Sometimes in such a young industry such as SaaS it’s frustrating not having a long historical benchmark with which to compare performance. Given that I was pleased read a post from Oprius (review here) CEO Alan Smith the other day detailing those two important metrics. The following is a chart detailing the Oprius 2008 conversion and retention statistics (I haven’t seen the raw data to prove the stats but I trust what they say).
While Alan wasn’t prepared to divulge total paying customer numbers, he did mention that as of January 2009, Oprius was profitable. However doing some sleuthing and utilising compete.com the web traffic information source, we can see that in January Oprius had just north of 27000 unique browsers. If we take off 10% or so for junk traffic and that equates to about 1700 users trialling their products and just over 800 converting to paying customers.
Based on a $15 per month subscription, that’s annual recurring revenue of $150000 generated in January alone. Looking at the slope of the traffic graph, and averaging the monthly visitors, Oprius is rapidly heading towards $1milion revenue, and of that only $20000 or so can be expected to drop off in any one year.
So here is a challenge to other privately held SaaS companies – let us know how you did in 2008 – we’ll keep a bit of a score card here at CloudAve, do a bit of educated guessing and try and make some sense of out of the figures.
Compete is notoriously inaccurate but that aside – I can’t see how you’re getting to $1 mill. Do you have an extrapolated growth table based on best fit? The best I can manage assuming the last 2 months is something around $300-400k
I am baffled by the free > paid conversion ratio, when the industry average is in the (low) single digit range. I really would like to know what the “secret sauce” is
Hi Zoli:
Obviously every company wants to keep their secret sauce to themselves as it directly relates to their competitive advantage.
I will say that conversion ratio’s for trial to paid in my experience are the result of 5 factors.
1 – How niche you product is.
2 – How big of a problem you are solving for that niche.
3 – How quickly a user can learn your product.
4 – The level of free support you give to your trial users.
5 – How well you are targeting your web traffic through marketing efforts. (The more broad your marketing on driving traffic to your web page the lower your conversion ratios will be.)
Balance those and you will have as good of conversion as you can for your product , market, and industry.
Alan Smith – CEO – Oprius
Ok well we have proven number 5 to be true. After all the press that posting our conversion stats got us it quadrupled our web traffic for last week and drove down our web traffic conversion stats because the people coming were interesting int he company no the product.
Happy I could prove my own ideas for you.