The stakes are high. According to recent industry data, the average SaaS free trial converts less than 25% of users to paying customers. That means roughly two-thirds to three-quarters of your trial users are walking away without ever becoming customers.

But the good news is that trial cancellations aren’t random. They follow patterns. Users drop off at predictable moments in their journey and struggle with the same features or tasks. Once you identify these patterns, you can systematically address them through trial optimization.

Understanding why trial optimization matters for reducing cancellations

Before diving into how to reduce cancellations, let’s be clear about what we mean by trial optimization and why it deserves your attention.

Trial optimization is the systematic process of improving every touchpoint in your free trial or freemium experience to increase the likelihood that users will see value, engage consistently, and ultimately convert to paying customers. It’s not about manipulation or dark patterns. It’s about removing unnecessary friction, clarifying value, and helping users succeed with your product.

The impact of effective trial optimization extends beyond conversion rates. When you optimize the trial experience, you also reduce customer acquisition costs, improve customer lifetime value, and build a stronger foundation for retention.

Understanding your specific trial model is the first step toward optimization. Different trial structures create different challenges and opportunities.

What is a freemium model?

The freemium model offers perpetual access to a restricted version of your product, either by limiting features or placing caps on usage. Think Spotify’s free tier with ads, or Canva’s basic design tools. The challenge with freemium is that users can stay indefinitely without converting. Your optimization goal is building reliance while strategically gating features that create urgency to upgrade.

What is a reverse trial?

In a reverse trial, users start with full access to all features for a limited time, then get moved to a freemium plan with limited capabilities. This approach, coined by growth leader Elena Verna, prioritizes maximum value upfront. Users experience everything your product can do, making the subsequent feature restrictions feel more pronounced. Trial optimization here focuses on ensuring users activate on premium features during that full-access window.

What is trial with payment?

This model requires payment information up front for full product access during a limited period. Users are charged automatically after the trial unless they cancel. The friction of providing credit card details means fewer signups but typically higher conversion rates, with opt-out trials converting at 49-60% compared to opt-in trials at 18-25%. Optimization here balances making signup worthwhile despite the friction while ensuring the experience justifies the automatic charge.

Five steps to audit and optimize your trial experience

Trial optimization looks different in each of these trial models, but one thing is true across the board: reducing cancellations requires a systematic approach.

You can’t fix what you don’t measure, and you can’t optimize what you don’t understand.

Here is a summary of the five-step framework for auditing your trial experience. For a detailed walkthrough, including specific templates and decision trees, see our article on auditing free user experiences.

Step 1: Identify drop-off points with data analysis

Examine your product analytics to pinpoint exactly where users abandon their trial journey.

• Track activation drop-offs in your onboarding flow
• Monitor which features users engage with versus ignore
• Calculate time-to-value and compare against churn timing
• Segment data by acquisition channel, trial type, and user cohort
• Layer in session recordings to see what users actually do before leaving

Step 2: Conduct user interviews to understand the “why”

Numbers show where users leave. Conversations reveal why.

• Interview 10-15 users, split between active trial users and those who churned
• Ask what value they found, what confused them, and what would make them pay
• Listen for the exact language they use to describe their experience
• Note any competitors or alternatives they mention for market context

Step 3: Benchmark your experience against market standards

Your users compare you to every tool they’ve used. Conduct some competitive analysis to gauge where you fall in the market.

• Document how competitors structure their trial experiences
• Screenshot monetization touchpoints, upgrade prompts, and limit notifications
• Study products your users mention in interviews, even if indirect competitors
• Identify where your experience creates more or less friction than market norms

Step 4: Map user actions with verb scoring

Break down every meaningful action in your product and score the friction required by running a verb scoring exercise.

• List discrete actions users can take (create, share, export, invite, etc.)
• Assign each a verb score from Anonymous to Gated
• Look for inconsistencies in how similar actions are gated
• Identify if you’re giving away too much or asking too soon

Step 5: Connect insights to create an optimization roadmap

Synthesize your findings to prioritize what to fix first.

• Friction without reason: unnecessary barriers compared to competitors
• Value leaks: popular free features that don’t drive conversion
• Invisible gates: paywalls users hit without understanding why
• Poorly timed friction: asking users to pay before they’ve seen value

Prioritize optimizations by impact (users affected), confidence (data supports it), effort (time to implement), and market alignment (are you an outlier).

Six strategies for reducing trial cancellations

Once you’ve audited your trial experience and identified optimization opportunities, you will have a clear roadmap for addressing issues.

Plenty of strategies might arise in your research. Here are a few themes we see often.

Accelerate time-to-first-value

The faster users experience value, the less likely they are to cancel. Industry benchmarks suggest that users should reach their first “aha moment” within 48 hours of signup.

Design your onboarding to guide users directly toward the action that delivers value. Use progress bars and checklists to create clear paths forward.

Remove any friction between signup and first value. If users need to integrate other tools, fill out profiles, or configure settings before experiencing core benefits, you’re creating opportunities for abandonment. Save non-essential setup for after users have seen value.

Provide personalized onboarding experiences

Companies using personalized experiences see conversion rates improve by up to 67%. Generic onboarding treats all users the same, but different user segments have different needs, different technical sophistication, and different use cases.

Segment users based on their role, company size, or stated goals during signup. A solo entrepreneur using your project management tool has different needs than a project manager at a 100-person company. Your onboarding should reflect these differences.

Use progressive disclosure to reveal features as they become relevant. Don’t overwhelm new users with every capability on day one. Instead, introduce advanced features once users have mastered the basics.

Implement strategic reminder systems

Trials between 7-14 days convert better than longer trials because they create urgency. But urgency only works if users remember they’re on a trial.

Send regular emails and in-app notifications informing users about remaining trial time. These reminders should do more than count down days. Each one should emphasize value, highlight features users haven’t explored, or address specific pain points.

Gate features strategically based on usage patterns

In our experience optimizing for SaaS, offering too many free features can actually hurt conversion rates. Users need to experience value from free features while simultaneously understanding what they’re missing from paid capabilities.

Place prompts for premium features adjacent to free ones. PDF Converter, for example, offers free file conversion but positions the premium, higher-quality option nearby. This ensures users understand the upgrade path without being pushy.

Use clear visual cues like lock icons, “Pro” badges, or color contrasts to differentiate free from paid features.

Provide proactive support during critical moments

Customer support engagement during trial periods can significantly boost conversion rates.

Don’t wait for users to ask for help. Implement triggered messages based on behavior patterns. If a user hasn’t logged in for three days, send a helpful email with tips. If someone tries to use a gated feature multiple times, offer a personalized demo or support call.

For high-value potential customers, consider human touchpoints. A quick call from customer success at day three of a 14-day trial can answer questions, provide personalized guidance, and significantly increase conversion likelihood.

Design thoughtful cancellation flows

Not every cancellation is preventable, but many are. When users attempt to cancel, use that moment as an opportunity to understand why and potentially offer alternatives.

Implement exit surveys that capture cancellation reasons. According to data on subscription churn, understanding why users leave is critical for preventing future cancellations. Are they leaving because of the price? Missing features? Poor onboarding? Bugs?

Based on cancellation reasons, offer segment-specific alternatives. If someone is canceling due to price, offer a discount or payment plan. If they barely used the product after the trial, extend the trial. If they’re leaving due to missing features, ask which features would keep them.

Common mistakes that increase trial cancellations

Even well-intentioned optimization efforts can backfire. Avoid these common mistakes that actually increase cancellation rates.

Making cancellation difficult

Some SaaS companies deliberately make cancellation difficult, requiring users to call or email rather than cancel with a simple click. This dark pattern might delay cancellations temporarily, but it can destroy trust and create negative word-of-mouth.

Make cancellation simple. The goal isn’t to trap users; it’s to create such a good experience that they don’t want to leave.

Gating core value too aggressively

If users can’t experience your product’s core value without upgrading, they’ll cancel before converting. The free version should deliver genuine utility while creating a desire for premium features.

Neglecting mobile trial experiences

With increasing mobile usage, trial experiences must work seamlessly across devices.

If your onboarding is desktop-optimized but breaks on mobile, you’re creating cancellations for a substantial user segment.

Sending generic email communications

Automated email sequences that ignore user behavior feel impersonal and often go unread. According to research on trial optimization, personalized communication based on user activity significantly outperforms generic campaigns.

If a user hasn’t logged in since signing up, an email about advanced features is irrelevant. If they’re actively using the product daily, countdown reminders may feel pushy. Segment communications based on engagement levels.

Trial optimization frequently asked questions

What’s the ideal trial length to minimize cancellations?

The optimal length depends on your product’s complexity and how quickly users can experience value. Simple products often perform better with 7-14 day trials that create urgency.

Complex B2B tools may need 30-60 days for users to properly evaluate capabilities. If you are completely lost, start with 14 days and adjust based on your activation data and time-to-value metrics.

Should I require a credit card for trial signup?

This decision significantly impacts both signup volume and conversion rates.

Opt-out trials (credit card required) convert higher but generate fewer signups. Opt-in trials (no credit card) convert lower but attract more users.

The right choice depends on whether you prioritize higher conversion rates per trial or a larger volume of trials and how much more utility the full tier offers versus a free trial.

Most product-led companies start with opt-in trials to maximize exposure, then consider opt-out trials once they’ve optimized the trial experience.

How can I tell if my trial cancellations are normal or problematic?

Track cohort-specific metrics. If certain user segments, acquisition channels, or trial lengths show notably different cancellation patterns, those differences reveal opportunities for targeted optimization.

What’s the most important metric to track for trial optimization?

While trial-to-paid conversion rate matters, activation rate is often more predictive.

Activation measures whether users complete key actions that indicate they’ve experienced value. Research shows users who reach activation are significantly more likely to convert.

Define your activation criteria based on behaviors that correlate with conversion, then optimize to increase the percentage of trial users who activate.

How often should I test and iterate on my trial experience?

Trial optimization is continuous, not a one-time project.

High-performing SaaS companies test constantly. Start with your highest-impact opportunities identified during your audit, then implement a regular testing cadence.

Track results for statistical significance before making changes permanent. Plan quarterly reviews of your trial metrics to identify new optimization opportunities as your product and market evolve.

Can I reduce trial cancellations without changing my product?

Yes. Many cancellations stem from poor onboarding, unclear value communication, or inadequate support rather than product deficiencies.

You can significantly reduce cancellations by improving onboarding sequences, providing better in-app guidance, personalizing the trial experience, implementing proactive support, and strategically positioning upgrade prompts.

That said, if users consistently cancel, citing missing features or bugs, product improvements may be necessary alongside trial optimization.

Build a systematic approach to trial optimization

Reducing SaaS trial cancellations isn’t about quick fixes or growth hacks. It requires systematic analysis of your trial experience, a deep understanding of user behavior and needs, and continuous optimization based on data.

The five-step audit framework provides a structured approach: analyze data to find drop-off points, interview users to understand why they leave, benchmark against market expectations, map actions with verb scoring, and synthesize insights into a prioritized roadmap. Each step builds on the previous one to create a picture of optimization opportunities.

Implementation matters as much as analysis. Accelerate time-to-value, personalize onboarding, implement strategic reminders, gate features based on usage patterns, provide proactive support, and design thoughtful cancellation flows. These six strategies address the most common causes of trial cancellations, but keep in mind that your analysis will likely surface other unique issues.

Most importantly, treat trial optimization as an ongoing discipline rather than a one-time project. User expectations evolve, competitors improve their experiences, and your product adds features. Regular review and iteration ensure your trial experience continues performing as your business grows.

At The Good, we’ve helped SaaS companies reduce trial cancellations and improve conversion rates through our Digital Experience Optimization Program. We conduct comprehensive audits using heatmaps, session recordings, and user research to identify exactly where trial users encounter friction. Then we build custom optimization roadmaps and validate improvements through experimentation.

Ready to reduce your trial cancellations and accelerate growth? Schedule an introductory call to discuss how we can optimize your trial experience for better conversion and retention.

The post How Do You Reduce Cancellations During SaaS Free Trials? appeared first on The Good.

We dove deep into the user experiences of 15 top AI tools, documenting over 100 monetization touchpoints, upgrade pathways, and conversion tactics. What we found were five distinct patterns that drive revenue for these leaders.

These strategies aren’t just for AI. They’re blueprints that any SaaS tool can adapt to accelerate its own growth. Here’s what we learned.

The data behind the patterns

Our analysis covered tools spanning text generation (ChatGPT, Claude), search (Perplexity), design (Ideogram, Leonardo.AI), video creation (Runway), and productivity (Grammarly, QuillBot). Each tool was examined across four critical areas:

• Monetization elements: Upgrade CTAs, limit notifications, premium feature gates, and more
• Monetization pathways: The specific user journeys from free to paid
• Pricing and payment screens: Where users actually convert when they decide to upgrade
• Missed opportunities: Places where tools could be driving more conversions

What emerged were five clear patterns that high-converting tools use consistently.

Pattern #1: The progressive squeeze

The strategy: Start with subtle hints, then gradually increase conversion prompts as users become more invested.

Who’s doing it: Claude, ChatGPT, and Perplexity have mastered this approach.

How it works: These tools begin with gentle upgrade suggestions embedded in the interface. A small CTA in the sidebar, a mention of plan limits in account settings. As users engage more, the messaging becomes increasingly direct.

Claude exemplifies this perfectly. New users see a subtle “Free plan” indicator and a small upgrade CTA. After several conversations, users get friendly notifications about approaching limits. Only when limits are actually hit does Claude present the strong upgrade push with clear urgency messaging.

ChatGPT follows a similar pattern but with more touchpoints. Multiple upgrade opportunities appear once logged in, but the real conversion push happens when users try to upload files or access advanced features.

Why it converts: Users invest time and mental energy before hitting any hard walls. By the time they reach limits, they’re already committed to the tool and see clear value in upgrading rather than switching to alternatives.

The missed opportunity: Many tools go straight to hard limits without the progressive buildup, losing users who might have converted with a gentler approach.

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How Top AI Tools Turn Free Users Into Paying Customers

Pattern #2: The feature tease

The strategy: Show users exactly what they’re missing by displaying premium features prominently, then gating access.

Who’s doing it: Ideogram, Grammarly, and Leonardo.AI excel at this approach.

How it works: These tools don’t hide their premium features. Instead, they showcase them prominently with visual cues like lock icons, blurred previews, or “Pro” badges. Users can see the feature, understand its value, and often interact with locked elements that trigger upgrade modals.

Ideogram shows locked features upfront on the dashboard, displays private galleries as gated sections, and lets users click through to see upgrade benefits. When users generate images, editing options appear with clear visual indicators of which features require upgrading.

Grammarly shows blurred premium suggestions alongside free ones, lets users see statistics with tone analysis grayed out, and provides partial feature previews that create curiosity about the full experience.

Why it converts: Curiosity combined with FOMO creates powerful motivation. When users can see exactly what they’re missing and how it would solve their problems, the upgrade decision becomes much easier.

Implementation tip: The key is showing enough value to create desire while maintaining a clear visual hierarchy between free and premium features.

Pattern #3: The moment of need

The strategy: Present upgrade options precisely when users are most invested and would benefit most from premium features.

Who’s doing it: Runway, QuillBot, and Character.AI time their conversion prompts perfectly.

How it works: Instead of generic upgrade CTAs, these tools interrupt workflows at strategic moments when users are actively trying to accomplish something and would most benefit from premium features.

Runway waits until users want to export in 4K resolution or remove watermarks, both of which are moments when they’re already committed to using the generated content.

QuillBot triggers upgrade prompts when users hit word limits mid-task, not during idle browsing.

Why it converts: Perfect timing equals the highest conversion rates. When users are already invested in a task and premium features would immediately solve their problem, the upgrade becomes a logical next step rather than an interruption.

The psychology: This taps into the completion bias. Once users start a task, they’re motivated to finish it, making them more likely to pay to remove obstacles.

Pattern #4: The transparent countdown

The strategy: Create urgency and build trust by clearly showing usage limits, remaining credits, and reset timers.

Who’s doing it: Perplexity, Grammarly, and Copy.AI have perfected transparent limit communication.

How it works: Instead of surprising users with sudden limits, these tools constantly communicate remaining usage through progress bars, countdown timers, and clear messaging about when limits reset.

Perplexity shows “2 queries remaining today” with each search, giving users clear visibility into their usage without anxiety.

Grammarly displays credit counts and refill timers for AI features, so users can plan their usage accordingly.

Copy.AI uses a prominent word count progress bar that updates in real-time, showing exactly how much of their monthly limit has been used.

Why it converts: Transparency builds trust while creating healthy urgency. Users appreciate knowing where they stand and can make informed decisions about when to upgrade rather than feeling tricked by hidden limits.

The trust factor: When users trust that limits are fair and clearly communicated, they’re more likely to see upgrading as a reasonable business transaction rather than being forced into paying.

Pattern #5: The omnipresent nudge

The strategy: Place multiple upgrade touchpoints throughout the interface without being intrusive.

Who’s doing it: ChatGPT, QuillBot, and Ideogram have mastered multi-touchpoint conversion.

How it works: These tools strategically place upgrade opportunities at different points in the user journey, including header CTAs, sidebar reminders, settings page options, and feature-specific prompts. The key is making each touchpoint feel contextual rather than repetitive.

ChatGPT places upgrade CTAs in the dropdown menu, file upload tooltips, model selection interfaces, and account settings. Each serves a different user intent and provides value beyond just asking for payment.

QuillBot integrates upgrade opportunities into the workflow, for example, in premium mode selectors, feature benefit explanations, and contextual prompts that feel helpful rather than pushy.

Why it converts: Repetition without annoyance increases recall and provides multiple chances to convert users at different readiness levels. Some users need to see upgrade options multiple times before they’re ready to act.

The balance: The key is ensuring each touchpoint provides value or information, rather than simply asking for money repeatedly.

The standout performers

While all 15 tools showed growth-focused design, three stood out for their sophisticated monetization strategies:

Claude excels at the Progressive Squeeze, building user investment before presenting upgrade opportunities. Their limit messaging feels helpful rather than restrictive, and the upgrade pathway is seamless.

Ideogram masters the Feature Tease, showcasing premium capabilities so effectively that users understand the upgrade value before reaching any limits. Their visual hierarchy makes premium features aspirational rather than frustrating.

Perplexity nails the Transparent Countdown, creating urgency without anxiety through clear limit communication and value-focused messaging.

Common missed opportunities

Our analysis revealed several patterns where even successful tools leave money on the table:

• Timing failures: Many tools show upgrade prompts during onboarding when users haven’t yet experienced value, rather than waiting for engagement.
• Value communication gaps: Some tools gate features without clearly explaining the benefits, leading to confusion rather than desire.
• Conversion pathway friction: Several tools send users to generic pricing pages rather than contextual upgrade flows that maintain momentum.
• Limit surprises: Tools that suddenly cut off functionality without warning create frustration rather than conversion motivation.

Applying these patterns to your SaaS growth strategies

These AI growth strategies aren’t limited to AI tools. The underlying principles work for any SaaS looking to improve free-to-paid conversion:

Start with your user journey mapping

Identify key moments where users experience value and where they encounter limitations. These are your conversion opportunity points.

Audit your current upgrade messaging

Are you using the Progressive Squeeze, or do you jump straight to hard limits? Are you showing users what they’re missing with Feature Teasing?

Review your limit of communication

Do users understand their usage limits, and when they reset? Transparent Countdown reduces churn and builds trust.

Optimize your touchpoint strategy

Map where upgrade CTAs appear in your interface and ensure each serves a specific user need rather than just asking for payment.

Test your conversion timing

Are you presenting upgrade options when users are most invested (Moment of Need) or just when it’s convenient for your UI?

What does this mean for your growth strategy?

AI tools are teaching us that successful monetization isn’t always about restricting features; it can be about showcasing value, building trust, and timing conversion opportunities perfectly. The tools growing fastest aren’t necessarily those with the best AI models, but those with the smartest user experience design.

These patterns work because they align business needs with user psychology. Instead of seeing limits as barriers, users experience them as natural progression points toward greater value.

The AI boom provides a unique laboratory for studying growth tactics at scale. These tools process millions of users and can iterate rapidly, revealing what actually drives conversions versus what we think should work.

As AI capabilities become more commoditized, user experience (including monetization design) becomes the key differentiator. The tools implementing these patterns now are building sustainable competitive advantages that will persist even as the underlying technology evolves.

Taking action on these insights

The most successful SaaS companies will adapt these AI growth strategies to their own products before their competitors catch on. Start by analyzing your current monetization approach against these five patterns:

1. Map your user journey to identify Progressive Squeeze opportunities
2. Audit your feature visibility to implement Feature Teasing where appropriate
3. Review your limit of communication to adopt Transparent Countdown principles
4. Time your conversion prompts to leverage the Moment of Need psychology
5. Optimize your touchpoint strategy using Omnipresent Nudge best practices

The data from these 15 AI tools provides a roadmap, but implementation requires careful testing and optimization for your specific user base and value proposition.

Ready to apply these AI growth strategies to accelerate your SaaS growth? The Good specializes in analyzing user experiences and implementing conversion optimization strategies that turn insights into revenue. Our team has helped dozens of SaaS companies optimize their monetization flows using data-driven approaches just like this analysis.

Get your personalized monetization strategy audit. We’ll analyze your current user experience against these proven patterns and create a prioritized optimization roadmap tailored to your product and audience. Schedule a consultation with our team to discover how these AI growth strategies can accelerate your revenue growth.

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How Top AI Tools Turn Free Users Into Paying Customers

The post 5 SaaS Growth Strategies That Work (Based On Analysis Of 15 Top AI Tools) appeared first on The Good.

But over many years of working with SaaS teams, there is something counterintuitive we’ve learned about this approach.

The companies that scale fastest aren’t always the ones acquiring the most users. They’re often the ones who build monetization strategies that focus on their existing user base. As users find more value in the tool and increase usage, the tool’s pricing fluctuates accordingly.

Realistically, every SaaS tool will hit a growth plateau. There aren’t infinite users that will find value in your product, even though we all wish there were.

The goal is to build growth into your monetization strategies so you don’t leave any untapped revenue in your existing user base. This ensures you don’t reach a premature growth plateau once net new users become stagnant.

The fundamental shift in monetization strategy from seats to value

Before we get started, throw your traditional SaaS monetization playbook out the window.

For years, companies have relied on seat-based pricing because it made sense. With each new hire, a new account or seat was purchased for tools. Revenue grew linearly with team size.

But now one person can do the work of two or three people. AI tools, automation, and productivity software mean that the relationship between users and value creation has completely shifted. When your customers can accomplish twice as much with half the team, seat-based pricing isn’t sustainable.

Smart companies are pivoting to value-based extraction. Instead of charging for the number of people using your software, they charge for the value you create. This isn’t just about switching to usage-based pricing; it’s about fundamentally rethinking how you capture the value your product delivers.

Consider HubSpot’s evolution. Instead of sticking to their standard seat-based pricing model as the market has evolved, they’ve created a dynamic pricing system. Users can pay for seats at their specific account tier, but also have a layer of contact-based pricing, aligning cost with the actual value delivered rather than just the number of users.

They’ve also recently added token-based pricing for certain functions in the tool, like marketing email sends, AI features, and API calls. These changes allow them to maintain revenue growth even as customers reduce their seat count.

You’re trying to capture more of the consumer surplus

Most SaaS tools have a consumer surplus. There are features or outcomes that customers would pay more for, but don’t have to because of your pricing model.

You can never eliminate all surplus (you need happy customers), but you can likely capture more of it through strategic segmentation and value extraction.

Think about your demand curve. It’s not a straight line. It’s a complex slope that varies by customer segment, use case, and willingness to pay. Most companies set one or two price points and leave massive value on the table. The companies that scale create multiple packages along that curve.

Netflix understood this when it evolved from a single $7.99 plan to Basic, Standard, and Premium tiers. Each tier captures different segments of willingness to pay while allowing customers to self-select into the option that works for them. However, the real insight wasn’t in the tiers themselves, but rather an understanding that different customer segments valued different features. Knowing that allowed Netflix to extract more value from customers who were willing to pay more while keeping price-sensitive customers from defecting.

Research changes everything

To get started on a monetization strategy based on value and capture more of the consumer surplus, companies have to build their understanding of what customers are willing to pay for.

Research from monetization and pricing expert Madhavan Ramanujam says that 20% of features drive 80% of willingness to pay. The challenge is to make sure you aren’t over-indexing on features that customers don’t actually value while underdeveloping the ones that drive revenue.

The solution is systematic research that reveals what customers actually want to pay for. Here are three methods to make it happen:

Max diff analysis: Present customers with feature lists and ask them to identify the most and least important items. With enough volume, you can rank features by their impact on willingness to pay. Features that over 50% of customers want become your “leader” features or the core value proposition that justifies your price point.

Anchoring questions: Instead of asking customers what they’d pay (which doesn’t work), ask them to compare your value to a known competitor. “If Salesforce brings your team 100 points of value, where do we rank?” This gives you relative value positioning without the discomfort of direct pricing questions.

Van Westendorp pricing: Ask customers four questions about price sensitivity: What’s acceptable? What’s expensive but you’d consider it? What’s so expensive that you wouldn’t consider it? What’s so cheap that you’d question the quality? This reveals the psychological price boundaries for different customer segments, providing a window of tenable prices that capture both the price-sensitive and high-willingness-to-pay corners of the market.

The Shopify monetization strategy: how to scale with your customers

An innovative and extremely effective monetization strategy allows you to grow with your customers. Shopify cracked this code by creating a model where their revenue increases as their customers become more successful. Instead of charging an ever-larger flat monthly fee, they take a percentage of gross merchandise volume (GMV).

This creates a virtuous cycle: Shopify is incentivized to help their customers succeed because customer success directly translates to revenue growth. When a merchant goes from $10,000 to $100,000 in monthly sales, Shopify’s revenue from that customer increases 10x.

Smaller businesses benefit from a proportional cost as they get started, and if businesses leave once they grow, Shopify doesn’t mind.

Shopify actually optimizes for this churn, not against it. As Archie Abrams, VP of Product and Head of Growth at Shopify, explains: “The way we think about churn [goes] back to Shopify’s mission and what we want to do, which is to increase the amount of entrepreneurship on the Internet.”

Instead of trying to prevent customers from leaving, Shopify focuses on lowering barriers to entry so more entrepreneurs can try starting businesses. They know most will fail, but the few who succeed generate massive value. This counterintuitive approach has helped Shopify power over 10% of U.S. e-commerce with $235 billion in GMV in 2023.

The beauty of this model lies in its retention through value creation, rather than friction. Traditional SaaS companies worry about churn because losing a customer means losing all their revenue. But when your revenue scales with customer success, churn becomes less of a concern. Your most successful customers are worth 10x or 100x more than your average customer, creating a natural buffer against churn.

Finding your untapped revenue

The process of discovering untapped revenue in your user base can be synthesized into a few steps:

Step 1: Segment your demand curve

Different customer segments have different willingness to pay. Enterprise customers might value security and compliance features, while SMBs prioritize ease of use and cost. Map these segments and understand what each values most.

Step 2: Identify value gaps

Look for places where customers are getting significant value but paying relatively little. These are your biggest opportunities for revenue expansion. Often, these are found in features that save customers time or help them make money.

Step 3: Create extraction mechanisms

Build pricing tiers, usage limits, or premium features that allow high-value customers to pay more for the value they receive. The key is making this feel like a fair exchange rather than a penalty.

The most effective monetization strategies combine multiple approaches. For example:

• Base + usage: Provide a predictable subscription base with usage-based charges for additional value. This gives customers cost certainty while allowing you to capture upside from heavy users.
• Tiered value: Create pricing tiers based on customer segments and use cases, not just feature lists. Each tier should feel designed for a specific type of customer.
• Expansion revenue: Build mechanisms for customers to naturally increase their spending as they grow. This could be through additional seats, increased usage, or premium features.
• Value-based upgrades: Tie pricing increases to value delivered, rather than just features added. When customers see clear ROI, they’re willing to pay more.

Step 4: Test and iterate

Pricing optimization is an ongoing process. Test different approaches, measure customer response, and iterate based on data. The best monetization strategies evolve continuously.

A monetization strategy that works for the long term

The future of SaaS monetization is about aligning pricing with value creation rather than resource consumption. The untapped revenue in your user base is real, measurable, and accessible, and approaching it with a value-based strategy will help you capture it.

At The Good, we specialize in helping SaaS companies optimize their monetization strategies through data-driven research and strategic experimentation.

Our services can help you identify value gaps, design pricing experiments, and implement changes that drive meaningful revenue growth. Get in touch to learn how we can help you extract more value from your existing customers.

The post Building A Monetization Strategy That Doesn’t Leave Untapped Revenue in Your User Base appeared first on The Good.

Yet lots of companies treat their existing users as endpoints instead of starting points. They focus on acquiring new customers rather than leveraging the growth potential already sitting in their user base.

There are plenty of strategies to maximize your existing user base, including leveraging the power of growth loops and positive network effects as covered in other articles, but today I want to touch on how strategic feature creation that drives collaboration is an underrated revenue opportunity.

Why account expansion through collaboration can beat traditional sales tactics

The traditional approach to account expansion relies on sales teams identifying upgrade opportunities and convincing decision-makers at a company of the value. However, a new group of buyers is not accounted for in this model.

“Citizen SaaS buyers” now influence 40% of all company SaaS spending. These aren’t IT decision-makers; they’re everyday users who either A) find tools so valuable that they eventually buy them for their teams or B) see how much more effective it would be if more team members used them, so they advocate for upgrades.

These users typically start as single-seat or individual account holders, and instead of a traditional path to account expansion, their user journey finds upgrade paths via team or collaborative features. This style of collaboration-focused expansion makes upgrading feel like an extension of getting work done. It focuses on what naturally happens when users find real value.

How does it work in action?

This model of account expansion creates self-reinforcing cycles where user actions naturally drive more user actions. Unlike traditional sales funnels that end with a purchase, growth loops turn a user interaction into a potential expansion opportunity.

Here’s how a collaboration-driven growth loop works:

• User finds value → Individual user discovers your product solves a real problem
• User enhances value through collaboration → To maximize the solution, they need to involve teammates
• Collaboration creates shared investment → Team builds workflows, templates, and shared resources
• Shared investment increases dependency → Team becomes reliant on collaborative workflows
• Dependency drives expansion → Team needs more features, seats, or capabilities
• Expansion enables bigger problems → Larger teams tackle more complex challenges
• Bigger problems require more collaboration → Loop repeats at a larger scale

This isn’t just theory. We’ve seen this pattern drive expansion in everything from design tools to project management platforms. The key is designing features that naturally create more collaboration opportunities. Eventually, revenue grows through authentic value creation rather than time-intensive upselling.

Understanding the types of collaboration and team features

Before diving into strategy, it’s helpful to understand the different types of collaboration features that SaaS companies use to turn individual users into team advocates. These features work best when they feel like natural extensions of your core product value rather than bolted-on additions.

Sharing and access features

These are the foundations of most collaboration strategies. Users can share specific content, projects, or workspaces with colleagues. Examples include shared documents, project folders, dashboard links, or design files. The key is making sharing feel essential to getting work done rather than optional.

Notion has clear shared workspaces, allowing groups of individual users or “teams” to share documents, templates, and files.

Invitations

Direct invitation systems let users add colleagues to their accounts or workspaces. This includes features like “Add team member,” workspace invitations, or role-based access controls. The most effective invitation systems make it obvious why adding someone will improve the work for everyone involved.

Google Meet offers pre-meeting invite capabilities and makes it simple to add new attendees to a meeting with multiple invitation calls-to-action, and even provides suggestions of individuals you can add.

Real-time collaboration

Features that let multiple people work on the same thing simultaneously. This includes co-editing documents, collaborative whiteboards, shared design files, or synchronized data entry. Real-time collaboration often creates the strongest expansion pull because it makes individual work feel incomplete.

Figma is a masterclass in real-time collaboration, with shared files, “jam sessions” or timed working sessions, and even name tags on cursors to see where collaborators are in the file.

Communication and feedback tools

Built-in ways for team members to communicate about shared work. This includes comment threads, @mentions, approval workflows, or status updates. These features keep conversations contextual to the work, making your product the natural hub for project communication.

Airtable offers commenting, tagging, and assignment features throughout the tool, allowing teams to notify each other and host conversations in relevant project spaces.

Permission and role management

Systems that let users control who can see or edit what. This includes viewer/editor roles, department-level access, guest permissions, or approval hierarchies. Good permission systems make it safe and easy to include external stakeholders in workflows.

TLDV clearly outlines the sharing permissions on videos with levels of access, including “my team,” “my organization,” and individual users. There are also general access links if you want to share beyond account holders.

Workflow and process sharing

Features that let users create templates, processes, or automated workflows that others can use. This includes shared templates, workflow automation, or standardized processes. When teams build shared workflows, they create a collective investment in your platform.

Canva has brand kits, controls, and templates that can be shared amongst your team to help standardize and speed up your design workflows.

Social and activity features

Elements that show what team members are working on and create visibility into collaborative work. This includes activity feeds, presence indicators, or team dashboards. These features help teams stay coordinated while showcasing the value of collaborative work.

Slack offers great visibility into who is online with the green or transparent status dot next to users in the sidebar, giving easy indicators of who is available for active collaboration.

7 tactics for building collaboration features that drive account expansion and keep users around

The good news is you don’t have to pick just one type of collaboration feature. You can combine multiple types to create comprehensive collaborative experiences that make teamwork feel natural and essential. Here are some essential tactics to help you do just that.

1. Make sharing more valuable than working alone

The biggest barrier to collaboration isn’t technical, it’s behavioral. Users default to working alone unless collaboration is obviously easier and more valuable than individual work.

Design your product so that collaborative features provide immediate, obvious benefits that individual work can’t match. Don’t just make collaboration possible; make it essential for getting the best results.

For example, Figma revolutionized design by making real-time collaboration the default experience. Instead of designers working in isolation and then sharing static files, Figma made the design process inherently collaborative. Stakeholders could see work in progress, provide feedback in context, and feel involved in the creative process. This didn’t just improve design quality; it naturally expanded usage to include project managers, developers, and executives who previously only saw final designs.

2. Build features that create shared investment

When users invest time in building collaborative structures, they create switching costs that extend beyond individual preferences. The more a team builds together, the harder it becomes to leave your platform.

Provide tools that enable users to create shared resources, templates, and workflows that become more valuable as more people contribute to them. Make it easy to start collaborative structures and painful to abandon them.

A good example is Notion’s template system, which creates significant shared investment. When a team builds a comprehensive project management template with custom properties, linked databases, and automated workflows, they’re not just organizing their current work; they’re creating a system that becomes more valuable as more team members contribute to it. Removing team members from the workspace breaks the system, creating a natural resistance to downsizing.

3. Make collaboration visible and desirable

When users see colleagues accessing information, participating in decisions, or benefiting from workflows they can’t access, they naturally want to be included. Visibility drives demand for inclusion.

Make collaboration visible and valuable. Show users what they’re missing when they’re not part of collaborative workflows. Create transparency around who’s involved in what work, and make it easy to request access or suggest inclusion.

One example is Slack’s channel system, which creates visibility that drives expansion. When important decisions happen in channels users can’t access, they naturally request to be added. When they see colleagues sharing resources, celebrating wins, or coordinating work in channels they can observe but not participate in, they want to create their own channels for their work. This visibility drives organic expansion as users advocate for broader team adoption.

4. Include stakeholders who don’t use your product daily

Most SaaS tools start with individual users and try to expand outward. A better approach is to identify who needs to be involved for your primary users to be successful, and then build features that naturally include those stakeholders.

Map out who needs to be involved for your users to achieve their goals. Design features that make it easy to include those stakeholders in workflows, even if they’re not primary users of your product.

Miro understood that successful brainstorming sessions require diverse perspectives. Instead of building a tool just for facilitators, they created features that make it easy to include participants who might never use Miro independently. Guest access, simple sharing links, and intuitive contribution tools mean that workshop participants don’t need to be Miro experts to add value. This naturally expands usage to include executives, clients, and cross-functional team members who become advocates for broader adoption.

5. Recognize when users need help and suggest collaboration

The most effective collaboration features activate automatically when users hit natural collaboration points in their workflow. Instead of requiring users to remember to invite colleagues, smart systems recognize when teamwork would be valuable and make it easy to initiate.

Identify the moments in your user workflows where collaboration would be most valuable. Build features that recognize these moments and proactively suggest or facilitate collaboration.

Canva’s team features activate when users create designs that would benefit from collaboration. When a user creates a brand template, the platform suggests inviting brand managers. When they start a campaign design, it recommends involving marketing team members. When they build a presentation, they offer to share it with stakeholders for feedback. These suggestions feel helpful rather than pushy because they activate at moments when collaboration genuinely improves outcomes.

6. Support different work styles and schedules

Not all collaboration happens in real time. Some of the most powerful collaborative features work across time zones, schedules, and work styles. Asynchronous collaboration features often drive more expansion because they’re less dependent on coordinating schedules.

Build collaboration features that work when team members aren’t online simultaneously. Focus on features that let people contribute when it’s convenient for them while maintaining context for others.

Loom’s video messaging creates asynchronous collaboration opportunities that naturally expand usage. When someone creates a video explanation of a complex process, they often need to share it with multiple stakeholders who weren’t part of the original conversation. The video becomes a shared resource that multiple team members reference, comment on, and build upon. This creates natural expansion as teams recognize the value of asynchronous video communication for knowledge sharing.

7. Use access control as an expansion tool

Most SaaS companies think about permissions as security features. The smartest ones also use permissions as expansion features. Well-designed permission systems create natural opportunities for users to expand access as their needs grow.

Design permission systems that make it easy to grant appropriate access to new stakeholders without overwhelming them or compromising security. Use permission requests as expansion opportunities rather than barriers.

For example, Dropbox’s permission system creates natural expansion opportunities. When users want to share folders with specific access levels, they’re guided through options that often result in upgrading accounts to accommodate more users or storage. The permission system protects files and creates moments where users recognize the value of bringing more people into their workflows.

Ready to organically drive account expansion?

Collaboration-driven account expansion isn’t just about adding team features to your product. It’s about understanding how work really gets done and building features that make collaboration feel natural, valuable, and necessary.

The SaaS companies that master this approach turn every user into a potential growth engine. They create products so collaborative that teams can’t imagine working any other way. When collaboration becomes essential to how work gets done, account expansion becomes inevitable.

At The Good, we’ve helped SaaS companies identify and build collaboration features that drive meaningful account expansion. Our Digital Experience Optimization Program takes a systematic approach to understanding user behavior, designing collaborative experiences, and optimizing for sustainable growth.

Ready to transform your users into your most effective growth engine? Let’s explore how collaboration-driven expansion can accelerate your growth.

The post How to Drive Account Expansion with Collaborator & Team Features That Stick appeared first on The Good.

Most SaaS companies approach these upgrade opportunities with the same basic playbook: add an “Upgrade Now” button and hope for the best. But the companies exceeding their conversion goals understand something different: every upgrade scenario requires its own conversion-centered design strategy.

What is conversion-centered design?

Conversion-centered design is the practice of building digital experiences by making design decisions that serve a specific conversion goal. Unlike traditional user experience design, which prioritizes general usability and user satisfaction, conversion-centered design focuses on guiding users toward specific actions through strategic design choices.

In the case of SaaS upgrades, it’s about understanding the user behavior behind different types of SaaS upgrade decisions and crafting experiences that remove friction at precisely the right moments.

Beyond free-to-paid: the full spectrum of SaaS upgrades

Before we dive into design principles, let’s map the actual upgrade landscape most SaaS companies navigate:

Free trial to paid subscription

Free trial to paid subscription is the classic conversion challenge, where users evaluate whether your product delivers enough value to justify ongoing payment. Users typically weigh their decision based on factors such as feature completeness, onboarding success, and competitive alternatives.

Freemium to premium plans

In a transition from freemium to premium plans, users already love your basic offering, but need to justify paying for advanced features. This involves different psychology than trial conversions. You’re asking satisfied users to spend money, not preventing churn.

Plan tier upgrades

In tiered pricing plans, existing customers hit limits or need additional capabilities when considering an upgrade. These users are already paying, so the decision typically involves budget approval and feature value demonstration, rather than product evaluation.

Usage-based expansions

When customers exceed included allowances for API calls, storage, or monthly active users, they will often consider a usage-based upgrade. The decision here is often reactive rather than strategic, requiring different messaging and strategy.

Feature unlock purchases

In this scenario, individual premium features are available for one-time purchase rather than as part of a plan upgrade. Examples include advanced reporting, integrations, or compliance features sold separately.

Seat-based growth

In order to get tool access for the whole team, a user may need to purchase additional user licenses or a team account. This decision involves both the original user and new team members, creating complex decision dynamics.

Annual vs. monthly billing

Convincing users to commit to longer-term contracts for discounts is tricky. This upgrade isn’t about features, it’s about cash flow and commitment.

Each of these scenarios requires a different conversion approach because the user psychology, decision-making process, and friction points vary significantly. Let’s explore how conversion-centered design principles adapt to these diverse upgrade contexts.

The 7 principles of conversion-centered design for SaaS upgrades

Principle 1: Context-driven focus

Traditional conversion design emphasizes “creating focus” around the action you are leading users towards. In SaaS applications, that focus must be contextual. A user who has reached their storage limit requires a different focus than someone exploring premium features during onboarding.

How this works in practice:

For usage-based upgrades, focus should be immediate and solution-oriented: “You’re running low on API calls. Upgrade now to avoid service interruption.” Remove all other navigation options and make the upgrade path the primary action.

For feature exploration, focus should demonstrate value: “See how advanced analytics helped Acme Corp increase conversions by 34%.” Here, you can include secondary actions like “Learn More” or “See Example Report” because the user isn’t facing immediate urgency.

The key is recognizing where users are in their usage journey and matching your design focus to their mental state.

Here is a good example from Lovable. After creating a design, when you attempt to share it with your team, you are contextually prompted to “upgrade to collaborate.”

Principle 2: Progressive value architecture

Instead of dumping all premium features on users at once, structure your upgrade experience to build conviction progressively. This principle is especially important for complex SaaS products with multiple upgrade paths.

How this works in practice:

Design upgrade flows that reveal features progressively based on user engagement rather than showing everything upfront. Track which users click “Learn More” vs “Upgrade Now” to understand where additional information helps vs. hurts conversion. To implement, you can consider an upgrade architecture like:

Level 1: Immediate benefit

Lead with the single most compelling reason to upgrade based on the user’s current context. If they’re hitting usage limits, start with expanded capacity. If they’re in a specific workflow, highlight features that enhance that workflow.

Level 2: Supporting benefits

Once users engage with the primary benefit, introduce 2-3 supporting features that reinforce the upgrade decision. These should be directly related to their demonstrated usage patterns.

Level 3: Full feature set

Only after users show continued interest should you present comprehensive feature comparisons. Most users never need to see this level; they convert based on the immediate benefit alone.

Principle 3: Consistency across touchpoints

SaaS upgrades happen across multiple touchpoints, like in-app prompts, email campaigns, billing pages, and feature gates. Consistency across messaging, timing, and value presentation will support upgrade conversions.

How this works in practice:

• In-app feature gates: When users encounter locked features, the messaging should match what they’ll see on upgrade pages. If your feature gate says, “Unlock advanced reporting,” your upgrade page shouldn’t suddenly talk about “premium analytics.”
• Email upgrade campaigns: Match the urgency and tone of in-app experiences. If your app uses gentle nudges, don’t send aggressive “Last Chance!” emails. The psychological approach should feel consistent.
• Billing-triggered upgrades: When users approach usage limits, the upgrade flow should feel like a natural extension of their current experience, not a disruptive sales pitch.

Grammarly excels at this with its “writing update” emails, which share your usage statistics and include personalized upgrade benefits. They also maintain the same helpful, educational tone as their in-app suggestions. Users receive consistent value messaging whether they encounter upgrade opportunities in the app or via email.

Principle 4: Outcome-focused benefits

SaaS users don’t buy features, they buy outcomes. But different upgrade scenarios require different outcome framings. A user exploring premium features during onboarding has different priorities than someone hitting usage limits.

How this works in practice:

Use outcome language that matches your user segmentation research. Different user segments care about different outcomes, even for the same features. Your “productivity tools for SMBs” messaging should differ from “enterprise compliance solutions,” even if you’re selling similar capabilities.

Depending on the upgrade scenario, here are some examples:

• Trial-to-paid: Focus on productivity and competitive advantage outcomes. “Close deals 40% faster with advanced pipeline analytics”
• Freemium-to-premium: Focus on elevated capabilities and professional outcomes. “Transform from good to exceptional with premium design tools.”
• Plan upgrades: Focus on growth and scale outcomes. “Handle 10x more leads without adding headcount”
• Usage expansions: Focus on continuity and momentum outcomes. “Keep your growth trajectory without interruption.”
• Feature unlocks: Focus on specific workflow improvements, “Cut monthly reporting time from 8 hours to 30 minutes.”

Perplexity does this effectively by emphasizing the advanced capabilities you’re missing out on if you run out of your five free pro queries per day.

Principle 5: Friction-aware CTA design

Not every upgrade decision carries the same level of friction. Annual commitments create more friction than monthly upgrades. New feature adoption creates more friction than usage expansion. Your CTA design should account for these friction differences.

How this works in practice:

• Low-friction upgrades (usage expansion, monthly plan changes): Use direct, immediate CTAs. “Upgrade Now,” “Add More Storage,” “Increase Limit”. These can be prominent, high-contrast, and positioned aggressively because user resistance is low.
• Medium-friction upgrades (plan tier changes, feature unlocks): Use value-reinforcing CTAs: “Start Free Trial of Pro Features,” “See Premium Features,” “Try Advanced Tools”. Provide trial options or demos to reduce commitment anxiety.
• High-friction upgrades (annual contracts, major plan changes): Use progression-based CTAs: “See Pricing Options,” “Calculate Savings,” “Talk to Sales”. Focus on information-gathering rather than immediate commitment.
• Advanced CTA strategy: Implement dynamic CTAs that change based on user behavior. First-time feature gate encounters might show “Learn More,” while repeated encounters show “Start Free Trial,” and high-engagement users see “Upgrade Now.”

Principle 6: Social proof and trust building

The social proof that convinces someone to try your free trial won’t necessarily convince them to upgrade to enterprise features. Match your trust-building elements to the specific upgrade decision and user context.

How this works in practice:

• For security-conscious upgrades (compliance features, enterprise plans): Emphasize security certifications, enterprise customer logos, and compliance badges, “Trusted by Fortune 500 companies with the highest security standards”.
• For performance-driven upgrades (advanced features, professional tools): Highlight usage statistics and performance improvements, “Pro users complete projects 3x faster on average”.
• For team-based upgrades (collaboration features, multi-seat plans): Show team success stories and collaboration outcomes, “Marketing teams using our collaboration tools report 50% better campaign coordination”.
• For usage-based upgrades (expanded limits, additional capacity): Display growth-stage social proof, “Over 10,000 scaling companies choose our unlimited plan”.
• Trust-building implementation: Position trust elements where conversion anxiety is highest. For high-commitment upgrades, prominently display customer logos and testimonials. For usage expansions, emphasize reliability and uptime statistics.

Suno, an AI music creation platform, includes new feature upgrade options on the same page as featured creators, so you can see how popular artists are using features.

Principle 7: Conversion path optimization

Remove every unnecessary step between the upgrade decision and upgrade completion. However, “unnecessary” depends on the type of upgrade and user psychology. Some upgrades benefit from additional information, while others suffer from any delay.

How this works in practice:

• Immediate need upgrades (usage limits, access blocks): Minimize to single-click upgrades where possible. Pre-populate billing information, default to current payment methods, and confirm changes without additional steps.
• Exploratory upgrades (feature discovery, plan comparison): Allow for investigation without requiring immediate commitment. Provide detailed feature comparisons, trial options, and clear pricing information before asking for upgrade decisions.
• Team decision upgrades (enterprise features, multi-seat plans): Build in consultation and approval workflows. Provide team trial options, detailed ROI calculators, and easy sharing tools for decision-making groups.
• Budget-conscious upgrades (annual plans, major tier changes): Include savings calculators, payment plan options, and clear cancellation policies to reduce financial anxiety.
• Advanced optimization: Implement progressive profiling where users provide information gradually rather than all at once. For complex upgrades, break the decision into smaller commitment steps rather than requiring full upgrade commitment immediately.

The future of SaaS monetization design

SaaS upgrade optimization requires more than applying basic conversion principles to billing pages. The most successful companies understand that different upgrade scenarios require different psychological approaches, design strategies, and optimization metrics.

The 7 conversion-centered design principles are a great way to start doing just that.

But it’s not a one-and-done process. Iterate your designs and conduct user testing to figure out which upgrade paths are working and which aren’t.

As SaaS markets mature, upgrade optimization becomes increasingly sophisticated. Successful companies will move beyond the basics and:

• Embrace usage-driven monetization: Move beyond simple tier-based pricing to value-based and usage-responsive pricing models that require more nuanced upgrade design approaches.
• Implement AI-driven personalization: Use behavioral data to personalize upgrade timing, messaging, and pricing presentation for individual users rather than broad segments.
• Develop ecosystem-based upgrades: Create upgrade opportunities that span multiple products or services within a broader platform ecosystem.
• Focus on revenue expansion: Prioritize existing customer upgrade experiences over new customer acquisition as markets become more competitive.

Ready to optimize your SaaS upgrade experiences across every monetization touchpoint? The Good’s Digital Experience Optimization Program specializes in helping product-led companies design sophisticated upgrade experiences. Check it out and learn how you can take your business from product-market fit to sustainable scale with conversion-centered design techniques customized for your business and users.

The post Conversion-Centered Design: 7 Principles That Drive SaaS Upgrades appeared first on The Good.

Truthfully, most people couldn’t care less if you offer one feature or 50. They just want the product to solve their problems and make their life easier.

So, if you want to convert free trial users, your task is to show them how your product meets their needs. If you can’t help them achieve a desired outcome, they simply won’t buy.

In this article, we’re going to discuss how to convert free trial users to paying customers. We’ll talk about your free-to-paid conversion rate and offer some strategies to boost conversions.

What is a Free-to-Paid Conversion Rate?

Free-to-Paid Conversion Rate measures the percentage of users who transition from using a free version of a product or service to a paid version.

If you want users to upgrade to paid tiers of your product, this is an important metric to track.

It’s also important for freemium models, where users can access some features for free and are encouraged to pay for premium features.

Here’s the formula to calculate a Free-to-Paid Conversion Rate:

Free-to-Paid Conversion Rate = (number of users who convert to paid / total number of free users) X 100%

For example, if a SaaS company has 10,000 free users and 500 of them upgrade to the paid version, the Free-to-Paid Conversion Rate would be:

(500/10,000) X 100% = 5%

As you would imagine, you’ll want to push this number as high as possible, as more conversions to paid accounts mean more revenue.

What We Mean by “Free Trial”

Before we discuss converting free trial users, let’s clarify the different free trial strategies.

Freemium Model

Freemium is a two-tiered model with a free tier and a premium plan. The free tier usually grants perpetual access to a restricted version of the product, either by limiting the accessible features (e.g., four of six features available) or placing caps on features (e.g., a limit of 20 downloads per month).

Freemium product users can upgrade to a paid version to access the full features. In some cases, freemium users are charged a la carte for product usage.

Reverse Trial

In a reverse trial, a time-based approach coined by Elena Verna, Head of Growth at Dropbox, users start with full access to all features for a limited time during a trial phase. Then they get moved to a freemium plan with limited product features.

With this system, they get the product’s maximum value from the beginning of the trial experience. If they want to regain access to full features, they need to purchase the paid plan.

Trial With Payment

In a trial with payment, users are required to provide payment information upfront (a credit card) to gain full access to the product for a limited period of time. The trial is free, but upon a specific date, they will be charged to use the full suite of product features.

Which Model is Right for You?

Naturally, it depends on your product and potential customers. There is a ton of nuance in understanding and building your product strategy.

Two helpful tools to leverage when exploring the right fit for you and your users are the ROPES framework and verb scoring.

Once you know what your customers expect and need, you can choose the trial offering that matches their journey.

How Do I Convert Free Users to Paid Users?

Converting free trial users to paid users is about demonstrating your product’s value. You can do this by strategically placing messaging throughout your site and/or app.

Keep in mind that your free trial signups already know the product is good. That’s why they signed up in the first place. Your job is to convince them that the value they’ll get from the product is worth the price.

Basically, you need them to conduct a cost-benefit analysis of your product and decide that your product comes out on top. Highlighting benefits, offering social proof, giving product tours, and boosting user engagement are just some of the techniques brands use to increase activation rates.

You can’t invite this kind of thinking unless you know your customers well. Exceedingly well. Only once you know what triggers them to buy can you build a user experience that entices them to convert.

9 Free Trial Conversion Strategies

Let’s walk through some powerful free-to-paid conversion strategies. Use some or all of these to turn free trial users into paying customers. As always, experiment and test to find the techniques that produce the best results.

1. Remind Users to Upgrade Early and Often

Many SaaS organizations make the mistake of waiting until the end of the free trial to prompt users to upgrade, often by direct outreach from the sales team. However, this approach fails to make use of numerous opportunities that could lead to a potential conversion.

Start prompting users to upgrade from the beginning of their experience and remind them that they aren’t getting the full feature suite. Do this often using CTAs, in-app notifications, tooltips, popup overlays, onboarding videos, support messages, and marketing emails.

Dropbox isn’t shy about prompting non-paying users to upgrade on each page of the dashboard.

2. Drive Users to Value Quickly

As we’ve mentioned a few times, people use your product to benefit themselves. If you want them to think it’s worth the cost, help them achieve that value quickly.

First, you have to understand what that “moment of value” is for your customers. This requires robust knowledge of your customers’ problems and needs. The moment they see value in your product may not be as intuitive as you think. For example, you might think the most valuable feature is Download when really it is Share or Cloud Storage.

Next, drive your users toward that valuable moment by nudging user behavior. Checklists and progress bars are great tools here. Give your users a concise set of steps to follow that culminates in the moment of value.

When a user begins a checklist, psychological motivators like the sunk cost dilemma and endowed progress encourage them to complete it.

Throughout the checklist, you walk free trialists through any tasks necessary to get to the moment of value, like adding contacts, filling out their profile, integrating other apps, etc. At the end, the user should achieve something that makes them think, “Oh, this product actually solves my problem.”

3. Present Gated Features Near Free Features

By strategically placing prompts or highlights for premium features adjacent to free ones, you create an opportunity for trial users to envision how the paid features can enhance their experience.

For example, PDF Converter lets you convert PDF files into other formats for free. However, the premium feature (a higher print quality) is positioned nearby.

This ensures that users are consistently reminded of what they are missing, sparks curiosity, and demonstrates the tangible benefits of upgrading.

Using visual cues, such as icons, badges, or color contrasts, can further draw attention to these gated features. For example, a lock icon next to an advanced tool can indicate that it is part of the paid tier, prompting users to consider the upgrade.

4. Make Your Calls-to-Action Clear and Consistent

A call-to-action (CTA) is a quintessential marketing tool. Clear and consistent CTAs placed throughout your user journey are great ways to guide users toward the next step. In this case, the next step is a paid tier of your product.

Your CTAs should be direct and easy to understand. There’s no room for ambiguity here. Users should immediately understand what will happen when they click that button.

Avoid vague or overly complex language. Use straightforward phrases like “Upgrade Now,” “Unlock Premium Fonts,” or “Start Your Subscription.”

Place your CTAs in locations where users are most likely to engage with them, such as:

• Onboarding screens
• Dashboards and home screens
• Email campaigns
• Global header
• In-product

Maintain a consistent design for your CTAs so they are recognizable across your platform. Use uniform colors, fonts, and button styles.

It’s also helpful to accompany each CTA with some brief text that highlights the benefit. For instance, “Upgrade Now to Access Advanced Analytics” or “Unlock Unlimited Storage.” This helps remind users that the upgrade is worth their investment.

Canva uses a great call-to-action. It describes the benefits and what users get and reminds the user that they can cancel at any time. The app uses upgrade buttons of similar design elsewhere in the app.

5. Be Thoughtful About Which Features are Gated

Generally, you want to give away enough value with the free version of your product to build a solid user base. This will help users make the connection that the paid version offers even more value.

Offer free features that make users reliant on the product. You want them to build it into their personal and professional workflow.

For instance, if your product involves storing users’ files, give away some storage space for free to bring them into the product, then charge for additional storage. They will be more likely to purchase your storage because their files are already there rather than switch to a new provider.

Canva is a notable example of this. Creating documents is free, but exporting them into certain formats is gated behind a paywall. Which formats are gated? The ones associated with experts or business users.

6. Make Free Users Aware of Their Trial Time

Keeping your users aware of their remaining time can create a sense of urgency and encourage them to consider transitioning to a paid tier before the trial expires.

Clear and Frequent Reminders

Send regular emails or in-app notifications to inform users about their trial status. These reminders should start as soon as they begin the trial and become more frequent as the trial period nears its end.

Countdown Timers

Incorporate countdown timers within your app or on your website. These visual cues serve as constant reminders of the trial period’s ticking clock, subtly urging users to make a decision.

Highlight Benefits

Each reminder should not only inform users about the time left but also emphasize the value and benefits of the paid version. Use these touchpoints to showcase features they haven’t explored yet or to highlight how the paid tier can solve specific pain points they’ve experienced.

Offer Limited-Time Discounts

As the trial period comes to a close, consider offering a limited-time discount for upgrading. This tactic leverages the sense of urgency created by the trial countdown and adds an additional incentive to convert.

That said, we don’t always recommend discounting your product. It can be useful to get someone in the door, but it can also devalue your product and brand. Be very careful with discounts.

7. Offer a Great Onboarding Experience

The onboarding process is the first impression users have of your product or service. A positive experience can significantly influence their decision to upgrade.

Provide a clear and concise step-by-step guide to help users navigate your product. Use tooltips, interactive tutorials, or walkthroughs to highlight key features and demonstrate how to use them effectively.

Emphasize the unique features and benefits of the paid version. Show users how these features can solve their problems or enhance their experience.

It’s also smart to help users achieve quick success to boost their confidence and satisfaction with your product. These early wins can be as simple as completing a task, setting up their profile, or customizing their dashboard.

8. Use Paywalls to Demonstrate Paid Features

Paywalls demonstrate the value and benefits of premium features, which entices users to upgrade to unlock full access. When designed thoughtfully, they can drive conversions without causing frustration.

Place your paywalls strategically at points where users are likely to see the value of upgrading. These can include:

• Feature usage: When a user attempts to access a feature that is only available in the paid tier, present a paywall that explains the benefits of that feature. For example, if your product is a photo editing tool, a paywall might appear when a user tries to use advanced filters or high-resolution exports.
• Content access: Content-based platforms, such as news websites or educational sites, use paywalls to restrict access to premium articles, videos, or courses. Clearly communicate the added value of the premium content to encourage users to upgrade.
• Usage limits: Implement usage-based paywalls where users can access basic features for free but encounter limits on their usage. For example, a project management tool might allow a certain number of projects or tasks in the free version, with a paywall prompting an upgrade to manage more.

Each paywall should clearly articulate the benefits of upgrading to the paid version. Use persuasive messaging to highlight key value propositions, such as enhanced features, better performance, exclusive content, etc.

9. Clearly Label Your Paid Features

Transparent and distinct labeling helps users understand what they are missing out on and how the paid version can enhance their experience. This fosters a sense of curiosity and desire.

Ensure that the paid features are visibly differentiated from free ones. Use consistent visual cues such as icons, badges, or color schemes to indicate premium features.

For example, you might use a lock icon or a different color for buttons and menus that lead to paid features. This visual differentiation helps users easily identify what they can unlock by upgrading.

Use in-context prompts to highlight paid features during the user’s interaction with your product. For example, if a user is using a basic editing tool, a prompt might suggest, “Upgrade to access advanced editing options,” along with a brief description of the additional tools they would receive.

Improve Your Free-to-Paid Conversion Strategy with The Right Disciplines

While you may handle some strategies internally, improving your free-to-paid conversion rate requires a specific skill set and multiple disciplines. The Good’s Digital Experience Optimization Program offers a comprehensive solution tailored for SaaS, ecommerce, and product marketing teams.

Clients like Adobe and The Telegraph have praised The Good for our ability to validate hypotheses, drive engagement, and achieve substantial growth.

How it works: We conduct a full funnel analysis of your digital product using heatmap analysis, session recordings, and usability testing. Then, based on those insights, we build a custom program that includes road mapping, experimentation, and customer journey mapping.

Ready to see how your strategy can be optimized? Schedule an introductory call and unlock your brand’s full potential.

The post How to Convert Free Trial Users to Paying Customers appeared first on The Good.

How do you understand if your features are supporting user exploration while leaving enough out of reach to incentivize conversion?  

Enter verb scoring.

A handy tool that evaluates and scores user actions based on permissions, verb scoring offers product teams an avenue to align on and improve their product monetization strategy.

The early payoff is to understand where the strategically placed friction is within a user experience. Then, once you are aligned on how your product’s features support your strategy, you can build a shared vision for the purpose of each feature.

Whether your goal is to gain share-of-voice, build a stable of free users, monetize existing ones, or connect with leads, verb scoring helps you build an intentional acquisition and monetization strategy.

In this article we will:

• Define verb scoring
• Review verb scores (with examples)
• Demonstrate how to use verb scoring to evaluate your and/or your competitor’s acquisition, retention, and monetization strategy

Note: This is part one in a two-part series on verb scoring. Stay tuned for the follow-up on how verb scoring can support your product strategy (with examples).

What is verb scoring?

Verb scoring is the act of evaluating actions that users can take in your and your competitors’ products and then scoring them based on the level user of entitlements (or the amount of friction) required to perform the action. 

What are the primary benefits of verb scoring?

A verb scoring exercise allows you to evaluate your strategy. Then, you can produce an artifact that communicates it in a visual, shareable, and succinct feature matrix.  

This at-a-glance accounting of your product features allows you to:

• Evaluate your acquisition, retention, and monetization strategy
• Compare your strategy to that of your competitors, and
• Build a smarter strategy that’s best suited to your unique product.

The output of your Verb Scoring Matrix might look something like this:

What do we mean when we say verb?

In the context of verb scoring, verbs are the core features of your product broken down into discrete actions. They are actions users can take within your product, such as creating a ticket, editing a transcript, or sharing a document with a friend.

While in other contexts it’s advisable to stay focused on the core benefits of your product, scoring a product via discrete verbs is helpful in this context. It mirrors the ways users might talk about a product’s limitations. For example, users might say, “I love that I can create a poster, but it won’t let me resize it.” In this example, create and resize are the verbs.

Using verbs, rather than benefits or features, is a user-centered way to evaluate your product’s functional limitations from the perspectives of users with varying entitlements.

What products could benefit from verb scoring?

Verb scoring is especially useful for any product in which acquiring paying customers relies on some combination of having both free and paid features. It’s also useful for products with teams deciding whether or not to gate parts of the digital experience.

What are the various verb scores?

There are six different verb scores that represent growing levels of “friction” required to utilize them. Each serves a different purpose in your strategy:

Let’s look at each verb score in more detail.

Anonymous

The verb score with the least amount of friction is scored as Anonymous.

Anonymous verbs are those in which a user can take an action completely for free, without giving away any information about themselves.

We call these verbs Anonymous because they don’t require any information (e.g., name or email address) to use them, so the user can remain “anonymous” and make use of the features.

Think of using an online PDF compression tool. If a user doesn’t need to give anything away to take the action and can do it an unlimited number of times, then the verb is scored as Anonymous.

Example: PandaDoc’s Online PDF compression tool allows users to compress a PDF document for free without requiring an email address.

Anonymous verbs are the most frictionless ways users can take an action within your product.

Limited Anonymous Use

We add just a small amount of friction in the next verb score: Limited Anonymous Use (LAU).

With LAU verbs, users can take an action without providing information, but we impose limitations on its use in some way (or at some point).

Example: Adobe does this with their online PDF converter on the user’s second use. The first time a user converts a file, he can do so without giving away any information.

However, try to use the free online PDF converter again, and the user is required to share an email address to download their converted document.

Example 2: Many online media publications use LAU verbs when it comes to giving away content. New York Times readers can read one article for free, but once they try to read a second article, they are asked to create a free account to enjoy more content. In this example, the verb “Read Articles” is scored as LAU because users can do it anonymously, but only a limited number of times.

LAU verbs might have limitations based on the number of uses, number of free uses per day, or other variables. Because the user is allowed to take the action anonymously, but there are eventually limitations on that use, we score verbs Limited Anonymous Use.

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Free with Registration

When verbs can be performed for free, but only after users have provided personal information (like an email address), they are coded as Free with Registration.

Example: Posting on X (formerly Twitter). Once a user has signed up for a free account, they can post, reply, and retweet without limitation.

To take advantage of Free with Registration verbs, the user must give some amount of personal information. This is typically only an email address and name.

Limited Registered Use

When verbs are free to users who have registered, but the capabilities of that verb are limited in some way, those verbs are scored as Limited Registered Use or LRU.

Many companies that have a large free user base rely heavily on LRU features.

Example: Canva gives away a lot of free functionality, but most of their “free” features have limitations. Free users can add text to images, but not the fanciest scripts. Free users can utilize some templates, but not all of them. 

If an action can be taken by a registered user, but the full capabilities of the feature are reserved for paying customers, that verb is scored as Limited Registered Use.

Trial with Payment (TwP)

While some actions can be taken by users who have provided little more than an email address, others are reserved only for customers who have provided a form of payment in exchange for extra functionality. We call these verbs Trial with Payment, or TwP.

TwP verbs are typically high-value actions that users are willing to pay for. In exchange for their use, we ask users to put down some form of payment. But, as the name Trial with Payment implies, users are not charged during a “trial” period. Instead, their card is held and charged only when the trial period ends.

Example: In Canva, users who want to export a design to an SVG must enter a trial period and provide payment information. As such, the verb “Export to SVG” is scored as TwP.

Gated

The word “Gated” is often used as a catch-all for features that have some level of friction. But in verb scoring, the meaning of Gated is specific and is reserved only for the most tightly guarded features.

In verb scoring, Gated features are those that users can’t leverage until they are paying customers.

Truly Gated verbs can’t be accessed by simply signing up for a free trial. They are behind a hard paywall, with up-front payment required to take advantage of them.

Example: Stripe, an online payment processing tool, opens up nearly all functional parts of its dashboard to registered users. Users can create products, draft invoices, create templates, and connect their bank accounts for direct deposits. But when it comes time to actually send an invoice to a client or get paid, those features are reserved for paying customers only. They will not be available via any form of a free trial.

When a feature is reserved solely for already-paying customers, we score that feature as Gated.

A framework for scoring verbs

To execute a verb scoring exercise, you can use the verb score decision tree. This tool helps you take what you just learned in this article and follow a logical process to score your and your competitors’ verbs.

You’ve scored your verbs. Now what?

Once you score your and your competitors’ verbs, you can plot the features/scores on a matrix to demonstrate shared understanding with your team in a crystal clear artifact.

The tool, called a Verb Scoring Matrix, is the starting point for competitive and strategic analysis specific to product monetization.

Plot the features in Verb Scoring Matrix to clearly compare your feature-gating strategy to that of your competitors.

Now, you can get off to the races on developing a strategy as you have a better understanding of how the user experiences friction across your product experience. Additionally, you’ll know how that experience compares to that of your competitors.

To be clear, we aren’t advocating for adding unnecessary friction to a user’s journey. What we are advocating for is having a shared understanding of how your product’s features either support or inhibit your strategy through this friction.

But understanding your features is just the beginning. The next step is to build a shared vision for the purpose of each feature you’ve scored. Then, adjust your strategy accordingly. The second part of this series on verb scoring is available here.

The post An Introduction to Verb Scoring: What It Is and How To Leverage It For Product Acquisition & Monetization appeared first on The Good.

And while we know that digital publishers likely have their hands full with optimizing everything—from landing pages to headlines all the way through to cancellation journeys—paywalls are still one of the most important touch points in a customer lifecycle and a key way that online publications monetize their content.

But in the age of unlimited free content, convincing users to pay for access can be challenging. In this article:

• We define paywall delivery methods
• We show you some best-in-class examples
• We then outline our formula to optimize your paywall design
• We also show you how we created big gains in The Economist’s paywall strategy

What is a Paywall?

A paywall is a system used by online publishers to monetize their digital content and generate revenue. They restrict access to content, such as articles or videos, unless the user pays a fee or subscribes to a service.

In other words, an online paywall is a barrier that prevents users from accessing content until they have paid for it or completed some other action, such as registering an account or signing up for a free trial.

How Paywall Strategy Fits Into a Great SaaS Product Experience

There are plenty of elements within our control when it comes to optimizing a SaaS product experience. As mentioned above, paywalls are just one component of your strategy.

Below you can see how paywalls fit in the ‘Registration’ phase of the user experience and get a better understanding of all the elements we could optimize to improve acquisition, conversion, and retention metrics in digital media.

Registration Walls vs Hard Paywalls (With Examples)

Now, let’s get into the specifics. Paywalls can be implemented in a variety of ways, but there are two main types of paywalls:

Hard Paywalls ask users to subscribe to access content and prevent the user from reading any further until they have subscribed. They may include incentives like free trials, discounts, or special promotions.

Registration Walls prevent the user from reading any further until they have registered. They ask users to give a few simple details like an email address in order to continue reading. Offers vary, but registration walls typically offer a few free articles per month or week to users who register.

Note: Registration walls are sometimes referred to as “soft paywalls” because the nature of the barrier isn’t quite as firm. We recognize that “paywall” is a bit of a misnomer, but it’s easier to say, so it stuck. While we like saving a few syllables here and there, for the sake of clarity, we’ll keep referring to these as Registration Walls throughout this article.

Registration Wall Examples

Registration walls keep it simple. They simply ask the user to exchange minimal information (sometimes only an email address) for article access. They occasionally grant other privileges like commenting and bookmarking, but their main offer tends to be the article itself, not the deeper features like bookmarking.

Let’s look at a few examples of Registration Walls.

Medium keeps its registration wall as simple as it gets: one line of text and two single sign-on (SSO) options. They don’t spend a lot of time convincing users here because they aren’t asking for a lot of effort from users to register.

The New Yorker doesn’t bother with SSO. The simple but directional headline clearly relays the benefit to the reader and asks for minimal effort to continue—a single email field.

Hard Paywall Examples

Hard paywalls are true paywalls. The ones that actually generate revenue. Users can’t close out of or circumvent them by submitting only their email address. A hard paywall asks users to subscribe. It typically offers details like pricing, benefits, incentives, and a call to action.

Hard paywalls are typically seen on article pages where user intent is highest to continue. In some cases, a dynamic paywall is used to gate some types of content but not others.

What’s important about a hard paywall is that it blocks the remainder of the page. A traditional popup that can be dismissed won’t do. A hard paywall, by nature, must obscure the bulk of an article. Let’s look at a few ways that can be done:

An inline paywall is embedded in the page and moves as the user scrolls. In this example from The Economist, they used an inline paywall to obscure the remainder of the article after the first paragraph.

A sticky banner at the bottom of the screen is another common paywall format. Here the New York Times includes key subscription details in their sticky banner.

An overlay, as seen in the Washington Post, obscures article content with a lightbox or popup.  Note that this one can’t be closed in any way but by subscribing.

Solving the Challenge of Negative Sentiment

While paywalls are often a publisher’s primary mechanism for acquiring subscribers, they can also be a source of frustration for users who are accustomed to free online content. This dance between maximizing conversion volume and minimizing damage to reader sentiment can feel tedious. But the SOLID framework is designed to help you turn cold readers into subscribers.

The best paywalls have five key elements, for which we use the mnemonic SOLID:

S — Salient

Paywalls typically get the most visibility and engagement where user intent is highest: on articles and news content pages (as opposed to the home page or category pages). The article is the valuable content the user came to the site for, so this is the first piece of the conversion puzzle; the content has to be so valuable, so important, and so relevant that users are willing to push through barriers to get it.

All this is to say, a well-optimized paywall can’t compensate for a low-value article. The article needs to be worth reading. Users need a compelling reason to push past the barrier you’re presenting, so testing headlines and having a great product is the first step to optimizing the paywall experience. In one word, make sure your content is salient.

O — Offer

Offers are typically given in the form of discounts (as with the 4 weeks for $1 example from the New York Times above), but they can be anything from a free tote bag to entries into a raffle.

Offers add urgency, appeal, and a reason to convert beyond the immediate value. They can get users who might normally abandon at the first sight of a paywall to consider subscribing.

L —  Low Friction

Most web designers know that the more fields, steps, and instructions you add to a form, the more you can expect users to abandon. But are you sure you know what “easy” really means to your users?

Minimizing form fields is sure to make your form easier to use, but it doesn’t address how effortful a user perceives the signup process to be.

Perceived effort is the user’s impression of how complicated the process will be, and a high perceived effort level can cause users to abandon when they feel they don’t want to invest the time or effort required. As a result, we not only need to concern ourselves with the signup process being easy, but we also want the experience to appear easy.

To minimize perceived effort and create a low friction experience, you may want to abate concerns by communicating that the whole process will be 1) simple and 2) quick:

• Use phrases like “sign up in minutes” to reassure users that you respect their time and will get them back to the article quickly
• Show a minimal number of steps and fields from the initial screen, so users can get quick, visual confirmation that the signup process will go quickly
• If you offer a free trial, you may want to let users know that you’ll remind them before their trial ends so they know they won’t forget to cancel (if that’s their intent)
• Use phrases like “cancel any time” and so users know they can back out if they aren’t happy

I —  Immediate Value

While we’re giving you the kindling to level-up your paywall game, we would be remiss if we didn’t mention one foundational element to a paywall: make sure you convey the immediate value users will receive by subscribing.

It’s great to have enticing offers, a low-friction form, and the best articles, but users are here for one reason: they want to learn something. Be sure to give them not just an offer, but the assurance that if they subscribe, they will gain access to the article.

Great paywalls will always contain some reference (either in the main header or in the subheading) to:

1. What users will receive immediately after subscribing and
2. How to get it

Consider these examples:

• Subscribe to continue reading (Washington Post)
• Read the rest of this story with a free account (Medium)
• Sign up to keep reading (The Economist)

If you’re unfamiliar, the Jobs to be Done framework is a great foundation for understanding how to talk to your visitors about what matters to them, rather than what matters to your company.

D — Distinctive Point of View

Especially if you’re dealing with trending headlines, you may worry that you’re losing potential subscribers due to the prevalence of competing articles on the subject. After all, a determined user could probably search for and find another article on the same subject that isn’t locked behind a paywall. It only takes a few seconds.

For those users, they may need some additional incentive to get the content from you. Assure visitors that you’re going to cover the topic, unlike any other publication. That way, they aren’t just paying for the toplines; they’re getting additional context and a distinctive point of view that makes headlines more meaningful.

Here are some examples of language that hint at the publication’s unique perspective:

• “Fiercely independent journalism.” - The Atlantic
• “Award-winning, British perspective.” - The Telegraph
• “Incisive analysis on issues that matter.” - The Economist

Paywall content hierarchy example

Here’s an example of a paywall offer that includes key elements. This is The Economist’s paywall before working with The Good.  (We’ll show you our improvements in just a minute.)

How to Optimize an Online Media Paywall Experience

Now that you understand how a paywall works and how they are structured, you are probably wondering how to optimize your paywall strategy.

We can apply a strategic, optimization-focused approach to paywalls just like any other element of your site. Define goals, craft hypotheses, and run experiments. Let’s walk through the process, using our work with The Economist as a case study in the process.

Step 1: Define goals & constraints

Before starting any website optimization initiative, it's important to set your goals and acknowledge your constraints. This will help you determine whether your changes push the needle in the right direction.

In the case of our work with The Economist, their goal was to improve their in-line paywall conversion rate by 3%.

The Economist also had two constraints that limited our testing. First, we couldn’t change the mechanism. We couldn’t switch to an overlay or sticky banner because they already had other elements in those places. We also couldn’t adjust the timing of the offer.

Second, we had to keep advertising revenues intact. Since The Economist earns revenue through ads, which require page views and dwell time, we couldn’t make any changes that increased the bounce rate or prevented users from exploring more pages (and seeing ads).

Step 2: Conduct the research & create a problem statement

Before designing tests, the next step is the research phase. At The Good, we make use of a number of data collection and analysis tools. We recommend having at least a few of these generative research methods in your tool kit:

• Data Analysis
• Heatmap Analysis
• Heuristic Analysis
• Moderated Usability Testing
• Over-the-shoulder observation
• Customer Service Interviews
• Competitive Analysis

Step 3: Define a problem statement

After exploring your data, the next step is to define the problem using a problem statement. A problem statement summarizes the problem we’re trying to solve. It usually takes one of these two forms:

• Users [are doing x], indicating [problem].
• The paywall [does what], causing [problem].

In the case of The Economist, we saw a clear pattern of user behavior that we turned into three problem statements. They are similar but slightly different.

• Users are not scrolling far enough on the page to see the value proposition, offer, or additional benefits, indicating the paywall is too tall.
• Users fail to scroll much past  “You’ve reached your article limit,” indicating they may not know how to proceed.
• The paywall text may fade too early, causing confusion and abandonment before users can see calls to action.

Step 4: Craft a hypothesis

The problem statement only describes what’s happening now. To guide experimentation, we need a hypothesis. A hypothesis is a testable, tentative explanation or prediction about a phenomenon, based on what we already know. We came up with two:

• Shortened vertical height and directive messaging on the paywall will increase conversions to subscriptions.
• Updates to the paywall including a shorter text fade, solution-oriented header, and layout changes will increase starts and decrease bounce rate.

Step 5: Design your experiment(s)

Once you have your hypothesis, the final step is to design experiments that meet the criteria in your hypothesis. One of the benefits of running tests on a major publication is that there is plenty of traffic to test multiple variations of the paywall. In the case of The Economist, we tested five variants.

Here is the desktop variant that performed the best:

And here’s the same variant on mobile:

Why was this variant more effective than the original paywall?

• It’s significantly shorter, so users are more likely to see it as they scroll.
• It’s more action-oriented. Instead of “You’ve reached your article limit,” it tells the user exactly what to do to bypass the limitation.
• It has the additional benefit of “unlimited access.”
• The secondary call to action increased registrations. More registrations lead to more subscription conversions down the road.

The Results of Optimizing the Paywall Experience

The results of our work with The Economist were significant. We achieved a 5% increase in subscription starts and a decrease in bounce rate with a neutral impact on advertising revenue.

Basically, we gave The Economist everything they wanted and more.

“Through (working with The Good), we were able to increase conversions to paid subscriptions by 5% without compromising our ad revenue, which was a significant return on investment and a huge win for our organization.”

David Humber, Marketing Director of The Economist

You can read more about the project in our case study of The Economist.

We saw similar results when we worked on The Telegraph’s paywall model, including a 30% reduction in same-day subscription cancellations, improved subscriber quality and acquisition rates, and increased paywall conversions. Read our case study of The Telegraph.

You can see similar results on your paywall strategy with the help of our Digital Experience Optimization Program. This end-to-end review of your buyer journey helps you uncover the best opportunities to improve your sales performance and grow your revenue.

Our program starts with an audit that goes beyond surface-level metrics to provide the most thorough review of your website possible and prepare a conversion rate improvement plan that is tailored to your business and paywall strategy.

We bring decades of collective optimization experience working with globally-recognized brands. Let our team put together a detailed report that outlines your strengths and opportunities to boost conversions and sales.

Hundreds of millions in revenue generated with our strategic optimization programs.

But don’t take our word for it. Hear about the amazing results from 15+ years in business, straight from the source.

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The post Optimizing Paywall Strategy for Digital Media (and How We Boosted The Economist’s Subscriptions by 5%) appeared first on The Good.