I've launched a new software program. The basic function is each customer imports their own data into the system. That data can then be shared with the other customers using the software in order to increase effectiveness of their research. As each customer joins, the value of the shared data increases exponentially. I'm very close to getting my first non paying user on the platform which I landed through my powerbase. I've offered to let several other customers use it for free during a "beta test" period until their fiscal year for budgets arrives (July of 19).
My thought process is that I build credibility by having active users and amassing the shared data. In addition, I can get feedback to improve and fine tune the product as well as get some good testimonials which will help with future sales.
The cost to let them use the system for free is very minimal compared to what the future revenue will bring if they purchase a license in July '19.
Am I on the right track with this thought process?
Thanks for your help.
Good question Brian. I am always a fan of a free trials or even better, the free tier. The later you have to watch out as you could be stuck a situation where you can't convert people to the higher tiers, but all in all what you are trying to do is show people the value your product provides and the best way is to have them see it with their own eyes. Once the user sees the value your product brings them then they will easily jump on board to becoming a paid customer. Also, be sure to get feedback from your users, especially ones who convert to paid customers. You could interview them or survey them understanding what value they got out of the product, but the paid customer provides the best insight, none paid can sometimes have you chasing your tail! Good luck and keep hustling!
Hi Brian. If there is perceived value in shared data and that value as you say actually grows exponentially I'd say focusing your user base first is the right way to go since the costs are minimal. I've done this before in two companies (one that ended up in bankrupcy, and my current one in which we succeded). I'd be wary about a few things along the way:
- Make sure you talk to your customers (potential customers in this case) every day.
- Make sure to validate your hipothesis that the perceived value actually grows as you believe.
- Don't take the "budget for FY" as a valid answer. If this is something that solves a big problem for them and you are providing 10x the value any other solution is, then you should be able to convert them in less than 12 months.
- Don't think your expectations of revenue are correct. They are not. Until you've talked to over 100 potential customers and signed a few, you have no idea of the willingness to pay for your product.
Tread carefully, but I do think this is the right approach. Good luck!
I have been in your shoes. similar project where I had to give trial runs for people to appreciate a system. I would say the cost is necessary for your exposure. It will build customer Confidence. Take on the free-trials and account for it as Marketing expenditure. All the best. you are free to call me for more advice. Im glad to assist. Is there any prior experience you have had with referral marketing?
Yes! Free trials always work very well.
I would also pump up this free trial period too by implementing a simple referral feature. So current users are enticed to share with their friends & family. This way you can easily double and triple your results at the very least.
I'd suggest googling: how drop box and paypal were able to grow their customer base very fast with referrals.
I'd love to help you on this project.
If you need my help I'm always one call away.