Recently KashFlow CEO Duane Jackson made the decision to reduce the trial periods offered on his product from 60 days down to 14. In blogging about this change, Jackson explained the decision saying;
We analysed our trial data and found that the vast majority of people who never converted from free trial to paid-up had logged into the software only once or twice. It could be argued that this just means they quickly determined the software wasn’t for them and went off into the sunset never to be seen again. Maybe.
But we phoned up thousands of would-be customers and asked why they hadn’t continued with the software – the overwhelming response was “I just never got around to looking at it properly”.
The science of customer acquisition is massively complex, and it’s very interesting seeing KashFlow be so open about their experiment. I have a couple of thoughts around trial periods.
If they don’t start using the product straight away, they never will
I’m a firm believe in the adage that immediacy is everything. I’ve long thought that for many applications an extended trial period only gives prospective customers the ability to put off actually diving in and learning about the software. By putting this off the software remains out of sight. And, as we all know, when something is out of sight it tends to be out of mind. SMBs (the target market for KashFlow) are very time poor and are constantly faced with a deluge of things to do. I’ve seen it happen time and time again that when a task is put off for an extended period of time it has the tendency to slip off the radar and be forgotten. I suspect that a significant proportion of the cold prospects that SaaS companies in the SMB space have are ones who simply “never got around” to trying out the product.
Complex solutions need sufficient due diligence
Accounting solutions, even for SMB customers, have a degree of complexity that shouldn’t be under emphasized. There is a high degree of functionality that SMBs need to assess to determine suitability for purpose. The move to 14 days gives SMBs a very limited time frame with which to try a product and many people would suggest that by limiting this time many users simply avoid signing up at all.
The other issue that is of real relevance for users of SMB accounting software that are migrating from a legacy solution is the significant barriers to migration that exist. Moving from desktop accounting to cloud accounting products is a very difficult process – I’ve been involved in moving 10 or so businesses from MYOB to Xero for example, despite having 15-odd years experience in SMB bookkeeping, and having studied accounting practice, it really is a dog of a process. As an aside that’s one of the reasons that I’m part of a joint venture, LiveMigrate, that offers a migration service from desktop to cloud accounting products – automating migrations is, I believe, one of the the biggest things a vendor can do to increase conversion and uptake.
My suggestions
This is a complex area and their are people who focus exclusively on strategies for sales pipeline management. I don’t purport to be such a specialist and I suspect the majority of SaaS vendors are also not experts and cannot afford the services of these specialists. Luckily there are a range of analytics tools available that SaaS vendors can use behind the scenes to measure this process. In particular Totango is a tool that helps vendors gain an understanding of users behavior resulting from different product offerings, trials and marketing communications to prospects.
The example that some commenters on the initial post gave of prospects who might sign up for a trial only to be cut off after the 14 day free period but before fully assessing the application is a valid one. While not resolving all the issues people brought up, it might be worth KashFlow automating a change whereby trialists that use the application over a certain amount, but haven’t fully made a purchasing decision, are offered an extension to their free trial.
Either way it’s an interesting experiment and I look forward to seeing some more data surfaced about the results.
(Cross-posted @ The Diversity Blog – SaaS, Cloud & Business Strategy)
This is interesting stuff Ben and you’ve pretty much covered why.
The science and the art around this is critical for success (or failure) of all vendors and is still either overlooked or not not enough attention paid at least.
A couple of points to add.
With entry-level products, trial length can actually be rolled up as part of the pricing equation! It may sound fickle, but who said customers aren’t fickle?
In this respect, 60 days was an advantage of course. 14 days is one extreme to the other. Being part of the marketing mix, this may result in a temporary dip in trial sign-ups. Probably countered quickly by ever-growing trial numbers gained by ever more intense marketing and awareness.
The point is with over 100 triallists a day, with the data gained in the first month on behaviour
they can quickly see what’s happening; what’s working or not etc. And tweak accordingly.
There was also an element of lock-in with a longer trial length. Yes horror, but I’ve said it! As Duane said, “I want people to love it, not feel locked in”!
My gut feel is that 14 days may be too short for KashFlow users, but the data will be easier to analyse to make that judgement. As I said to Duane, people decide No much quicker than Yes. This is in response to their analysis of how many times users log in correlating with whether they convert.
Data around where marketing and sales crossover is always interesting. The point is it can be measured and results analysed. You wont get the psychology of every user, but you can ensure longevity of the service.
All this has an effect on how the brand Is perceived too. This is just another part of a larger project to redefine the company and solution. Be interesting to see how it all looks when the dust has settled.
Cheers
Neil
@SaaSitUK
I agree with the initial remark that if the users don’t “jump into” the software immediately, they are very probable to “forget” or bypass.
The idea behind the 14-day trial is to somehow “push” the prospect to actually jump on the horse, ASAP.
True, 14 days are not enough. It could be a good idea to have a customer support representative call on the customer on the 15th day and ask “is everything alright? Do you need any help?” In my book, this shows vendor proactivity and if I was the buyer I would appreciate it.