What Is A Typical Conversion Ratio For A B2B SaaS Business From Free To Paying Users?
The typical conversion ratio for a B2B SaaS is 3%. Apps and devices median conversion rate is 6.2%, Online Media - 3.4%; Ecommerce platforms - 3.3%; Analytics - 2.9%; Cybersecurity - 2.6%, Business Software - 2%; Data & Infrastructure - 1.8%. Source: 2021 Conversion Benchmark Report from Unbounce.
It's impossible to know exactly how many people on average convert from free trials to paid (as that data is maintained by companies), but anecdotal evidence suggest 1-3% is quite normal for most B2B SaaS.
How to improve your SaaS B2B conversion rates from free trials to paid users.
Before figuring out how to increase conversions, it helps to know which medium is responsible for the highest conversions. You may have guessed it - Email.
Based on a sample of nearly 4,600 companies, the median email conversion rate for SaaS companies is 21%. Social at 5.6%, and paid search at only 2.0%.
Knowing this, we can formulate a blueprint to get more people through our B2B sales funnel. For instance, we may want to focus efforts on sharing valuable information on LinkedIn, or using simple lead magnets via paid to get people into our mailing list. Once on the list, we can nurture them with information and eventually convert them into a customer.
Of course, all of this only gets you people who try the software but not necessarily purchase it. Let's look at how to actually convert those free users to paid ones:
B2B Free-to-Paid Conversion Strategies
There are multiple strategies you can try to increase your conversions for free trial-to-paid. Each would require its own A/B test as that's the only way to guarantee a lift in conversions.
Take credit cards up front.
This is a bit of drastic measure and one that you might want to save for later, but it is not unreasonable for companies to require credit card numbers on trials. A study by Totango, a research company, concluded that conversions were 50% higher for companies who required CC numbers, but lead-to-flow ratio was 5x less (2% vs. 10% who didn't require a CC).
Personally, I think this would make for a good A/B test for a month to see what happens.
Limit trials to 7 days instead of 14
Limiting trials to 7 days creates a bigger sense of urgency for new account registrants to get set up and see the value of the product. With 2 weeks, people often try to sign up just to be distracted by something and leave. They feel that they have more time to get going but end up forgetting to come back. Trials create a sense of urgency, thus getting people to complete their setup faster.
Offer a discount if they enter their CC before trial expires.
You could incentivize people to plug their CC earlier in exchange for a small discount. Even B2B companies are looking to save when considering all of the other tools in their tech stack.
Offer personalized onboarding + assistance
Roll out the red carpet for your customers and offer to set everything up for them, or to guide them on a live call. This could be a great chance to form a relationship human-to-human and put a face to the otherwise faceless product. By assisting your trial users 1-1, you can create a strong connection which increases the chances of them upgrading to paid.
Not only that, but you can also make it super easy for them to roll over their data or get their account structured to maximize benefits.
Obviously, this will only work for companies who are just getting started and can afford to spend the time on 1-1 relationships. As you scale, this may become an impractical strategy.
Implement guided onboarding that gets them to see instant value in your product
Use tools like HelpHero to guide the trial user through setup. This will get them set up more quickly, reduce your support tickets, and create for a better user experience which is more likely to translate to a paying customer.
Create a short to-do checklist
Checklists are a great way to get people into a product and set it up to the point where they start seeing value. Humans have a tendency to want to complete whatever they started and a checklist helps them take that extra step.
You can use tools like Appcues or HelpHero to create checklists that people will want to complete:
Tip: When the user enters a dashboard, leave one step already completed so they feel they've made progress without even trying.
Set up a drip to send trial members case studies of successful customers.
A ProfitWell study found that B2B willingness to pay went up by 15% after people were exposed to case studies of similar companies.
Tip for sending case studies: Send them from a person's email address instead of automating. Once you scale, go ahead and automate, but make them as personalized as possible with a human face and name on each email. Allow people to hit reply to reach that person directly, and be sure to follow up asap.