
Every Step Costs You 20% of Users - gaborcselle
http://blog.gaborcselle.com/2012/10/every-step-costs-you-20-of-users.html
======
edanm
My favorite example annecdote: when signing up to pay for Dropbox, I got
pretty far along the tunnel. I think after giving Credit Card details, but I'm
not sure. At that point, I was presented with a choice: "Pay monthly ($10 per
month)" or "Pay Yearly ($8 per month, paid in advance".

Being faced with this question, I decided to think about it, then left the
page and didn't sign up. I did end up signing up a while later, so maybe this
doesn't mean anything, but I could definitely imagine not remembering and
ending up never signing up.

And all they had to do to was add another option: "Sign up for monthly billing
($10) per month. Don't worry, you can later convert to a year and start saving
from that point".

~~~
gaborcselle
I think Freshplum is a YC startup trying to solve exactly this problem for
online retailers / subscription services: <https://freshplum.com/>

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porter
I wonder what the averages are for users of business software. Lead to trial.
Trial to customer. Paying customer to active user. It would be interested just
to get an average of how many dormant paying customers there are for web-based
subscription apps. I know I am a dormant customer for at lease 3.

~~~
patio11
This is a "How long is a piece of string" sort of question. Want just rough
SWAG numbers?

Lead to trial: 5% (high touch sales, high integration costs for trial) through
20% (self serve trial)

Trial to customer: 1~2% (online self serve SaaS), 30~50% (online self-serve
SaaS with CC captured upfront), 80%+ (high touch, high integration coats, good
sales team aggressively working new accounts)

Dormant customers: Very dependent on users and business practices of company.
At AR it is about 15% or so. It would be higher but I sweep accounts once a
year and self-terminate anyone I can't get in touch with.

~~~
zrail
When you say CC captured up front, do you mean just requiring a credit card to
activate your account, or actually automatically charging when the trial is
over?

~~~
dchuk
usually when you take CC up front you also automatically charge at the end of
the trial. It's a good way to reduce tire kickers in your app, but can result
in lost users at the top of the funnel.

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Alex3917
In addition to losing 20% or so users at each stage of the funnel, the bigger
picture is that most startups closely follow Zipf's Law, e.g.:

* Hacker News has (hypothetically) 300,000 unique monthly users.

* Of those, 30,000 have an account.

* Of those, 3,000 submit at least one comment or story over the course of the month.

* Of those, about 300 are regular contributors (at least 5 comments and/or story submissions per week).

I don't know what the real stats for HN are, but I doubt that is very far off.

~~~
chewxy
wat. Those are variables that shouldn't even be on the same axis.

What you can do is to code those variables as 'levels of involvement'. Then
maybe you may have a zipf's law distribution.

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mikebo
How are you measuring the app store pageview -> install step?

~~~
gaborcselle
People that don't have DrawChat yet get invited with an SMS that contains a
link to a page on our server. That page redirects you to the App Store. So we
know how many people see our App Store listing.

On the other side, Apple provides you daily download numbers, which you then
compare to the "first app open" counts on Flurry, Localytics, or your
analytics provider of choice.

We can differentiate people who came to DrawChat organically vs. through
invites by seeing if they had an invite waiting after sign up.

~~~
mikebo
That makes sense. Just wanted to clarify that you weren't able to measure your
organic app store pageview -> install conversion. I thought I had missed some
hidden feature in iTunes connect, which is definitely possible.

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sftueni
Is having a forced Facebook login necessarily a bad thing? Sure, the sign-up
rate might only be 50%; but if it's inherently a social app, it'll pay of with
a richer user experience once the user is 'signed-in with his graph'. Of
course there are many apps that simply abuse the social grap for viral invites
only - that sucks. But there are also apps that are just more fun - if they
can overlay / provide access to the social graph. At the end: Every app
attracts the users it deserves; those who appreciate it and those who don't.
As an app developer, if my app is worth the trust of a social graph, I'd
rather have the users that appreciate it.

~~~
gaborcselle
Good point, Facebook login might cost you in the middle of the funnel but help
you at the end.

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Shenglong
You can likely mitigate the drop off at the signup stage quite drastically by
first creating value, then asking users to sign up.

Signing is a conscious decision on part of the user to accept the possibility
that your app will spam their wall with achievements and updates. If you ask
them to take the risk before you show them why they should, it's natural to
expect such a large drop off; I've personally deleted several apps because of
it.

~~~
gaborcselle
On the other hand, having an sign-in-less "Explore" type experience may
actually hurt your signup conversions. Users get a feel for the app, decide
that they'll sign up later, close the app, and never come again.

I might be hallucinating but I think Instagram used to have an "Explore"
screen with interesting pics pre-signup, and in the latest versions they got
rid of that.

~~~
Shenglong
You may certainly be correct, but part of your viral coefficient is likely
driven by continued usage of your application. As such, I guess there are two
ways you could go about it:

1\. Spam user's social network on sign up; 2\. Send out periodic blasts about
progress/offers as the user continues using the app.

The first method will likely net you terrible reviews and negative sentiment,
while for the second, an exploratory mode wouldn't really hurt you. The key
would be designing exactly _when_ and _how_ the sign up should be. For
example, maybe after 5 days or 5 app opens (whichever is more), the app loses
functionality until you connect. It'd be different for every app. For games
(or gamified aspects), you could just incentivize sharing.

~~~
gaborcselle
On the iOS platform, you want to be very careful about timing when you ask for
the push notification permission. which you'll need it for scheme 2.

One newbie mistake on iOS is to ask for notification permissions right after
install. This is very similar to your point about signing up: You have to
build some trust with the user first, then ask to notify them.

~~~
Shenglong
I meant socially, not for push notifications. Since, after all , the goal is
to engage more users. You don't need push notifications here at all.

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by_Seeing
"Only 90% of of the people who download your app will actually open it - I'm
guessing that people are stockpiling apps for the impending apocalypse."Hah!

~~~
udit99
Or attention-span-slippage caused by slow app downloads. Happens to me all the
time.

~~~
bduerst
Or load time/time to engagement. Sometimes I'll just dump an app if it throws
up registration screens within 20 seconds of opening it.

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tucaz
I find it amusing that the title claims that the cost is 20% on every step but
the article itself says that the value varies and is not unique for every
business. What's the point of choosing 20% in an arbitrary way like this?

Following this line of thought we could rename the article to "Every Step
Costs You 50% of Users" if we chose that case as the example.

~~~
gaborcselle
Quoting it as 20% kept the title concise while sacrificing very little
correctness.

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taigeair
At Kera we're only limiting users to people with google accounts so it's
interesting for me to read:

"completion rates as low as 50% with forced Facebook logins, while another one
allows signing up with different methods (username/password, Facebook,
LinkedIn) claims completion rates of 90%"

Do you have more information on this?

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taigeair
At Kera we're only limiting users to people with google accounts.

You mentioned "completion rates as low as 50% with forced Facebook logins,
while another one allows signing up with different methods (username/password,
Facebook, LinkedIn) claims completion rates of 90%"

Do you have more information on this?

