Stuck at $$$ MRR with 50% free conversion rate, tips?
I'm building a survey builder tool for a client with some pretty good success so far. The selling point is basically getting paid responses in less than an hour from vetted panelists, great for quick hit R&D and much faster delivery than other companies.
We're getting thousands of visitors per week and have over 50% conversion rate (surveys created) for free users, but close to 1-3% on paid plans and buying responses. Goal would be to bring that closer to 15% next few months. Product works great, we had researchers and uni students from popular schools give us great feedback but we are stuck in 3 figure MRR.
Tried these already and saw some incremental improvements:
- Introducing limitations behind paywalls
- Reiterating landing page / copy
- Reducing UX friction
Part of the problem is that we are getting a ton of gen z / alpha users who just want to have fun sharing polls with their friends but there is no reason for them to convert in this current iteration of the product, CAC is close to $1 so we just keep at it. Another issue is that the branding / landing page is pretty weak so there's not a good amount of trust being built from the get-go, but I doubt that's the core problem.
I might be missing something so having another pair of entrepreneurial eyes would definitely help. Numbers show great potential but not 100% sure where to go next, any help would be greatly appreciated!
Basically 500 free answers per account I create.
You should a/b test:
Honestly I think you free offer is too much to take this seriously
What's even the niche that needs more than 500 responses?
If you need/want to target larger customers you can remove self onboarding and do demos and sales calls for larger B2B deals
Removing free accounts seems to do the trick for a lot of startups, might try that.
Are you talking about the 500 free responses under the business plan or the free 100/month * 5 forms?
5 forms
100 responses per form
~3% conversion from freemium to paid is actually decent by industry standards. but if you are looking to boost your average LTV (lifetime value per customer), removing free all together could be worth experimenting with (as others have mentioned), or at least playing around with severely limiting free. The freemium model imo is good for VC funded startups who want to prioritize growth now and monetize later. But for indiehackers its all about getting revenue early so we can bootstrap our own growth! #killthefreeplan movement!
Sounds like you're attrqcting different groups of users. Some might be more profitable segments than others. (Like GenZ/Alpha vs others).
Have you considered talking to them?
Get on quick 15min calls with 50 of your users.
Ask them open ended questions about problems they're looking to solve and why can't they solve it otherwise.
Then tell them "Hey so I'm thinking of adding a small $5/mo payment plan to keep this stuff running. What do I need to improve so it makes sense to you to become a paid user?"
The amount doesn't matter, willingness to pay is.
Collect the 50 responses.
Analyze deeply.
The answers are there.
I have a few thoughts about implementing a paywall to restrict free access. Does it actually make your product better or worse for your customers? I can imagine one situation where creating a paywall might be beneficial: if the free portion of the product is consuming too much resource and is not sustainable. A paywall would allow paying customers to enjoy better service because there would be fewer people stressing the free version of the product. However, in your case, the problem seems to stem from your audience inherently not wanting to buy your product. This isn’t necessarily because your product is bad; they might believe the currently offered features should be free. I think a few strategies could improve this situation. Focus on the customers who have paid for the product, study why they pay for it, and further improve their experiences. Meanwhile, don’t neglect the free tier customers; can they help you generate revenue in indirect ways? For instance, they could share your product to generate more leads, or you could display ads for additional revenue not directly from the user. It will be difficult to argue, for example, that if Facebook's sole purpose was to charge users a certain amount every month to use their social network, people would be willing to pay. Yet, Facebook still makes a huge amount of money from people using their product for free.
I agree with the others to an extent, removing the free option will def increase your conversion. But I also think it may be worth exploring how you can monetize the free users like ads or something similar that would display alongside the survey.
Premium users would be exempt from it of course.
Ultimately depends on how you want to grow your business though.
Jim, there are a few levers to pull. If you're getting 3% and want 15% then: