Elevate Recurring Billing With Free Trials & Freemium Subscription Model
Regarding recurring billing, most businesses think the only way to increase revenue is by raising prices. But what if there was a way to increase revenue without charging your customers more? It turns out there is! One way to do this is by offering free trials and a freemium subscription model.
The reciprocation effect is the psychological phenomenon that occurs when someone feels compelled to return a favor after receiving one. In other words, if someone does something nice for us, we feel obligated to do something nice for them in return. It is often seen in business transactions, where one party offers a discount or freebie to receive something of equal or more excellent value from the other party.
While this may seem straightforward, the reciprocation effect can be used in many ways to benefit your business. For example, you could offer a free trial of your product or service to encourage potential customers to sign up for your recurring billing. Or, you could offer a discount on your first purchase to encourage customers to come back and make additional purchases in the future.
Ultimately, the reciprocation effect is a powerful tool that can be used to increase revenue and build customer loyalty. By offering free trials or discounts, you are effectively creating an obligation in the customer’s mind to do business with you again in the future. And if you can deliver on that promise, you will have created a customer for life.
Habit Formation And Why It’s Important For SaaS
As a software-as-a-service company, your ultimate goal is to get customers to use your product regularly. It means creating habits around using your software so that it becomes second nature for customers to log in and use it every day, week, or month.
There are a few key reasons why habit formation is so crucial for SaaS companies:
1) The more customers use your product, the more valuable it becomes to them. It is because they become more familiar with its features and how it can help them in their work or personal life. As they use it more, they’ll find new ways to utilize your software and get more out of it.
2) Habitual users are also more likely to upgrade to paid plans. It is because they’ve already invested time and energy into using your product and have come to rely on it as a part of their daily routine. Once they see the value of upgrading to a paid plan, they’re more likely to do so.
3) Finally, habitual users are less likely to churn than one-time or occasional users. The longer they use your product, the more attached they become to it and the more difficult it is for them to switch to a competitor’s product.
Strategies To Encourage Habit Formation
There are a few key strategies that you can use to encourage habit formation among your customers:
1) Use free trials wisely. Free trials are a great way to get customers to use your product regularly, but you need to be strategic about using them. For example, you could offer a 14-day free trial and require customers to input their credit card information upfront. This way, they’ll be more likely to use your product during the trial period since they’ve already made a financial commitment.
2) Offer freemium subscriptions. A freemium plan is a great way to get customers hooked on your product. With a freemium subscription model, customers can use your basic features for free but need to pay to unlock premium features. It encourages customers to use your product regularly to see the value of upgrading to a paid plan.
3) Use Gamification. Gamification is the process of incorporating game-like elements into your product to encourage customer engagement. For example, you could use points, badges, and levels to reward customers for using your product regularly. It will encourage them to keep using your product and share their progress with friends and family, which will help you acquire new users.
4) Send reminders and notifications. Another great way to encourage habitual use of your product is to send reminders and notifications to customers. For example, you could send an email reminder when a customer hasn’t logged into your product for a while or notify them when there’s a new feature that they might find useful.
5) Make it easy to use. Finally, it’s essential to ensure that your product is easy to use so that customers stay energized and keep going. It means having an intuitive design, clear instructions, and helpful customer support.
Using these strategies, you can encourage habit formation among your customers and turn them into long-term, loyal users. Book a demo with SubscriptionFlow to see how you can implement all these strategies to take your business to the next level.