs
  7. Why are you here?
  8. Freeloaders
  9. Overcoming the Power of Zero
  10. Interest No Alternative Urgency Convenience Peer Pressure Novelty Status
  11. What about software?
  12. When copies are free, you need to sell things which cannot be copied.
  13. What can’t be copied?
  14. Trust
  15. Immediacy Personalization Interpretation Authenticity Accessibility Embodiment Patronage Findability
  16. Maximizers vs Satisficers
  17. Best Price Best Product Best Overall Solution
  18. Excercise 1
  19. Immediacy Personalization Interpretation Authenticity Accessibility Embodiment Patronage Findability
  20. You make what you measure.
  21. Point Point
  22. End Start
  23. Count
  24. Log = Action + Timestamp
  25. Action Timestamp Referrer IP Address Cookie / Session Server Data Client Data
  26. Views Clicks Submits Keystrokes
  27. Positive / Negative Likert Scale Ratings Multiple Choice Open Feedback
  28. The Ultimate Question
  29. Tools
  30. google.com/analytics/
  31. web.analytics.yahoo.com
  32. omniture.com
  33. haveamint.com
  34. crazyegg.com
  35. clicktale.com
  36. wufoo.com
  37. surveymonkey.com
  38. formassembly.com
  39. dabbledb.com
  40. google.com/talk/ service/badge/New
  41. Excercise 2
  42. Your Economic Engine
  43. Benchmarks
  44. Web App Autopsy SXSW 2007
  45. PHP 6 months to launch Launched : July 2006 3 Employees
  46. Ruby on Rails 3 months to launch Launched : July 2005 6 Employees
  47. Java 5 months to launch Launched : February 2004 ~30 Employees
  48. regonline .NET 3 years to launch Launched : 1996 50 Employees
  49. Conversion per 100 Visits Free Paid 7.00% 1.00% 11.00% 1.00% 8.00% N/A regonline 1.52% 1.14%
  50. Shareware 0.5%
  51. Dropsend 1% - 2%
  52. Casual Download Games 2%
  53. Other Freemium Services Range from 1.5% to 5% Average Overall less than 3%
  54. Ning 3%
  55. Flickr 5-10%
  56. AdultFriendFinder 10% - 22%
  57. Habbo : 10% of players Club Penguin : 25% of uniques Runescape : 16.6% of uniques Puzzle Pirates : 22% of players
  58. Top 10
  59. TurboTax Online 70%
  60. Things to Keep in Mind
  61. Seasonal Effects
  62. Best Worst Mar Dec Jan Dec Jan/Feb Dec regonline Sept Dec
  63. Early Adopter Frugal Factor
  64. 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 ).
  65. Moving the Needle
  66. The Funnel
  67. Reduce Friction
  68. Number of Steps
  69. Label Placement
  70. Multiple Columns
  71. Excercise 3
  72. Increase Awareness
  73. Excercise 4
  74. On Promotion Codes
  75. Successful Changes
  76. regonline Powered By Logo 339% increase in click through Video Spokesperson 11% increase in registrations Why Register Online? 6% increase in registrations
  77. Customer Lifetime Value
  78. Customer Referral Value
  79. The Original
  80. The Winner
  81. Excercise 5
  82. Off the Funnel
  83. Best Price Best Product Best Overall Solution
  84. Relationships as a Metaphor
  85. Intimacy Passion Commitment
  86. Nonlove Liking Infatuated love Empty love Romantic love Companionate love Fatuous love Consumate Love
  87. Intimacy Passion Commitment
  88. Existing Users :: Marriage
  89. Dr. John Gottman
  90. Everyone fights.
  91. Money Cost / Billing Kids Users’ Users Sex Performance Time Roadmap Others Others
  92. How it’s done.
  93. When Things Go Wrong
  94. Enlightened Hospitality
  95. Importance of Fun
  96. Keeping the Romance Alive
  97. Bibliography
  98. Questions?
  99. Thanks!

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