$200 per new account businesses might imply, in a card-not-required-upfront model, 2% conversion rates on $4 trials which have converted at 25% from $1 clicks. Or, in a card-required-upfront-model, 25% conversion rate from trial, $10+ clicks.
I re-endorse this math, with the elaboration that $10+ clicks was me being handwavy about $12.50.
I was not challenging the experience behind the maths, just I don't quite follow the formula
I think that the above means 2 out of 100 trialists will become customers and 1 out of 4 people who click on a ad will become trialists. So with 200 clicks we will get 50 trials and then one payin customer
If the trial costs us 4 USD in hosting fees that means we pay 200 bucks (50x4) for the trials, and 200 bucks for each 1 dollar click through (if that's how click throughs work).
So that seems to be 400 bucks to acquire a customer. This could be changed in so many places (cost of hosting etc) that the actual figures aren't really important - just trying to follow the rough proportions
As you can tell my uncertainty on how click throughs work indicate I am trying to understand the landscape - not challenge your experiences.
I am however very surprised that click to "free trial" is such a big conversion (25%) but after that they can't be bothered to go further. My takeaway from this, completely at odds with what I would have guessed last week, is to always take a credit card at sign up. Anyone who can be bothered to open the wallet is probably really interested.
And if they don't open the wallet, grab that email :-)
Tl;dr I believe you. I just don't quite follow the details - and that's where the devil lies I am told.
Comments
Apologies for the delay -- been a long day.
$200 per new account businesses might imply, in a card-not-required-upfront model, 2% conversion rates on $4 trials which have converted at 25% from $1 clicks. Or, in a card-required-upfront-model, 25% conversion rate from trial, $10+ clicks.
I re-endorse this math, with the elaboration that $10+ clicks was me being handwavy about $12.50.
I was not challenging the experience behind the maths, just I don't quite follow the formula
I think that the above means 2 out of 100 trialists will become customers and 1 out of 4 people who click on a ad will become trialists. So with 200 clicks we will get 50 trials and then one payin customer
If the trial costs us 4 USD in hosting fees that means we pay 200 bucks (50x4) for the trials, and 200 bucks for each 1 dollar click through (if that's how click throughs work).
So that seems to be 400 bucks to acquire a customer. This could be changed in so many places (cost of hosting etc) that the actual figures aren't really important - just trying to follow the rough proportions
As you can tell my uncertainty on how click throughs work indicate I am trying to understand the landscape - not challenge your experiences.
I am however very surprised that click to "free trial" is such a big conversion (25%) but after that they can't be bothered to go further. My takeaway from this, completely at odds with what I would have guessed last week, is to always take a credit card at sign up. Anyone who can be bothered to open the wallet is probably really interested.
And if they don't open the wallet, grab that email :-)
Tl;dr I believe you. I just don't quite follow the details - and that's where the devil lies I am told.