Offer upgrade with urgency to reduce SaaS churn
Persuade users to upgrade by offering them with promotions that they cannot refuse. A powerful promotion coupled with urgency is a great way to skyrocket free trial to paid conversions.
Grammarly does an exceptional job at highlighting the upgrade to a business tier in the interface.
GetResponse offers an 18% discount on annual billing that’s a perfect way to create urgency for upgrade promotions.
Booking.com smartly uses urgency and promotions to persuade users to book now.
How to use the technique
- Create relevant promotions based on user data, buyer personas, and your software. Such as a limited time discount. Get feedback from users as to what type of promotions they expect. Use our free churn optimization framework to get help on doing research.
- Link promotions to user behavior. For instance, if a user has used a specific feature of your app during the trial, link promotion to that particular feature. You can reduce churn with this simple technique.
- Create urgency. The upgrade promotion should have an element of urgency attached to it. Let users know this promotion is available for a limited time only.
- Clearly communicate the promotion. Send emails and notifications to pre-sell promotion. Send regular reminders to make users realize it’s urgent and important.
- Describe the benefits of an upgrade along with the promotion. Differentiate upgrade promotion from a simple upgrade for persuasion and reducing churn rate.
- Focus on upgrades. The purpose of the promotion and urgency should be to convert trial users to paid customers. Don’t dilute the actual benefits of the upgrade in the process.
- Measure conversions. Analyze different upgrade promotions. Improve promotions based on user feedback. This free actionable guide will show you how to do it.
Mistakes to avoid
- Offering upgrade promotions to all the users. Don’t do it. Only offer upgrade promotions to users who haven’t converted. Making it a norm will negatively impact conversions as users will always expect an upgrade promotion.
- Fake urgency is suicidal. If it’s urgent, make sure it is real. Remove promotion after the said time period passes. Don’t make it permanent.
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Zhu, Yang, and Hsee published an article in the Journal of Consumer Research (JCR). The authors conducted 5 different experiments to measure the impact of urgency on consumer behavior. The results revealed that individuals are more likely to prioritize unimportant task over important task when the former is characterized by urgency. It is known as mere urgency effect which reveals how consumers value urgency during buying.
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