Getting fired by your trial users

I was in conversation with startup founders who seemed very enthusiastic. They had the niche covered well, revenue model worked, TAM, SAM, SOM numbers on fingertips and in the pre-revenue raise process.?

While I was peeling the layers to understand their business, model and unit economics better, I discovered that they had scores of trial customers signed off but none of them chose to be part of the system as soon as they turned monetisation on. The full picture of what was happening in this startup is another story, however I think the idea of turning trial customers into paid customers is important for all startups and hopefully the following ideas will be helpful.

1. Choosing your trial customers: It is always easy to go with someone you know but they may fall in the category of FFFF ( founder, friends, family or fools i.e the ones who are invested in you emotionally) . They are great as your source of reference and inspiration but if your offering is not relevant for them they may not give you significant business and of course you don’t want to be ripping them off for something they don’t want or need. You should go for the likely ones that may be the true beneficiaries of what you have to offer. At an early stage of business the customer feedback is very important/
2. Choosing the right price:?It is always a challenging topic particularly if you have something new and there is no reference when it comes to price. There are various ways you can come of with the price but this is a separate ( and lengthy) conversation for other time ( drop me a note if you want to talk about it now). Start small. You can always offer new features and/or raise prices but dropping prices may signal falling quality.?Bowmans Strategy Clock?is a good read on the topic.
3. Grandfathering:?I have encountered a number of online products where a practice of letting initial customers ( who are your champions) keep using the product at old pricing plans while the new pricing ( higher) is introduced for new customers. That way you can price discriminate easily.
4. Customer get customer:?Remarkable notebook uses this strategy well when it asks their happy customers to send a code to their friends and family for their product and if they sign, both get a discount.?Remember the discount code always accompanies word of mouth recommendation - causing network effect which is unparalleled.
5. Fine-tune your assumptions:?Choosing the initial customers can also pave the product journey into the future particularly if they will provide you with feedback which will feed into your development process. These trial customers will also make a road map of your own entrepreneurial journey. Be mindful of this paradigm when you chose them.
6. Use Friction carefully:?I really hate products where the price is discombobulating and I have to provide lot of information about myself to sign up. I am also reluctant go give my credit card details just to try something out. Friction at any level puts off buyers. If there is value people don’t mind paying for the service once the value is confirmed. If you get poor quality food after a long wait in a queue you will be disappointed. Reducing friction and making easy to buy is important.?Do not assume that your quality is up to client’s expectations. Ask them and look into what feedback and data is telling you.?
7. Risk Management from customers viewpoint:?For a new product or service it may be difficult for your users to fully understand what you have on offer. They will need to invest their time and energy to learn something new. What if it does not work for them? Is there a recourse. Can you give them a guarantee of 100% satisfaction or full refund.?Do you maintain the same level of commitment if they want to stop using your product. I was using an online software when I tried to unsubscribe. Process was a complete nightmare. Needless to say, I will not vouch for it, nor I will use it later.??

Startup journey is challenging, startups fail but good entrepreneurs don’t . They go from venture?to venture without losing enthusiasm.

If you want to share your experience regarding a challenge and how you managed to onboard your trial users please drop me a note or share in the comments.

If this can help another founder please do share it.?

Reference: Customer Creation Process?Steve Blank and Bob Dorf- Startup Owners Manual.