Challenge: A case study in paying prospects for a trial experience
Blog Note – this is an edited version of a longer write-up.
Summary:
Many companies rely on a free trial experience to drive prospect engagement. I had this very experience at with a company, a journey that took 18 months.
The objective was to drive the target buyer into a 14-day free trial (which, at the time, influenced more than 70 percent of closed-won business). Marketing’s goal was to dramatically increase the quantity of trials at the same conversion level while closely managing the cost of customer acquisition.
We experimented with a $25 Starbucks gift card offer for installing the trial as well as attending the daily demo. By tying the incentive to both the trial and demo, prospects would see the product capabilities and try it out for themselves in rapid succession in an attempt to drive that “a-ha moment” when the prospect clearly sees the value to them personally and to their company.
To evaluate impact of this offer, we broke this down in phases. First we tested it as a one time email offer to our database, then identified mechanisms to automate both the offer and card delivery in select channels like our integrated nurture process and finally expanded to an offer on our website to dramatically scale the offer. And after 18 months of great results, we eventually pulled the offer – and this is the story of that journey.
Evaluating Results
First, the team sent a one-off database email with a split test comparing a basic trial offer with no incentive to the offer of the Starbucks gift card, requiring both trial installation and daily demo. We measured impact on both click thru rate (CTR) and form completion rate. Email CTR increased by 3x (.9% to 2.7%). However, in order to qualify for the gift card, the prospect had to fill out two forms – the trial and the daily demo. When comparing the single trial landing page conversion rate with the rate of those completing both forms, the completion rate went from 68% for the trial alone to 42% for both forms. Digging deeper, the trial form completion rate was identical (68%) – so the subsequent demo registrations represented a net gain and therefore was viewed as a cost-effective promotion (and down funnel conversion rates remained unchanged). Net – 3x increase in CTR with the same trial landing page conversion rate with incremental increase in daily demo registrations. After 4-6 weeks, the down funnel conversion rates were comparable to non-incentivized trials.
With this proven one-time offer, the team evaluated ways to expand the reach of this offer. The decision was to run an A/B test of the trial incentive in our ongoing integrated email nurture. The trial was a middle of funnel (MOF) nurture offer to prospects who met quality scoring thresholds. Again, the results were positive. The CTR for the trial alone was 3.9% versus 10.6% for the Starbucks offer with similar landing page results above. However, now we had instrumented an automated delivery and fulfillment of this offer – so we dramatically increased trials while only rewarding for success events – namely participation in daily demo and trial campaigns that were highly correlated with closed-won business. But we only made this offer to qualified prospects who entered the funnel from a variety of other marketing programs. And with automated fulfillment, there was minimal additional labor required from the team. But could we do more?…
Next, the team examined if it was possible to further broaden the offer but still maintain high down-funnel conversion rates. At that time we implemented a website conversion optimization technology called BounceExchange (BX), which detects web visitors ready to abandon and raises an offer via a pop-over window. BX would make the Starbucks trial incentive even more broadly available to some/all website visitors. We added the Starbucks offer to BounceExchange with great results: the website trial CTR increased from 1.72% to 2.48%, a 44% conversion rate bump. With our growing website traffic, this had a tremendous impact on our trial conversions, driving over 4000 incremental trial conversions at a CPL of approximately one-tenth of paid search campaigns.
Remember that the offer was designed such that the $25 incentive would be delivered only if the prospect were to both download the trial and attend the daily demo. So the team felt really good about top of funnel results. Looking down funnel, for the next 12 months, we saw a consistent ~20% MQL to SAO conversion rate for these trial offers – consistent with non-incented trials. Finally, putting an ROI lens on this offer, it increased cost per opportunity by $125 ($25/.2) – staying within our cost-per-opportunity target.
Incentive EOL
Alas, the good times did not roll on forever. Over time, two developments led to our halting this offer. The first was an erosion of conversion rates, which happened gradually. We suspect that there may have been saturation of the offer with our target prospects. Second, we encountered fraudulent postings to this offer beyond our target audience. While we were able to respond quickly to limit potential expenses, the time required to monitor and correct these offers represented ongoing support by resources that could be focused elsewhere. So approximately 18 months after the start of this journey, we removed the offer.
Lesson Learned
Incentives to drive the right prospect behavior worked well for a while and supported scaling at a key time of company growth. Designing both the offer and automating fulfillment were key. However, as with many marketing campaigns, great programs have an end-of-life and should be constantly and closely monitored.
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