Roberto Robles is a head of a successful SEO agency and a founder of KatLinks — a SEO-related tool that helps startup founders improve their SEO metrics and rank better on Google Search. Roberto also issues a newsletter Rankmakers.net that covers all SEO-related topics and delivers them to your inbox once a week. You can follow Roberto on Twitter @robertodigital_
For us, freemium was not an option. Katlinks.io uses a lot of API data consumption and costs money. If I had a free plan, even a very simple one, it would cost me about a couple of dollars, or a little bit more per user per month. So it is simply not sustainable financially — because as a bootstrapped founder, I’m very revenue-focused. Maybe big software tools or VC-backed startups can get away with that, but for indie-makers it's not financially viable. On the other hand, if I had enough resources to burn, I would definitely go with a freemium. Why? It just takes longer for SEO-related tools to start making any visible impact. If I could keep a free user stick around longer I would definitely gain from that and my free-to-paid conversion would probably improve.
So, my advice to every founder: before choosing what to go with (free plan of free trial) consider the following aspects:
because of the ongoing costs. And I mean, it's not just the data consumption. You also have to support a lot of people for a long time when these people are not paying. So you also have to take that into account.
- the cost of infrastructure — if customers consume a lot of it, offering a freemium is not an option
- the cost of ongoing support — even if your customers don’t consume a lot of infrastructure you will have to support free customers as well as paid ones. Do you have resources for that? Or can you build a workflow that allows community support or self-help of some sorts?
- How long does it take for the service you’re offering to start making a visible impact? The longer it takes the better chances you have with a freemium.
When I first launched KatLinks.io, I went with opt-out. Then I started getting a lot of feedback from people who were like, I want to try the software, but I don't know you or I don't know your software, so I don't want to give you my credit card. And it kind of made sense, right? I'm not a famous person that people would just immediately trust and put their credit card in. So I decided to switch to opt-in instead, and obviously the sign ups went up immediately.
So, the general advice would be: if you have a strong personal brand you might probably get away with the opt-out option. People would trust you and your product from the get go. If you don’t have a wide social presence, better go with an opt-in framework. At least, you’ll have some users, and you’ll be able to analyze their behavior and work on improving your free-to-paid conversion.
When I launched KatLinks.io, I did not have a very impressive conversion rate. I obviously started wondering how I can improve it. Someone suggested a tool that allowed us to create in-app tours for the news users — you know, when you first sign up, some services show you around and explain all the relevant features and sections with the pop ups. I tried several of them but it did not make any significant difference. It remained like this until I realized my mistake. It was not about the tours. It was about the fact that when new users signed in they were redirected to the dashboard with not a single piece of data. It was an empty canvas and they immediately lost interest in the tool.
We implemented a change in the onboarding flow: now when you log in first or when you sign up for the trial, the first thing I ask you is your domain. Once I have it while they're signing up and getting to the dashboard, I'm already pulling information: how many pages they have their backlinks, I'm running a page audit for their homepage, I'm also finding if they're already ranking from some keywords organically. So when they hit the dashboard, hopefully they have some data (depending on how big the website is obviously, if it’s something very new and very small the dashboard will still be empty as there’s no data to pull). But if there’s something that should be interesting for the user. And once they're there and they have some data, then they might see the tour that will explain what they can do with this data, they are more eager to take it a step further.
So my advice is: you might use onboarding tours but track data on what people are doing with them. Do they actually take the whole tour? If they don’t and still convert — you’re doing great. But if they lose interest in the tour and don’t use the tool — you probably need some additional steps in the onboarding that would allow users to see the value of your service straight away. The most obvious step here is to offer ready-to-use templates or pre-populate your service with their data.
Let’s be honest — there are simple ways to increase free-to-paid conversion rates. For example, offer a huge discount or a life-time-deal and limit the time for the offer. Even better — put out the timer that would count down the days or hours until the end of the deal. This will definitely kick in the FOMO effect (*FOMO = “fear of missing out”) and you will get more conversions than before. We tried this about a year ago. We had a 14 day trial. And then sent out a message: if you upgrade in the first 48 hours of the trial, you get a 30% discount. When users logged in, they hit the dashboard and they saw a timer right there in their dashboard that said “upgrade in the next X hours and get 30% off”. It did make a difference, and almost all of the upgrades came in a couple of days of them signing up.
But what we also got is a big increase in churn. People upgraded because they did not want to miss a discount. But they were more likely ending up with not using the service at all. Did the discount devalue the tool in some way? I don’t know. But it definitely looked that way.
I would recommend thinking twice before implementing solutions like discounts and LTD that are very short-term focused. Do it only if you absolutely have to. In other circumstances work on the onboarding and customer behavior analysis that will allow you to shape your processes in a way where customers would get the most value from your service. If they upgrade because they like the service they are less likely to churn than if they upgrade because they don’t want to miss a deal.
This is the most important question for a founder to ask and find the answer to. It’s tough for SEO-related tools. Because honestly, in our industry customers start seeing the value and get this “Wow” moment when they see their website start ranking for their keywords. But truth be told, in general it takes from 3 to 4 month to see the difference. Therefore, my goal is to convince users to stick around long enough to start seeing the results.
I’m trying various tactics here. For example, one of the first steps in the onboarding tour is to actually get user’s keywords into the Rank Tracker. Because when they see their website and see their ranking, they go like “Oh, my website is showing up”. And they want to improve the results when I show them that it’s doable. Also, when we start finding their backlinks, that's also something they like. And recently we added a chart that shows how their overall backlink acquisition strategy is performing. So they can see how many backlinks they've gotten in the last X days. What I’m saying is that the important part — to keep showing some progress. At least, little moves upwards. That is what makes a service “sticky” and motivates customers to actually use it. If they do it for 3 months in a row, I have a hypothesis that they will be long-term users as they will start getting really valuable results from the tool.
So, the general advice is to work hard on locating this “wow” moment for your customers. And then work on getting them to it. If the time-to-value is long you’d better split the user journey into little steps and try to figure out where you can lead them to small wins. If you manage to lead them from one little win to another little win, it will create the consistency of usage, and eventually, reduce churn.