Eliminate Free Trial Abuse by Understanding Your Value

free trial abuse points are value points 300x210 Eliminate Free Trial Abuse by Understanding Your ValueAccording to Wired, next month at the Black Hat conference in Las Vegas, a security research duo will demonstrate how they built a Money-mining botnet on online application-hosting services – perhaps like Amazon Web Services, Heroku, or Cloudbees – using only Free Trials and Freemium accounts.

Cue the overly-dramatic sky-is-falling music as we mourn the demise of SaaS Free Trials and Freemium (remember, those uses of “free” are very different).

I know a lot of entrepreneurs, founders, executives, and product marketers at SaaS and Cloud companies will read that Wired article and say to me – since I’ve been quite vocal about not being a fan of requiring a Credit Card to get started on a Free Trial – “See Lincoln… not having a credit card wall opens up our system to abuse!”

But they’re wrong… and here’s why.

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SaaS Free Trial Extension Requests are a Bad Sign

free trial expired extension SaaS Free Trial Extension Requests are a Bad SignI got this question about SaaS Free Trial Extension requests and I thought I’d answer it here, for all to see.

“Lincoln, that was a great guest post by Steli Efti from Close.io on sales mistakes that lead to churn. I was reading Steli’s blog and found a recent post where he says “short trials + liberal extensions” is the way to go. While you haven’t covered this directly (unless I missed it), it struck me as something you’d likely have an opinion on. I’m confused… who’s right?”

I’m right, obviously. [End of Article]

No, actually, I think we’re both right, but my view on this is from a slightly different angle.

I agree that if someone asks for an extension you should probably give it to them.

However, I see the fact  that they asked for the extension in the first place as an indicator that there’s a deeper problem, this request is a symptom of that problem, and the request itself as an opportunity to engage and learn what we can do to solve that problem.

Don’t worry; I go into great detail on why I think that, how to treat the symptoms, and how to eliminate the underlying problems.

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The Best SaaS Free Trial Length

best free trial length 300x296 The Best SaaS Free Trial LengthHere’s a secret no one talks about: SaaS Free Trial Length is a Marketing Gimmick.

There isn’t a best SaaS Free Trial length that works for every SaaS company, in every category, for every market. I know, that contradicts my reputation for saying “always do this” or “always do that” but that’s the way it is; the only best Free Trial length is whats best for your current situation.

For instance, I helped a company via Clarity the other day that has a 7-day free trial. In the context of their current situation – offering / market / customer / value prop / speed of value recognition by customers / etc. – a 7-day free trial seemed to make the most sense. Sure, they had 99 problems, but Free Trial length wasn’t one of them.

But there is something I want you to always do … and that’s to think before putting up a Credit Card wall, developing your Pricing Strategy, or coming up with a Free Trial strategy – including choosing the length of the trial.

This article will help you avoid picking a Free Trial length at random, will help you understand why doing that is a bad idea, including why you should understand your customers, the market, expectations, how your value prop and competition will influence your prospects view of the trial length you selected for your product, and much more.

Here we go…

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Ideal Customer Profile Framework

ideal customer profile 300x300 Ideal Customer Profile FrameworkI can’t over-emphasize how important it is to have a clear definition of your Ideal Customer.

Your Ideal Customer Profile dictates (or should dictate) everything from the features and functionality of the SaaS product you build, to the words you use and the emotion you invoke or tap into in your marketing.

I think people forget that you actually get to choose your customers. You get to choose who you want to do business with. So creating an Ideal Customer Profile isn’t limiting… it’s empowering!

In fact, if you don’t choose who you want to do business with, your customers will choose you… and they may very well be less-than-Ideal.

There are obviously lots of ways to come up with your Ideal Customer Profile, lots of methods and templates and canvases… but over time I’ve developed this very framework that works well for me. And I continue to evolve it. When I do, I will update this post.

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4 Sales Mistakes That Lead To High SaaS Churn

steli efti close io 235x300 4 Sales Mistakes That Lead To High SaaS ChurnI’ve said many times that the seeds of churn are planted early. Whether it’s in your marketing – both the things you say but also the types of customers you target with your messaging and outreach – to the things you say and do during the sales process, you could be acquiring customers that already have one foot out the door.

Because this issue is so important and really can’t be talked about enough, when my friend Steli Efti – CEO of Close.io - reached out and offered to share these four sales mistakes that lead to high churn, I was thrilled.

Be sure to check out the Afterword  below Steli’s article where I share some articles and resources that will help you further refine your Ideal Customer and reduce churn.

Okay, without any further ado… here’s Steli…

Four Sales Mistakes That Lead To High Churn for SaaS Companies

Churn is the biggest threat to sustainable SaaS growth. Sales teams often aggressively close deals because of myopic focus on immediate growth. What they fail to recognize are the long-term implications of short term focused selling to the business.

Here’s how to avoid the 4 most common sales mistakes that lead to high churn in SaaS.

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SaaS Free Trial: Requiring a Credit Card is Shortsighted

barbed wire 300x200 SaaS Free Trial: Requiring a Credit Card is ShortsightedI got this email asking whether to require a Credit Card to start a SaaS Free Trial or not and what the best Free Trial length is.

So instead of just answering him directly, I decide to use it as the basis for this article.

Here’s the email:

Hey Lincoln, some dude told me to ask for a credit card up front with a free trial instead of the Freemium model I’m currently using. Just as your site says…customers psychologically get used to NOT paying with my freemium model and its a disaster.

However, your articles strongly suggest NOT to ask for the CC upfront for free trials as that dude suggests.

My plan was ask for CC upfront for a 7 day trial. Do you still advise against this plan? Reason I ask is your article is over two years old…so not sure if the market changed etc.

Here’s my response…

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5 Steps to Unstick Your Stuck SaaS Onboarding Flow

unstick your onboarding flow 300x191 5 Steps to Unstick Your Stuck SaaS Onboarding FlowThe other day I got an email from a SaaS CEO friend of mine telling me his product team is finally ready to tackle a major problem with their onboarding flow during their Free Trial.

It turns out they have one screen in the flow that is causing them big problems.

And in this case, a “big problem” is that prospects entering their Free Trial would, at some point, hit that screen and leave… never to be heard from again!

Yeah, that’s kind of a big problem.

Now, as you can imagine, this screen happens to be a very important piece of the onboarding process, meaning prospects or new customers can’t skip it, and changing it will take significant engineering resources (not just the screen itself, but all the stuff going on behind it).

That’s how screens like this get to be, well, screens like this, right?

This SaaS vendor has basically tackled all the low-hanging fruit around this screen, which means this screen sticks out like a massive sore thumb even more.

So, it’s time to make a change and unstick that stuck onboarding flow.

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Customer Success: The Definitive Guide

Screen Shot 2014 03 29 at 12.33.57 AM Customer Success: The Definitive GuideMy original definition of the SaaS Business Model, published way back in 2009, included a tight-coupling of Core Product/Intellectual Property, Marketing, Revenue Model, and Network Centricity… but now I’m modifying the definition to include Customer Success.

Having worked with over 300 SaaS companies – as well as Enterprise Software vendors migrating to SaaS – I can say without a doubt that Customer Success must be a fully-integrated, tightly-coupled component of a complete SaaS Business Architecture.

Why? Simply put: No Customer Success = No Your Success.

Before you go any further, if you need external, third-party validation that Customer Success is critical to the growth of SaaS businesses, download this report by Forrester. Make sure your CEO and other executives see it:

executive primer to customer success Customer Success: The Definitive Guide

The reality is “Customers for Life” don’t happen because of long contracts and technical lock-in like the “good old days” of Enterprise Software.

Nope… today, Customer Success is the new “vendor lock-in” … you make sure your customers are successful and they’ll make sure you’re successful. It’s a Win-Win!

This cannot be overstated… if your customers are not achieving “success” with your SaaS, your success is at risk.

Of course, what “success” looks like for your customers is 100% unique to your customers in the context of your product. So while there’s not a one-size-fits-all definition of lower-case customer success – that’s up to you to know – as far as the concept of upper-case Customer Success is concerned, I’ve attempted to define that for you.

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