CRO for SaaS: A Proven Framework To Improve Conversion Rates

SaaS Marketing
Last Updated: November 12, 2023 8 min
Justin Berg
Justin Berg

Founder of Rock The Rankings

Getting right-fit visitors to your website is only half of the challenge.

The second challenge, and where it gets real?

Actually converting those visitors into demos and trial signups.

This is the sticking point where many SaaS marketers struggle and rather focus on simply adding more traffic, where conversion rate optimization could go a long way to have a direct revenue impact, without the need for more traffic.

In this article, we’ll dive into the specifics of CRO for SaaS, and a simple framework to begin the optimization process to drive more trials and demo requests with your current traffic.

Understanding CRO for SaaS

Conversion Rate Optimization Essentials

Conversion Rate Optimization (CRO) is a systematic process aimed at increasing the percentage of website visitors who perform a desired action on a web page or within a web application.

Looking at CRO from the marketing website perspective, the desired actions for SaaS businesses will generally include:

  • Trial signup %
  • Request demo %
  • Account activation %
  • Trial to paid %

CRO involves gathering and analyzing data to understand user behavior, how they interact with a website or application, and identifying factors hindering the conversion process.

This information is then used to formulate hypotheses and design experiments to test these hypotheses, ultimately leading to data-driven decisions that improve conversions.

To optimize conversion rates, generally you’ll be looking at:

  • A/B testing on design elements and copy
  • Personalizing content for different user segments
  • Streamlining the user experience
  • Utilizing analytics tools to track user behavior and performance metrics

Importance of CRO in SaaS

In a SaaS, CRO is particularly crucial due to the subscription-based nature of the business model, and is often overlooked by many marketers.

The need to consistently add more traffic and visitors to the website, vs. optimizing for the existing traffic and improving conversions is too often overlooked.

As for many businesses, acquiring new customers is significantly more expensive than retaining existing ones, making retention a high priority for SaaS companies.

Additionally, the Pareto Principle suggests that the majority of revenue comes from a small percentage of customers, making it vital for SaaS companies to optimize conversions and grow their user base.

CRO in SaaS focuses on two main areas:

  1. Acquisition: Attracting new users and turning them into paying customers. This involves optimizing landing pages, sign-up flows, and product demos to increase conversions and lower customer acquisition costs.
  2. Retention: Ensuring existing users continue to use the service and maintain their subscriptions. This can be achieved through providing value and a positive user experience, as well as offering timely support and engaging product updates.

What Are Good Conversion Rates for SaaS Businesses?

The conversion rate for a SaaS business refers to the percentage of users who transition from casual visitors to free trial users or paying customers.

There are three primary conversion rate categories in SaaS businesses: free trial conversion rate, freemium to paid conversion rate, and demo to paid conversion rate.

1. Free Trial Conversion Rate

A significant portion of SaaS companies offer free trials.

Businesses offering free trials should consider the following as optimal conversion rates:

  • Free trial conversion rate: A conversion rate of around 6-7% is considered good, and this figure tends to be higher if no credit card information is needed upon signing up.
  • Free trial to paying customer conversion rate: A rate above 30% is deemed satisfactory, and these numbers can increase based on the requirement of credit card details during the free trial registration.

As you climb up the pricing and ACV ladder, the % of free trial to signups will begin to diminish.

But for the vast majority of SaaS businesses, this is a good starting benchmark to take into consideration and aim for overall.

2. Freemium to Paid Conversion Rate

This conversion type is the second most prevalent among SaaS websites, wherein users can access a limited version of the service without charge.

The limitations include either the features or the usage frequency.

On average, freemium conversion rates fall between 1-10%, depending on the product offered. Therefore, rates above 10% are perceived as good.

3. Demo to Paid Conversion Rate

The least common conversion type in SaaS businesses involves users signing up for a product demo before becoming a paying customer.

Typically, demo conversion rates range from 2-3%, varying by the industry and the product pricing.

Conversion rates above 3% are considered excellent.

5 Tips to Increase Your SaaS Conversion Rate

Here are the 5 tips we have to start optimizing the current conversion rates for your product.

1. Offer a Free Trial and Promote the Benefits of It

Giving users the opportunity to try your product for free is a highly effective way to attract potential customers to sign up, and actually use the product first.

Ensure their experience is seamless by implementing these suggestions:

  • Refrain from asking for credit card details during the signup process Highlight this fact near your call-to-action (CTA) buttons.
  • Utilize a sticky navigation menu featuring a prominent ‘Start Free Trial’ CTA, keeping it visible across your entire website.
  • Offer all features during the trial and make it clear that both, testing and A/B testing are available during this period.

Leveraging interactive product demos to trigger that “Aha” moment can also be beneficial with a free trial offer.

We’re big fans of Supademo (we use them over at SimpleTestimonial) for building out product demos that help convert more website visitors into free trials.

2. Clearly Explain Your Unique Value Proposition

To effectively drive conversions on a SaaS website, it is crucial to clearly articulate and promote your unique value proposition (UVP), as it sets your business apart from competitors.

To achieve this, consider the following:

  • Begin with a headline and introductory text on the homepage to emphasize the primary reasons for choosing your product or service.
  • When discussing each feature, explain why it outdoes those of competing products.
  • Develop a comparison table that demonstrates your product’s superiority over competitors, suitable for display on both homepage and a ‘compare us’ page.

Focusing in on your USP and clearly driving that home will help your users better understand what sets your product apart from the competition.

3. Simplify and Streamline Pricing Plan Comparisons

One of the big choke points for many SaaS businesses is their pricing page.

The pricing page is a core page during the user’s journey, and the cost of your product will come up at some point.

To enhance the efficiency of your subscription-based pricing plans and assist users in selecting the best option, implement the following:

  • Limit your offering to a maximum of three plans to prevent confusion
  • Incorporate tooltips to clarify specific features in each plan
  • Specify the target audience, most cost-effective, and most popular options for each plan
  • Avoid complex jargon and technical terms, opting for simple and comprehensible language
  • Clearly display potential savings for annual payments and allow users to choose between monthly and annual billing

Optimizing your pricing page and running A/B testing here should be one of the core pages you focus on when it comes to driving more conversions.

4. Optimize Your Onboarding After a User Signs Up

Enhancing your onboarding process is crucial for ensuring customer success and retention.

The following methods can help you create an effective and engaging user onboarding experience:

  • Welcome screen: Implement a welcome screen that provides helpful tips for getting started and navigates them through the process.
  • Interactive tour: Introduce an interactive tour showcasing tooltips for essential features of your platform. This allows users to familiarize themselves with your tool’s capabilities.
  • Automated emails: Develop a series of automated emails that highlight specific benefits and features of your tool, ensuring users make the most out of their experience.
  • Inactivity alerts: If users haven’t utilized their free trial, send automated emails offering discounts or other incentives to encourage usage.

And after onboarding is complete, don’t forget the support component.

Provide comprehensive customer support through live chat, chatbots, FAQs, and “contact us” options.

Users will need support and help using your product – and it’s crucial to be there for them.

5. Fix Hidden Website Issues

Uncovering and resolving hidden issues on your website is crucial for enhancing user experience and boosting conversion rates and sales.

These less visible issues may include:

  • Incomprehensible error validation during sign-ups
  • Malformed layout on smaller devices with 375-width
  • Mega menus that obscure important content and CTA buttons
  • Layout issues on tablets due to oversized buttons or images
  • Live chat widgets obstructing CTA buttons on mobile

Addressing these problems can have significant positive effects on your website’s performance.

By focusing on improving the website experience for all visitors, you can effectively reduce friction and encourage site visitors to explore your product pages, click on CTA buttons, and complete the checkout process.

Fixing hidden website issues is key to retaining traffic and converting visitors into loyal customers.

Final Thoughts on CRO for SaaS

More is not always better, and the same goes for traffic to your website.

By focusing on converting more visitors into trials and demos, vs. putting all of your efforts into adding more traffic – you can in theory squeeze the most out of all of your past and recent marketing efforts and drive a higher number of users closer to becoming paying customers.

Need help figuring out how to convert more of your existing visitors into demos and trials?

Book a free consultation below, and we’ll take a look at your current setup, and where you’re trying to go to give you the best path forward for achieving higher conversion rates.

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