Not completely charging for it though; I’m employing a freemium business model, which basically means I give it away for free and charge the folks who want a premium version of the product. In Preceden’s case, users can add a limited number of events to their timelines (20) but if they want to add more than that, they need to upgrade for a one-time payment of $29.
I haven’t followed the numbers too closely, so I decided to spend this weekend figuring out just how well the site was converting visitors into paying customers.
Here’s the result:
There’s good news and bad news.
The good news (great news!) is that 5 people upgraded, for a total of $145.
The bad news is that only 5 people out of 316 upgraded (1.62%). Actually, I have no idea if this is good or bad. It seems bad. Regardless, I’d like it to be higher.
Until several days ago, the homepage didn’t have a “Pricing” section. I did mention the price in the FAQs, but I think a lot of people signed up without realizing that you were limited until you upgraded. A preliminary analysis of the new numbers shows that adding the “Pricing” section cuts the visitor to sign up conversion rate in half (12% to 6%). However, there should also eventually be a corresponding spike in the paid conversion rate, because everyone who signs up now should understand the limitations of a free account.
To complicate things, I also just changed it from a max of 10 events per free account to 20 events per free account. This is a tricky number because too low and users won’t add enough events to appreciate the product but too high and no one will need to upgrade. I thought 10 was too low, so I up’d it to 20. I don’t know yet how this will affect the conversion rate, and it’s going to be hard to tell whether that or something else affected it if it does change significantly.
I’ve also considered limiting free accounts in some other way (no printing?) but haven’t decided on anything yet. Another option is to lower the price from $29 to $19 but this is also complicated (what happens when the folks who paid $29 realize you just lowered it to $19?).
AdWords has been a flop so far. At $5/day, I spent $60 on it over this time period without any conversions to paid users. However, with such a small conversion rate (1.62% so far), the lack of upgrades could just be due to variance, so I’m going to keep at it a while longer.
Now that I’ve got a good system in place for measuring the affects of advertising, I’m going to experiment with some other ad programs and see how they measure up. I’ll make a follow up post in a few weeks showing my progress.
If you have any feedback, especially ideas on ways to improve the conversion rate, please let me know.