Software as Service: Get ‘Em In First or Ask Them To Pay?
By Anna Johnson on April 7th, 2010As the team here at Kikabink gears up to launch a software-as-service that has been 3 years and hundreds of thousands of dollars in the making, we have noticed a distinct trend in how leading online companies are offering software-as-service solutions.
Take a look at Salesforce.com, Zendesk.com and Compete.com to name just three such companies with rather different software-as-service offerings. Can you spot the trend?
It’s this: each of these three companies – and many others – are focusing on getting people to sign up for a free trial or version of their main product or service offering before asking them to buy the paid version of the same thing.
The underlying reasoning should be familiar to any Internet marketer who uses or has used ‘name squeeze’ pages and other list building devices:
Most prospects won’t buy your product or service on their first visit to your website;
Most prospects buy products they value, from people and companies they know, like and trust;
The best way to get prospects valuing your product or service is to get them using it… and the best way to get them knowing, liking and trusting you is to build a relationship with them;
Building a relationship with a prospect involves ongoing communication – ideally a dialogue – with them;
Getting prospects onto your email list is a great – perhaps the best – way to manage that communication or dialogue and therefore build a relationship that leads to a sale; and
Whether you offer a free version of your product or service… or you offer something else… to get people exchanging their contact details for access to your freebie, that freebie better be good!
As logical as all this sounds, going for the optin rather than the sale is still a bit scary. Are you turning away revenue by promoting your free offer rather than your paid solution?
The companies mentioned above – Salesforce, Zendesk and Compete – go so far as to make it virtually IMPOSSIBLE for you to buy anything. Clicking around each of these company’s website, its seems as though you just can’t buy anything; you have to sign up for their free version first.
That’s a little extreme to me. On the other hand it conforms with the old name squeeze framework, where people had two options and two options only when they arrived at your website: sign up for access to the site or leave.
There’s also no guarantee that a lot of free users will become customers. The ugly little secret that a lot of name squeeze page proponents never talk about is that, in some markets, people are more likely to buy on their FIRST visit to your site and NOT thereafter.
So should you go so far as Salesforce, Zendesk or Compete and force people to sign up for free before they can even buy your product?
The answer is, of course, that you need to TEST. Split-testing an entire Internet business model is cost-prohibitive and way too messy for most software-as-service providers, but if you can do it, go for it.
Otherwise, it may be worth emulating the model that so many successful companies seem to be using these days, and test aspects of it in order to make continued improvements in conversions and sales.
