Reasonable SaaS Free Trial Conversion Rate

Reasonable Free Trial Conversion RateWhat’s a reasonable conversion rate from free trial to a paid customer?

I get some form of this question from time to time and I’ve answered it several times over the years.

Well, I got it again so it’s time to revisit this very simple question.

As with most “simple questions” the question is easy to ask; the answer, however, is anything but easy to give.

But I tried and here’s my response that I thought you’d benefit from, too.

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Acceptable Churn Rate for Small Accounts

acceptable-churn-rate-small-accountsWhat drives a company to focus on Customer Success is changing. In the past, churn (or retention, depending upon how you look at things) was generally the catalyst.

Once churn is under control, the catalyst changes to expansion; driving use, consumption, and revenue within existing accounts.

And these days, startups are building Customer Success into their DNA from the ground up, understanding that an acquire-any-customer-at-all-costs-until-churn-is-a-major-problem go-to-market strategy is the wrong way to do things and are avoiding that unnecessary step in the startup lifecycle.

That said, churn is still a problem for some companies, so when I answered this email about different churn rates across customer segments, I thought I’d share the answer with you, too, so we can all benefit.

Here’s the email…

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Success is Uncomfortable

Customer Success WorkshopI’ve talked before about holding customers accountable and how customer success isn’t about making customers happy.

Sometimes you have to push customers out of their comfort zone and – if you’ll allow me to channel my inner Tony Robbins -progress is rarely made within our comfort zone

That means moving toward success – whether for us or for our customers – is not always comfortable.

In fact, success is often quite uncomfortable.

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The Risk (and Opportunity) in Stealing Customers


Picture it, São Paulo, Brazil, October 2015.

After one of the sales and customer success workshops I did, a few of us went out for a snack – fried polenta sticks – and to talk shop… and the idea of Success Gaps came up.

In particular, we talked about prospects that experienced Success Gaps with your competitor’s product because “it didn’t do what they needed it to do” and are interested in your product, but your product is – if you’re honest – fairly similar to the other guys.

So is it awesome that they want to switch and you should celebrate that you’re stealing your competitor’s customers… or is it a huge red flag?

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A Foolproof Way to Get Testimonials Without Asking for Them

A Foolproof Way to Get Testimonials Without Asking for ThemPersonally, I’ve always found it difficult to ask for testimonials. It just doesn’t come naturally to me.

In fact, one of the reasons I like doing calls on Clarity is that the platform closes the loop with the client for me, asking for a star rating and optional comments; to me, that part alone is worth 15% of the revenue from those calls. It’s operationalized and I don’t have to think about it.

But that’s just for Clarity calls; outside of that system, I’m back to square one… asking for a testimonial.

And of course, my clients are pretty much in that same boat, too. Some people are better at it than others, but asking for a testimonial is not always the easiest thing to do. It’s especially difficult when you just do it in a haphazard way… which results in doing it even less often and then,… not at all.

That’s why you should operationalize the process. But I’ll be honest, even if you have a strong system in place, if there’s still a human involved – on either end – the process becomes a bit bumpy.

I suppose you could just wait and hope testimonials roll in organically, but that seems like a bad idea.

Luckily I’ve got a foolproof way of getting testimonials.

In fact, the other day I was talking to some folks at a well-known search optimization software vendor about Customer Success at a high level when this very tactical question came up; how to get testimonials.

We were talking about how Customer Success leads to increased customer advocacy – and we know social proof is extremely valuable (if you do it right) – but these high-level discussions get derailed when you’ve run into low-level tactical issues in the past.

Well, like I said I’ve got this great way to get testimonials, but I assumed what I knew about this was what everyone else knew… but I was wrong.

Once I told them how to get testimonials without asking for them, I could sense that perhaps I knew something they didn’t. Perhaps this technique I use all the time with super-awesome results wasn’t as widespread as I thought.

So I decided I would share it with you… but pay close attention; there’s no TL;DR version of this and all the details matter. RT;WT (Read The: Whole Thing).

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Success Milestones and the Path to Desired Outcome

success-milestonesI talk about Success Milestones all the time, not just in the context of Customer Success, but in the context of the overall success of my SaaS clients and the companies I work with through Gainsight.

The concept of Success Milestones is a relatively simple one to grasp, but the power and the value of this way of thinking are often overlooked or misunderstood. Let’s fix that.

Since I’ve never really defined Success Milestones, what better time to do that than right now.

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Customer Accountability: Pushing Back to Drive Them Forward

customer-accountabilityA little while ago I introduced the concept of the Success Gap and how customers can use your product to the fullest and still not achieve their Desired Outcome.

And as the vendor you can either ignore the phenomenon and let customers fend for themselves and maybe not achieve the desired outcome – at which point they’ll blame you – or you can take the initiative to try to help them with a bridge for that success gap.

You can do that by bringing in experts, providing content, giving discounts on third-party courses, or building those bridges into the product.

But at some point you also need to let the customers know that they are accountable for some portion of the results.

In fact, one of the things we have to do as part of an operationalized Customer Success initiative is to tell the customer what they need to hear – not what they want to hear – so they do the right thing.

Which means we have to be realistic with our customers about what is on their plate – and what is on our plate – and who’s ultimately responsible for the success of the customer.

This is called Customer Accountability and it’s the missing piece in your Customer Success strategy.

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This Customer Acquisition Mistake Can Kill your Growth

This Customer Acquisition Mistake Can Kill your GrowthCan the customers you’re actively going after actually achieve success with your product or through their interactions with your company as things are today? If not, that’s a problem.

The reasons they might not achieve success range from their readiness (they don’t have the necessary data or internal processes to support our tool internally), technology requirements (we’re built on top of Salesforce and they don’t use Salesforce), or it could be that your product simply doesn’t have everything the customer would need to be successful.

This came up recently when I was talking with the founder and CEO of a SaaS startup on Clarity about their customer acquisition strategy and he said “agencies are our Ideal Customer.”

Then he told me that they currently lack the ability for an agency to do roll-up reporting across all their customer accounts, which, as he put it, is “a critical piece of functionality for agencies.”

I almost passed out at this point… but I gained my composure – and some oxygen – and was able to help him. The following is based on that conversation and I know it will help you, too…

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5 Terms to Avoid in Customer Success

5 Terms to Avoid in Customer SuccessUgh… isn’t dealing with customers that don’t get it and having to hold their hand along the way or check-in with them to make sure they’re okay, annoying? It’s so nice when you can hand ’em off to someone else, right?

I hear that all the time from clients, on Clarity calls, and from companies I work with through Gainsight to bring Customer Success into their organizations.

Mostly I hear things like that from people in companies with high customer churn, super-low Free Trial conversion rates, and an overall negative NRR (Net Revenue Retention), meaning there’s little or no revenue expansion happening within the existing customer base.

The latter isn’t a surprise once I hear the way the company talks about their customers, but it is avoidable.

In order for Customer Success to really work, it has to be part of the DNA; brought in by executives and adopted in every area of the company.

But the things we say can derail that.

You can operationalize around your customer’s lifecycle, create a professional CSM org, implement a state-of-the-art CSM software solution… but if you talk about you customers in a negative way, you’re probably not going to achieve the level of success you’d like. It’s that simple.

Words are powerful and to a certain extent drive our actions. If we talk smack about our customers behind the scenes, some – or maybe all – of that will come out in how you interact with them, it will influence the tools you create for them, or otherwise impact how you operationalize around their success.

So here are 5 terms to avoid in Customer Success… and no, this isn’t just semantics.

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7 Reasons to Optimize your SaaS Free Trial

7 Reasons to Optimize your SaaS Free TrialFor SaaS vendors, the Purpose of a Free Trial is to create a customer. Period.

If you don’t agree with that statement then you really won’t like pretty much everything else I’m going to say in this article.

Free Trials are not for tire-kicking freeloaders – and if that’s what you’re getting in your free trial, you may want to think about identifying your Ideal Customer Profile and getting them into your trial – because a Free Trial of a Premium product is not Freemium. It’s not a giveaway. It’s not a gift.

Those people who sign-up for your Free Trial are what we call Prospects (prospect is short for Prospective Customer) and you need to treat them that way. There is a lot of potential value stored in the prospects that signup for your Free Trial… and designed correctly, your Free Trial Strategy can unleash that value in several ways.

Let’s dive into those, shall we?

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