Wednesday, October 29, 2014

Achieving Paid Product Conversions In a Freemium Model - BuzzSumo Reflections

My apologies to those following the BuzzSumo story as it's been a while since I posted here. We launched BuzzSumo Pro at the start of September and it has been a busy few months. I wanted to update you on progress and outline some of the things I have learnt from the launch of our first paid product including 6 tips on converting paid customers below.

We now have over 40,000 registered BuzzSumo users on the free service, however, what is critical for us now is the number of paying customers. So what has been our experience of paid product conversions.

Freemium Danger 1 - Free Users May Never Be Paid Customers

It is no easy thing to convert users from free to paid users, in fact in many cases it is impossible as the free customers may simply not be the customers for your paid product. In our case the paid BuzzSumo product is aimed at agencies and larger companies thus we were not anticipating converting individual users to the paid plan.

In starting out on a freemium route you need to be clear whether you are aiming to convert free users to paid customers or using freemium for another purpose such as brand awareness. In our case we have a free product, partly because we believe in giving back through free tools, but also because it is an alternative to paid marketing. People are more likely to use and share a free tool which will help generate brand awareness. Whilst some customers will convert from free to paid, the majority of our free users are not the target market for our paid tool and hence will not convert.

A number of individuals really like some of the functionality of the paid product and have asked if we can unbundle some features which they would like to be able to buy separately rather than subscribing to one of the larger plans. This is something we are considering and a key consideration in any freemium model is what features sit within the different paid plans and the degree to which you unbundle..

Freemium Danger 2 - People perceive and position you based on the free product

In some ways the biggest difficulty when you launch a new paid product is simply getting people to know what your new product does and the benefits it can deliver. The real danger, as we have discovered, is that people continue to think of you in terms of the free product they know. Thus in the case of BuzzSumo, despite adding a rich range of new functionality, not least content alerts for tracking and monitoring, we are still seen by many people as just a search engine to find most shared content.

It is understandable that people will in the short term continue to see you as they have experienced your freemium product. I think it does call into question some aspects of a freemium model. It seems to me the richer and more powerful functionality will always be in the paid product; and the free version will be simpler or more restricted in some form.Thus what most people experience will be a very limited product experience.

The very existence of a free product can damage the brand value and perception of your paid product. In some case this has led companies to withdraw their free product. Others have recognised this issue and deliberately played down the free product. Mattieu, the CEO of Mention, said they stopped advertising their free plan prominently when they recognised the devaluing nature of the free plan.

There is an argument for separate product brands for the freemium and paid versions. However, separate brands negates one of the brand benefits of the freemium model namely widespread awareness and usage. There is little question you get more users in a freemium model, we have signed up over 40,000 freemium users since the start of the year.

Our Progress

I should be clear we have been selling our paid product for less then 2 months, so my experience is limited. However, we have converted over 150 companies to paid plans in the last 6 weeks and I wanted to share my initial thoughts and tips.

Freemium Conversion Tip 1 - Get people on a trial of the paid product

In a freemium model it is essential to market and establish the additional features of the paid product and the benefits it delivers distinct from the free product. The one obvious way to do this is to give people a free trial of the paid plan. We were reasonably successful in getting people on to a trial version of our Buzzsumo Pro plan.

Freemium Conversion Tip 2 - Most people don't use the paid product during the trial!

In our naivety we thought we were being very successful as we managed to get a lot of people on to the free trial quite quickly. We thought this was the best way to sell the features and benefits of the new paid product. What could be better than people simply using the product?

However, most people simply don't use your product much during the free trial. They may not have the time and even if they do have the time they don't understand how to get the best out of the product. They also will not use many of your great features, even if you highlight them. I was genuinely surprised when talking to users after the paid product trial about how little of the product they had used. The question "How did you find the alerts?" was often met with "What alerts?". Thus they were not aware of one of our most powerful features despite using the product for a period of weeks.

This brings me on to tip 3.

Freemium Conversion Tip 3 - Get people on a webinar 

In our experience, the absolutely best thing you can do is to get people on a webinar or demo. If you can get them for 20 or 30 mins you can demonstrate very clearly how your paid product works, the key features and the real business benefits it delivers. In our two months so far, we have a much higher conversion rate with people that attend our webinars. My key advice is to get people on a webinar. I really liked the Intercom approach of offering a discount on their product if you attended their webinar and we are thinking of doing something similar so important are webinars to conversions.

Freemium Conversion Tip 4 - Use Intercom

I am not paid by Intercom,  nor I have any investment in the company but it is a great tool. With Intercom you can track what users do and send regular in-App messages to encourage them to try features they have not yet tried. It is by no means as good as a webinar but it is a very helpful feature. There are also many other good reasons to use Intercom to manage and support your users but this is a feature I particularly like.

Freemium Conversion Tip 5 - Have an onboarding process

We are currently experimenting with different onboarding processes including taking people through a number of key set up steps to get them familiar with the product during the trial period. This definitely helps though I would suggest you try to force users onto a webinar or training course before they use the product. I have been impressed with how Hubspot do this to make sure you know how to get the best out of their platform.

Freemium Conversion Tip 6 - Provide use cases as well as training

As with all tools we tend to get much more out of a product if we receive some training. Thus it is essential you offer training and individual webinars to people trying your product. You also need to offer a lot of support materials as we do on the BuzzSumo Knowledge Base, but make sure these include common use cases rather than simply go through functionality. Functionality is only helpful if it supports a real use case which helps people understand the benefits.


I hope these reflections are helpful. I am conscious I am still learning and will continue to learn as we grow and develop BuzzSumo. I will continue to share my experiences for you here. I am also happy to discuss any aspects of growing a business, just contact me on Twitter @steverayson, connect with me on LinkedIn or via our BuzzSumo Twitter, LinkedIn or Google Plus pages.