On Converting FreeUsers 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 million15 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

InterestNo Alternative

UrgencyConveniencePeer Pressure

NoveltyStatus

What about software?

When copies are free, you need to sell things which

cannot be copied.

What can’t be copied?

Trust

ImmediacyPersonalizationInterpretationAuthenticityAccessibilityEmbodiment

PatronageFindability

Maximizers vs Satisficers

Best PriceBest Product

Best Overall Solution

Excercise 1

ImmediacyPersonalizationInterpretationAuthenticityAccessibilityEmbodiment

PatronageFindability

You make what you measure.

Point

Point

Start

End

Count

Log = Action + Timestamp

ActionTimestamp

ReferrerIP Address

Cookie / SessionServer DataClient Data

ViewsClicks

SubmitsKeystrokes

Positive / NegativeLikert Scale

RatingsMultiple ChoiceOpen 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

.NET

3 years to launch

Launched : 1996

50 Employees

regonline

Conversion per 100 Visits

Free Paid

7.00% 1.00%

11.00% 1.00%

8.00% N/A

1.52% 1.14%regonline

Shareware0.5%

Dropsend1% - 2%

Casual Download Games2%

Other Freemium ServicesRange from 1.5% to 5%

Average Overall less than 3%

Ning3%

Flickr5-10%

AdultFriendFinder10% - 22%

Habbo : 10% of playersClub Penguin : 25% of uniquesRunescape : 16.6% of uniquesPuzzle Pirates : 22% of players

Top 10

TurboTax Online70%

Things to Keep in Mind

Seasonal Effects

Best Worst

Mar Dec

Jan Dec

Jan/Feb Dec

Sept Decregonline

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

Powered By Logo339% increase in click through

Video Spokesperson11% increase in registrations

Why Register Online? 6% increase in registrations

regonline

Customer Lifetime Value

Customer Referral Value

The Original

The Winner

Excercise 5

Off the Funnel

Best PriceBest Product

Best Overall Solution

Relationshipsas a Metaphor

Intimacy Passion

Commitment

NonloveLiking

Infatuated loveEmpty love

Romantic loveCompanionate love

Fatuous loveConsumate Love

Intimacy Passion

Commitment

Existing Users :: Marriage

Dr. John Gottman

Everyone fights.

Cost / BillingUsers’ UsersPerformanceRoadmapOthers

MoneyKidsSex

TimeOthers

How it’s done.

When Things Go Wrong

Enlightened Hospitality

Importance of Fun

Keeping the Romance Alive

Bibliography

Questions?

Thanks!