Who owns SaaS trial conversions?

 

Letting customers try your product before buying is becoming a standard practice.

Free trials are now more and more common. For example, we analyzed a sample of 41 Techstars SaaS companies and found that 77% of those companies offered a free trial.

Well known B2B SaaS companies like Salesforce, Zendesk, LinkedIn, and HubSpot work with this model and are defining customer expectations in the B2B world.

Free trials are popular for a reason. They are a great sales tool. They allow you to “soft sell”. They make the ask smaller. They reduce the perceived risk in the purchase decision. They are similar to the free return policy now offered by almost every retail store.

Many companies do quite poorly at optimizing free trial conversions.

We’ve always been surprised by the amount of effort put into adding more leads to the top of the funnel in comparison to how much is done to convert those leads.

Many of the companies we work with have trial conversion rates ranging from 1 to 15%. In other words, 85 to 99% of acquired leads go down the sink. Even if you assumed that 70% of those signups are not potential customers, it still leaves lots of room for improvement.

Increasing a trial conversion rate from 3% to 4% means reducing customer acquisition cost by 25%!

The free trial stage is the most complex of the customer journey.

Most stages of the customer journey have one clear owner. For example, marketing is responsible for bringing traffic to the website and converting this traffic into leads.

The free trial stage is more complex. It involves almost every department:

  • Marketing: set up email drip campaigns to guide and convert trial users, experiment with discounts and pricing.
  • Customer Success: onboard customers and coach larger accounts to become successful.
  • Sales: explain the value prop, give demos, help customers pick the right plan, negotiate contracts.
  • Product: identify friction in the product, improve product user experience, add missing features.

The lack of a dedicated owner results in sub-optimal trial conversion rate

Are you familiar with the business fable “the chicken and the pig“?

The trial stage often has lots of chickens but it rarely has an assigned pig.

Everyone has a critical role to play there but the contributions are usually tactical and of limited impact.

The best companies I have worked with assign a strong owner dedicated to optimizing this stage the same way, let’s say, a website is optimized: gather data, make hypotheses, test, learn, implement, iterate.

“Okay, okay… who should own trial conversations then?”

I have seen different configurations. Most of them depend on the type of SaaS businesses: high-volume versus  high-touch.

In high volume SaaS companies, the CMO usually owns trial conversions. Or more accurately, marketing owns the conversion of self-service leads (usually defined as signups from companies likely to buy a small plan) while sales owns the conversion of enterprise leads (signups from large companies). Marketing works closely with product to test different discounts, pricing, and plans. And they work with customer success to implement effective email drip campaigns.

In high-touch SaaS companies, the sales team assisted by the customer success team tends to own trial conversions.

Having a CRO (Chief Revenue Officer) is a new and growing trend, particularly in the Silicon Valley. The CRO oversees and “optimizes the entire customer experience with the aim of increasing revenue”.

Let me ask you the question now. In your SaaS organization, who owns trial conversions? How is it working? Share your feedback and thoughts on twitter or email!

  • Kate H

    Really interesting information, and the issue of who “owns” the free trial within the SaaS company is a unique one (and I don’t read much info about it). This led us to our own discussion on free trial conversions, which turned into Chargify’s blog post “Top 5 ways to increase free trial conversions & revenue” – https://www.chargify.com/blog/increase-free-trial-conversions/

    We didn’t touch specifically on ownership, but if you have a chance to read it I would love to hear your thoughts! Thanks for writing great content!