May 12, 2019

Target Right Audience

5. Referrals  >  Target Right Audience

Target right audience for your referral campaign to reduce SaaS churn

Targeting people who are most likely to convert to a paid plan and helping them in achieving their Aha moment with your app will reduce churn to a great extent. Ensure your customer bring the right people on board.

●● FUNCTIONALITY

Evernote

Evernote let’s referral know upfront what Evernote is so they only accept if they see a mutual fit.

Shoeboxed

Shoeboxed clearly tells its customers what type of people they should invite (those who need to get organized and digitize their documents).

Typeform

Typeform tells its customers how exactly they can invite and save 100%. They tell customers what actions referrals should take.

How to use the technique

  • Analysis of existing customers will reveal the most appropriate buyer persona for your app with the highest CLV. Analyze the behavior of your most engaged users. What actions they take. Read our free churn optimization framework for more details.
  • Identify the audience type you wish to target based on data. Forget everything and use data you have to figure out what type of customers you wish to have. The right audience will engage, won’t churn, and will convert to loyal customers.
  • Share details with customers. Tell them what type of people they should invite. Send them emails. Create a referral program page. Clearly identify a few basic characteristics of the type of people they should invite.
  • Identify appropriate users early. Analyze referrals carefully. Identify users that are more likely to convert (based on data you have). Focus on them. Get in touch with them. Help them achieve success with your app early.
  • Use retargeting to bring back the right audience. Don’t lose them. Match in-app actions and behavior of new referrals to your most loyal customers. Retarget best referrals so they don’t lose interest in your app.
  • Constant data analysis is key. Any change in your existing customers’ behavior should reflect in your referral program. Tweak referral audience accordingly. Monitor the success and performance of the referral program. This our free guide is your best resource. 

Mistakes to avoid

  • Not linking targeting audience to an existing buyer persona. Don’t reinvent the wheel. You already have customers and their data. Pick referral audience from existing data.
  • Not sharing details with your customers. This is a big mistake. Tell your customers what you want them to do, what type of people they should invite, and what are the ideal users of your app. Share these details with your customers.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

According to Friendbuy, the optimal sharing rate of the referral link is 15%. However, some customers go the extra mile and the best rate you can expect is 50%. The best conversion rate is 15% which means only 15% of referrals will convert by opting for the free trial. This conversion rate can be significantly improved if your referrals are highly relevant.

15%

Only 15% of referrals will convert by opting for the free trial. This conversion rate can be significantly improved if your referrals are highly relevant.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Track Referral Campaign

5. Referrals  >  Track Referral Campaign

Track referral campaign to reduce SaaS churn

Creating a referral program isn’t enough rather you need to track performance regularly. Identify the right success metrics consistent with your program’s goals. Track engagement of existing customers and referrals, and take necessary improvement actions.

●● FUNCTIONALITY

Typeform

Typeform has an amazing referral program that gives 10% reward to both the customer and the referral.

Lenscart

Lenskart got more than a million customers through its referral program in as low as 2 months.

Shopclues

Shopclues increased its app downloads with its referral program.

How to use the technique

  • Identify the right metrics to measure success. Look at the goals of your referral program for metric identification. Are you trying to increase sales, revenue, leads, or something else? Not sure how to do it? Grab our free churn optimization framework for more details.
  • Set tracking to track events and actions. Track referral links. Intimate customers on the progress of their referrals.
  • Generate daily, weekly, and monthly reports. This is crucial. Daily and weekly reporting help you identify bugs and loopholes on time. Constantly monitor your referral program to fix issues before they convert to massive challenges.
  • Compare reports with industry benchmarks and your previous reports. Do improvements increased referrals? If yes, at what percentage? Compare last year’s churn rate with the current year’s.
  • Identify success. Again it has to be linked to your company’s and referral program’s objectives. Do you really consider the numbers as successful? Is it really a long-term success?
  • Tweak and improve referral program. Measuring success won’t help much if you won’t take the necessary actions for improvement. Track, measure, tweak, and improve. Get our free guide on tracking and tweaking.

Mistakes to avoid

  • Hesitating to change referral program goals. Don’t hesitate to change the goals if it isn’t working. It’s better to change your referral program instead of shutting it down permanently.
  • Not quantifying metrics. It’s challenging to quantify metrics like engagement and brand awareness. However, you have to do it for measurement, tracking, and decision-making. It is necessary to track all the metrics.

Research evidence

The Advocate Marketing Playbook by Influitive found that leads generated by referral programs are 4-10x more valuable than other lead types. It was suggested in the report to measuring metrics for program success to ensure your referral program is doing well.

10x

Leads generated by referral programs are 4-10x more valuable than other lead types.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Design Your Referral Funnel

5. Referrals  >  Design Your Referral Funnel

Design your referral funnel to reduce SaaS churn

A referral funnel is used to define lifecycle journey stages of the new referrals. Defining stages in the funnel help with churn reduction and improve the engagement of existing customers as they get the reward right on time.

●● FUNCTIONALITY

Airbnb

Airbnb created a beta referral program for 2161 customers and it added 2107 new users.

Dropbox

Dropbox has one of the best referral funnels out there that increases signups by 60%.

Evernote

Evernote has over a billion users and 13% of them are referred by their existing users.

How to use the technique

  • Select an appropriate reward. Selecting an attractive reward for your customer and referral is essential. It is the driving force that motivates your customers to take the referral program seriously and actually try to get the reward. Use personas and customer feedback to find a compelling reward. Read our free churn optimization framework for details. 
  • Make it convenient for customers to invite referrals. Allow social sharing, social invitation, and email invitation features. Also, make it easier for referrals to enter the funnel. Reduce form fields. Give them instant access to your app to reduce churn.
  • Referral conversion is an essential stage of the funnel where you decide when a referral as converted and is now eligible for the reward. It could be achieving Aha moment, conversion to a paid plan, or completing a set number of achievements.
  • Let customers track their referral’s progress so they can push them for conversion. This is the best approach to reduce churn. Your customers will do all the onboarding.
  • Send relevant emails for conversion. Send informative and benefit-focused emails throughout the funnel. Send tutorials and help guides based on referral behavior analysis.
  • Reduce friction. Make referral funnel short. Remove distractions. Focus on helping referral to get as fast as possible to the reward. This will help you retain existing customers who are actively involved in the referral program.
  • Minimize the number of actions for successful conversion. Ensure both referral and customer get their due reward quickly. Test different funnel models with different stages and actions for conversion optimization. We have an amazing free guide for you here for further help.

Mistakes to avoid

  • Making funnel too complicated is a big mistake. Your customers have already done the hard part of pre-selling your app, you just have to make onboarding and conversion simple. Don’t make it complex as it will make new referrals churn and the old customers will lose their interest in the program.
  • The reward isn’t attractive. It’s all about the underlying benefit. Though your most loyal customers won’t refer your app for reward, most other customers are interested in reward so as referrals. It should be compelling enough for users.

Research evidence

According to HubSpot, companies having 800+ sales opportunities in their funnel are more likely to exceed expected revenue. While companies with 50 or fewer sales opportunities don’t achieve their revenue goals. This clearly indicates the importance of having a referral funnel so your sales team have a decent number of opportunities anytime in the pipeline to boost revenue.

800+

Magic number of a sales opportunities in the funnel that literally pulls the sales team into achieving their revenue goals.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Set Your Referral Goals

4. Long Term Retention  >  Set Your Referral Goals

Set your referral goals to reduce SaaS churn

Setting clear goals for your referral program is essential. Goals make the destination and path to destination clear. You’d know what you have to do, how you have to do it, and what outcomes to expect.

●● FUNCTIONALITY

Acorns

Acorns has a simple referral program that gives customers $5 for inviting a friend.

Box

Box has a fairly sophisticated referral program for its users.

Zoho

Zoho has a clear and attractive referral program with for its corporate users.

How to use the technique

  • Get feedback from customers and users. Conduct surveys and interviews. Refer to personas and see how likely your existing customers will refer your app to a friend if they like it. Do they refer at all? Is there a persona that’s more likely to participate in the referral program? You can get our free churn optimization framework for actionable insights. 
  • Talk to marketing and sales teams to understand metrics, existing referrals, and how your business can best benefit from a referral program. Do you have to focus on reducing churn? Or, the focus should be on customer acquisition?
  • Set realistic goals based on data. The goal should be challenging yet achievable. Link it to your business strategy. Communicate it to all the teams.
  • Allocate budget. Choose a percentage of revenue. Take your marketing and finance team onboard for budget allocation.
  • Identify appropriate metrics to measure success of your referral program. These metrics should be linked to the program’s goals.
  • Develop a team that will create, execute, and manage the referral program. Train your team, provide them with resources (tools), and assign challenging tasks to the entire team.
  • Monitor and improve referral program. Monitoring and improving will get easier if you know what the program is all about and what metrics you should use to measure performance. This free guide has all the information you need.

Mistakes to avoid

  • Setting goals that aren’t SMART. A SMART goal is specific, measurable, achievable, relevant, and time-bound. Not having SMART goals will create issues at a later stage. Better do it now.
  • Not getting feedback from internal and external customers. It should be based on data and facts. Don’t create it in isolation.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

Latham and Locke published an article in European Psychologist journal where they discussed the benefits of goal setting theory on different variables. The finding revealed that setting goals improves performance and helps in achieving complex tasks. When clear goals are set, it gets easier for businesses to achieve objectives even if they're challenging and complex.

Goal

Setting SMART goals improves performance and helps in achieving complex tasks.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Conduct Exit Interviews

3. Retention  >  Conduct Exit Interviews/Surveys

Conduct exit interviews/surveys to reduce SaaS churn

Don’t let customers walk away just like that. Get feedback via surveys and interviews, and use it for improvement. Understanding more about users who leave will help you improve the retention rate of the existing customers.

●● FUNCTIONALITY

Groove

Groove switched from exit surveys to exit interviews which increased the response rate by 785%.

Papercut

Papercut has 4-items in its exit survey that lets them understand why a particular user is leaving them.

SketchUp

SketchUp has a 3-item exist questionnaire that it sends to users who uninstall the app. Short and accurate.

How to use the technique

  • Create structured surveys. While questions should be general but it’s a great idea to add personalized questions based on user’s interaction with your app. Twist the survey for personalization. Read our free churn optimization framework to get better and conducting research. 
  • Send survey emails at the right time. Send immediately as soon as a user cancel the subscription. Delaying survey email won't yield appropriate feedback. Reach out when they're more likely to remember everything about their interaction with your app.
  • Keep it concise and relevant. The survey needs to be to the point without any fluff. Remember, the users have already churned and any time they spend with your business is of no importance. So make every second count. Make sure the exit survey has no more than 5 questions.
  • Seek permission for an interview call. Though you have their number, don’t call without permission. Schedule a call through email. Don’t label it as an interview call.
  • Let the user speak in an interview. Ask questions. Don’t argue. They have already left. Use call for feedback and leave the retention part on your retention team.
  • Ask relevant questions. What did they like? Did they use the core feature? What feature your software is missing? These questions will help you reduce churn rate.
  • Make improvements based on feedback. Can you add the most demanded feature in your app? Can you tweak a feature as per user’s demand? Improve your app and measure its impact. This is the free guide that you should read for more information.

Mistakes to avoid

  • Mixing exit feedback with retention. An exit interview or survey isn’t for the purpose to retain rather it’s for data collection. Its purpose is to get feedback from users who are no more part of your business.
  • Not taking the necessary actions. Exit feedback is only good when you value the feedback and take appropriate actions to improve your services and software. Not taking improvement measures is one mistake you need to avoid.

Research evidence

Spain and Groysberg in their article published in Harvard Business Review emphasized the importance of conducting exit interviews. They shared best practices to follow when conducting exist interviews including method, timing, frequency, approach, and conversation styles to get better results from interviews.

Exit

Make opinions of your leaving clients count. Try to hear real reason and don't get upset if it's not related to your product.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Write Relevant Emails

3. Retention  >  Write Emails That Are Relevant

Write emails that are relevant to reduce SaaS churn

Nothing beats relevant and personalized emails for customer retention. Reducing churn and making customers stick to your software gets easier with emails that keep them engaged.

●● FUNCTIONALITY

Sleeknote

Sleeknote sends a highly personalized email to customers when their credit card is about to expire.

Duolingo

Duolingo sends informative content to its users for engagement and to build a relationship. Nothing promotional.

Buffer

Buffer sends a progress email to customers showing them a high-performing tweet.

How to use the technique

  • Segment customers based on multiple variables such as demographics, usage, behavior, etc. Segmentation makes personalization easier and effective. Don’t forget using buyer personas. Our free churn optimization framework has actionable instructions for further help, get it now. 
  • Create segmented email campaigns to retain customers, engage them, and to ensure they don’t churn. Personalize email content, format, and schedule based on segmentation. Deliver value with amazing content and make sure there's a meaningful email order.
  • Recommend relevant upgrades. Use data to upsell and cross-sell relevant upgrades that customers cannot refuse.
  • Use website tracking for behavioral targeting. For instance, if a customer used a feature for the first time, send an actionable guide via email for further guidance. This is the type of personalized emails that retain customers.
  • Craft amazing copy. Email is all about its copy. Whether it’s informative content or a promotional email, it should have a great copy.
  • Add powerful CTAs to achieve email campaign objectives. What’s the point of sending personalized emails if customers don’t click? Make CTAs relevant and prominent.
  • Measure success. Is there a particular type of email content that performs better? Is there are a segment that has the highest open rate and CTR? Use analytics to measure the success of your campaigns. We have crafted a powerful guide on testing and analysis, grab it now. 

Mistakes to avoid

  • Sending generic emails is a big NO. Don’t send a single email to all the customers. Make emails relevant and personalized. That’s how it will help you retain them by building relationships.
  • Spamming customers. Sending too many emails. Sending irrelevant emails. Send 1-2 emails a week. Avoid sending too many promotional emails.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

According to Adobe’s report on The ROI from Marketing to Existing Online Customers 40% of revenue of ecommerce retailers in the US is generated by 8% repeat customers. Repeat sales account for a significantly high revenue during the holiday season. It’s all about connecting with existing customers.

40%

This is the enormous cut that are generated by a repeat sales to existing customers. The number spikes up even higher in a holiday season.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Implement Retention Loops

3. Retention  >  Implement Retention Loops

Form a habit with retention loops to reduce SaaS churn

Link your app to customers’ habit so they continue using it unintentionally. You can create a habit loop that includes a cue, reward, and routine that make users engaged. Retention gets a whole lot easier with these loops.

●● FUNCTIONALITY

Pinterest

Pinterest has created a habit loop based on users habit of seeing and sharing relevant content.

Slack

Slack has formed a habit that has made it one of the fastest growing workplace software.

Survey_Monkey

Survey Monkey has a simplified loop consisting of 5 steps: Sign up, survey creation, send a survey, show landing page at the end of the survey, and new signups.

How to use the technique

  • Link your app with a habit. Can your app create a habit or link to an existing user habit? Creating a new habit is far more challenging than tweaking an existing habit. Identify a habit based on buyer personas. Use our free churn optimization framework to learn more.
  • Find a cue. What is the primary motivation that makes customers use your product? Find a single cue that is most relevant to a habit.
  • Make taking action easier. Cue leads to action. Make it easier for customers to use and access your app and take necessary action that will retain them.
  • Pick a reward that users get after taking action. The reward should be instant and relevant to users. It should be as per user expectation.
  • Create a loop. Cue, action, and reward create a loop that develops a habit. Your app has to be at the center of the habit.
  • Use it for retention. The whole point of creating a habit loop is to reduce churn. It should be easy-to-follow and should solve the user problem.
  • Tweak and improve your loop. Does it retain users? Is it actually reducing churn? Do users actually consider it as a habit? Monitoring performance and taking feedback from users will help with improvement. Our free PDF is your best learning source.

Mistakes to avoid

  • The reward isn’t appealing enough for users. It is all about the reward. The habits help users achieve a reward. Make the reward attractive.
  • Not using it for growth. Not using habit loops to convert customers into loyal lifetime customers is a big mistake. Use loops for customer retention and exponential growth.
  • Not paying attention to the ethical side of the question. Make sure new habits introduced by your product aren't holding users back from their life.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

Neal, Wood, and Quinn did research on how habits drive consumer choices and influence behavior. As much as 40% of actions humans take on a daily basis aren’t well-thought decisions rather habits. The actions consumers take are mostly driven by their habits and thus, are not based on active decision-making.

40%

This percent of everyday activities human take because of their habbits. Those don't really enable rational decision-making, 


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 7, 2019

Send An Expiry Warning

4. Revenue  >  Send An Expiry Warning

Send an expiry warning to reduce SaaS churn

Notifying users when their trial is about to expire will remind and motivate them to upgrade. The purpose of expiry warning is to nudge users so they don’t churn and continue using your software.

●●● FUNCTIONALITY

Squarespace

SquareSpace let users extend their trial in the warning email and also tells them what benefit they will get if they choose to upgrade.

Dropbox

Dropbox sends a short warning email to its users that reminds them, tells the benefit of upgrading, and offers multiple plans.

CloudApp

CloudApp has an amazing expiry warning email template that’s extremely personalized and relevant to user behavior.

How to use the technique

  • Send personalized warnings. The best expiry warnings are the ones that are highly personalized. Refer to usage data, pain points, challenges, how the app has been used so far, and relevant information in an email to boost engagement. Refer to our free churn optimization framework for more help.
  • Craft awesome email copy. Create a great email copy. The way how you craft copy is critical for conversions and reducing churn. Keep it short and relevant. Use small paragraphs, bullets, and subheadings. Use interactive media.
  • Tell users how much time they have to upgrade their account. Let them know what will happen if they will fail to upgrade.
  • Add a clear CTA. It is essential to have a clear and descriptive CTA in expiry warning emails. Explain how they can upgrade and continue using the app.
  • Share the benefits of upgrading the plan. An expiry warning doesn’t just have to be a warning rather it needs to explain benefits they have been enjoying and the benefits they will enjoy with a premium plan. Explain the difference between free and premium plan. This works best to minimize churn.
  • Provide help. Not all users are ready to upgrade while others are not sure whether they need to upgrade. Add customer support phone numbers and emails, and invite users to contact you for help.
  • Track conversions. Create multiple expiry warning templates and copies. Send on different timings. Monitor success rate and conversion rate. And select the best-performing sequence and template. Read more on the science of testing and tracking in our free ebook

Mistakes to avoid

  • Not highlighting app benefits. An expiry warning shouldn’t just be a warning email. Use it to pitch your premium plan. Explain the benefits. Make users realize that switching to premium is the best way to move forward.
  • Not extending the trial. What you do if users don’t convert? Don’t let them walk away just like that. Not offering trial extension is a big mistake that makes users churn. Offer an extension. Let them stay with you for a few more days. Try changing their mind during the extension period.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

Listrak analyzed email campaigns of over 950 retailers in a study to track open rates, click through rates, conversions, and revenue per email. Replenishment emails had the highest open rate (53.6%) which was the highest open rate for all the triggered email campaigns analyzed in the study. This shows the importance of sending expiry emails to users.

54%

This is an open rate of replenishment emails whic his the highest in comparison with other email types.


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 6, 2019

Send Usage Overview

4. Revenue  >  Send Usage Overview

Send usage overview to reduce SaaS churn

Increasing free to paid conversions gets easier when you regularly remind users about the benefits they are getting on real examples from their experience. Usage overview emails and in-app prompts keep users motivated for conversion.

●●● FUNCTIONALITY

Soundcloud

SoundCloud shares usage details with its users’ right in its app with a clear CTA.

Google_Drive

Google Drive has a permanent usage stat in its footer with a clear CTA.

Zendesk

Zendesk sends purely informative usage overview emails that motivate users to use more of their app.

How to use the technique

  • Send timely reminders. Create an email sequence based on usage details. Personalize reminders. Use data from buyer personas for personalization. Our free churn optimization framework will show you how to do it practically.
  • Use in-app notifications. Emails aren’t enough, send in-app notifications on usage details. Show expiration date and time so users don’t churn unintentionally.
  • Add a CTA. A clear call to action in the email to upgrade the plan is an absolute must. Usage overview without a CTA won’t tell users what they're supposed to do next.
  • Send usage tips. Tell users how they can use remaining free resources. Send actionable tips with the benefits of using more. If they will keep using it, they won’t churn and will be more likely to convert to a paid plan.
  • Show how to upgrade to remove limitations. Usage overview emails and notifications should have clear instructions on how to upgrade to use the software without any capacity restrictions.
  • Track conversions. It is all about converting free users to customers. Implement a tracking code to measure the impact of individual emails and notifications on conversions. Here is a free resource to learn more about our approach to research & tracking.

Mistakes to avoid

  • Overdoing it. Sending too many usage tips and overview notifications isn’t recommended. Don’t spam. Send notifications on regular intervals (after a couple of days).
  • Not persuading to upgrade. The whole purpose of sending usage over is to motivate users to convert. Share usage details with a strong CTA to persuade users to convert.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

Harvard published an article where they argued that the more a user uses free service, the more likely one is to convert to premium. Sending usage details with an intention to persuade users to use more service (because they're getting it free) and to let them know of expiration (if they're already enjoying it) will improve conversions.

$0

According to Harvard's Research, thhe more a user uses free service, the more likely one is to convert to premium. So don't be greedy!


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.

May 6, 2019

Set The Right Limitations

4. Revenue  >  Set The Right Product Limitations

Set the right product limitations to reduce SaaS churn

Offering limited features to free users is a smart technique to motivate users to switch to a premium plan. Carefully selecting and setting the right limitations will significantly improve free trial to paid conversions and will reduce churn.

●●● FUNCTIONALITY

Mailchimp

MailChimp smartly put limits on free users. Their core feature (autoresponder) is fully available to free users but they don’t get access to add-on features.

Selz

Selz makes it absolutely clear what a user will miss in each plan. Even premium plans come with limitations which keeps users motivated to move to the next plan.

Zapier

Zapier clearly distinguishes between free and premium plan. Users get to know what they will miss with the free plan.

How to use the technique

  • Choose appropriate limitations. Should you limit features, output, usage, capacity, or something else? This should be linked to customer lifecycle and buyer persona. Let them solve their big problem with your app but with restrictions. This will motivate them to convert and will reduce churn. Read more in our free churn optimization framework.
  • Decide what features to offer free users. Of course, you can offer all the features but do apply restrictions (such as time) so as to motivate users. Else, they will stick with free plan forever.
  • Differentiate premium from the free plan. There should be a clear and significant difference between premium and freemium. It should be evident.
  • Limited support. Use it with care. Limited support doesn’t mean not responding to the queries of free users. Use limited support as a differentiator to persuade them to convert.
  • Tell users what they're missing. Send emails. Send in-app notifications. Use powerful CTAs to show them how they can get what they're missing.
  • Make conversion easy. Keep conversion straightforward. Allow users to upgrade their plan with one-click. This works best to reduce churn and increase conversions.
  • Track conversions. Measure performance and conversion rate. Tweak limitations for comparison. Do users become paid customers? Read our free guide to learn everything about testing and tracking.

Mistakes to avoid

  • Not setting limits at all. This can prove to be suicidal for your business. If there aren’t any limits and free users can enjoy your app without any restrictions, they won’t convert. There has to be something missing to motivate them.
  • Limiting the core feature. Don’t limit the core feature of your app. Let users fully explore your app’s primary feature. It is best to partially limit the core feature.

FREE PDF

Learn our step-by-step churn optimization process

We use this exact framework to get solid returns for Foundkit clients.

LEARN MORE & DOWNLOAD


Research evidence

Vineet Kumar published an article in Harvard Business Review where he discussed how to make freemium work for your business. The purpose of a freemium plan is to get new users. It should be clear upfront what is be free and how you'll motivate free users to buy a premium plan. Make users understand your premium offer and differentiate it from freemium.

Free

Make it clear upfront what is free and what isn't to maximalize your conversion and cut down churn. It's always good to set-up expectations


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

Download a PDF with an exact process we use with our SaaS clients to research, define optimization opportunities and test.