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Five Signs to Recognize a Future Customer

Roy Tomeij on

Like many services, we offer a 30 day free trial. A credit card is only needed after the trial ends, but we generally know within a week who will become a paying customer. Here’s what we’ve learned about recognizing a future customer.

Massive conversion funnel

These free trials come without strings: you can use the product for thirty days, without ever choosing a plan or entering a card number. This makes it a no-brainer to give your or our app a try, but also makes for a massive sales funnel. At any time there are going to be tens or hundreds of people at some stage of their trial period. Those large numbers provide great insight into some Key Conversion Indicators, with this being our top 5:

0: Pre-trial questions

Often customers, mostly those that anticipate ending up on a larger plan, ask questions before starting their trial. They want to judge your responsiveness and support before committing to telling their entire team to use your app as part of their daily workflow. When customers start a trial based on the conversation they had with you, that signals commitment. While we labeled this “step 0” because it isn’t part of the actual trial period, it says a lot about the odds of them becoming a future customer.

1: Not using @outlook.com

As a B2B service, we need companies to sign up. It’s why seeing people use their company domain for email is a good indicator of being serious about it. Sometimes we get lucky with people using the Gmail.com domain, but we have never sold anything to someone using Outlook.com. Accounts created with disposable addresses we tend to terminate a few days in, assuming there hasn’t been any activity.

At AppSignal, customers can also log in using their GitHub account. Those convert even better than company email addresses, probably because the link to GH adds some extra functionality.

2: Engaging with your product

The only time people ever are going to pay for your product is when it provides value. To provide value, most apps need their trial customers to actively use it. In our case for example, we provide no value when we don’t receive raw data to process. Pushing data means that someone was invested enough to go through our on-boarding process. Even though it’s pretty easy to set things up, it still takes more effort than filling out a form and clicking a button.

The more data, the better. It helps us with providing better (weighed) metrics and graphs. Your app will likely have other engagement indicators. If you can measure the difference between “no engagement” and “any engagement”, that’s a good start. From there, create ways to distinct various level of engagement. Some customers will create an account without ever being active, and we’ve learned that trying to activate them hardly ever works.

3: Connecting third party services

You know your product has become part of a customer’s workflow when they start making you an integral part of their process. Products like ours tie into issue management systems and team communication tools, and it requires trust to allow us to add things to an external service on a customer’s behalf. Becoming part of their daily routine is a great way to become “part of the team”.

4: Being responsive

We all try to welcome new people, check in regularly to see how things are going, and point out features they have missed (because your tooling tells you they haven’t done X yet). The latter we have automated, but the rest is manual labor. That allows us to have an actual conversation about their business, instead of using generic wording. It takes a lot of time and effort to read up on their business, and only a portion of all trial customers send a reply. Well worth it though, because you learn so much about the people using your product. Those who do reply though are likely to become paying customers, and those combining #2 and #4 have about a 90% chance of converting.

5: Bringing on the team

As with many SaaS, it only takes a single person to start a trial, but an account can be shared by many people. For us, the size of a team using AppSignal directly relates to the chance of becoming a paying customer. After all, every team member multiplies engagement. Larger teams means more invested people and better conversions.

It helps when multiple people are made account owner too, because they receive emails about choosing a plan, billing and payment issues. More recipients simply means a higher chance of emails being read, and a bigger chance of someone choosing a plan.

Science and gut

You should judge any combination of the above by experience, though you could build a tool that takes into account all variables pertinent to your business to come up with a Conversion Scoreā„¢ (startup idea, anyone?). You may not need a sales team or account managers. Keep a mental note of all of the above, and just know who’s going to be that awesome new customer.

Photo courtesy Orange County Archives, licensed under CC BY 2.0.

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