Changing Harold's pricing strategy from free plan to free trial

published on 16 September 2021

Context

When I first launched Harold, I offered a 10-day free trial. I thought it was the perfect strategy. Until I looked at the numbers: 0 conversions.

It wasn't until I accidentally triggered the paywall to all users on day 4 (whoops) that I got a couple of conversions. So I experimented with trial length. I experimented with copy. But the conversion rate was still very low.

I realized this also had another negative impact on my business. Once the free trial ended, I lost all my users! I could no longer measure retention meaningfully because the "n" that stuck around was so low.

This meant I couldn't test one of the biggest assumptions—that people would stick with it long-term. It worked for me, and a couple close friends, but I wasn't sure if it would work for the average person that isn't emotionally invested in the products success.

So I changed to a "free forever plan" with 1 habit with the option to upgrade to $4/mo for up to 3 habits. With this structure, I had about 6% of users buying the 3 habit plan right off the bat (I've identified these users as "experienced trackers" who understand the value right away). But I still didn't have ANY converting from free paid to paid plan.

Why was my conversion rate so low with both trial → paid and free plan → paid approaches?

Probably many reasons, but I have two hypotheses:

  1. My conversion flow is not optimized. I'm really only advertising it within the SMS experience and I'm not advertising it very often or with any optimized marketing techniques. Turns out—because of this—many users were simply missing the call to action to upgrade. They said they are used to quickly replying to Harold and skimming their recaps. They aren't necessarily taking the time to read every detail. Hard to convert if they don't even see the option to! This can be fixed and optimzied.
  2. New trackers or people who have tried tracking before and failed just aren't willing to pay for a habit tracker, they don't care enough. This can't be fixed and isn't great news for Harold's future.

So what next?

Obvious next step is to test these hypotheses. The only real way to test number 2 is to test number one first. If I optimize the conversion flow and new and skeptical trackers are still not converting, then I think 2 may be true and I need to reevaluate my life 😂

So, I could try an experiment where I optimize the conversion flow. Maybe I advertise/push the paid plan in an email drip instead. (I probably should have done this from the start). But there is still one thing holding me back—without a dashboard to easily add and manage your habits, this conversion flow from 1 habit → 3 habits is kind of clunky.

The flow would be:

Existing User sees marketing material → clicks "Upgrade to Add more habits CTA" → Enters payment info → goes to typeform to add new habits.

A couple problems with this:

  • CTA is not very compelling I would prefer add habit → upgrade as opposed to upgrade → add habit
  • I would prefer add habit → upgrade as opposed to upgrade → add habit
  • No easy way to see the habits you already have when adding new ones
  • All habit set up happens in typeform, it works—but it's clunky

Conclusion

For these reasons, I've decided to move Harold to a free trial until I have an interface for creating/ managing habits.

A few trade-offs I'm making:

  • (-) Decrease in active users
  • (+) Easy to manage/less overhead - less plans to manage
  • (+) Can focus on my power users
  • (+) Hopefully higher conversion from free → paid because the flow will be more straight forward

It's hard to say what the right strategy is at this point. The free forever plan allowed me to have enough users to validate my riskiest assumption about retention. Now my riskiest assumption is that I can create sustainable growth and a healthy conversion.

Lower overhead will allow me to focus on growth, and a free trial will allow me to test my conversion with an optimized (rather than clunky) flow.

And if you saw my last tweet thread, you know my new strategy on pricing is to make my best, least risky, and most manageable guess on pricing and focus on growth until I can experiment.

My Ask for You

What do you think? What would you do? Do you have a better strategy? Let me know!

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