Converting Monthly Paid Users to Annual subscribers

There are 30,800 SaaS companies in the world, 8.93 million mobile apps targeting

376 million business  in the world

but all these apps want one thing - Recurring users

They want users to come back again and again and pay them

More than monthly payments, there is a demand for converting the monthly recurring users to annual users and this is why

• Immediate Cash Flow: Annual billing provides a significant upfront cash inflow, which can stabilise revenue streams and improve financial forecasting
• Reduced Transaction Costs: Fewer transactions mean lower processing fees and less administrative work related to billing
• Commitment Reduces Churn: Longer commitments may reduce churn rates as customers are less likely to switch providers mid-term

Here is a step by step data-driven approach to convert more monthly users to annual users

This is the game plan to start converting monthly users to annual

1. Identify the triggers
   1. Time when Churn started flattening out
   2. What is the product usage benchmark for annual and monthly users
2. Identify the accounts for target
3. Prepare
   1. Ease of Upgrade Process
   2. Pricing Strategy
   3. Communication
      1. Channels
      2. Content
   4. Concerns
      1. Tickets resolution
      2. NPS Scores
   5. Additional Features
4. Approaching clients
   1. Use case approach
   2. Automated email approach
   3. Highlight Savings
   4. Features Highlighting
   5. Social Proof
   6. Incentivize
   7. Feedback
5. Automation
   1. Avenues of automation
6. Track
   1. Track the conversion
   2. Track the objections

Identify the triggers

The first step is to identify the triggers that will help us understand when to approach for converting to annual contracts.

• When did the churn started flattening out?
• Product Usage Metrics
  • What is the frequency of login to the product?
  • What is the frequency of consumption of the product?
• Account Usage
  • How many users on the account?
  • What percentage of users are active on the account?
• Benchmarks
  • What was benchmark in accounts who upgraded to annual?
  • What was the NPS score on these accounts?

When did the churn started flattening out?

This trigger is to identify when retention started flattening out

It is important to know this because once you know when the churn has stopped that is exactly when it is a good time to pitch for moving to annual

If the retention graph looks like this, you will see that churn has stabilised from month 6 onwards

Hence pitching for the annual plan when the user is in 6-7 months makes more likely to do so

If you try to do it early there is a chance that they have not got value yet and are not ready to commit

Product Usage Metrics

Here we need to understand the benchmarks about how power users or high-paying users - use the app

- How frequently do they log in?

- What are the top features they consume and at what rate?

Knowing this will help in understanding who is more likely to be dependent on application and convert to paid

Account usage

Here we need to understand the average team size of users and benchmarks of the same

- What percentage of users are active on the account?

Benchmarks

Build benchmarks on annual vs. monthly accounts to see who qualifies for the same in monthly accounts. These benchmarks will help you in the next section to understand the triggers for identifying the accounts

Identify the accounts

• Based on the triggers identify which accounts are suitable for pitching annual subscription
• High usage accounts
• Accounts who have already spent time with the system and are getting value
• Compile the accounts that
• Keep this as a Monthly or quarterly exercise depending on how fast you can get the data

Prepare

Once we have the list of accounts ready for target, the next step is to prepare for the communications before approaching clients

Here is the checklist for the same

• Build a one-click upgrade process
• Calculate the benefits for each account and have one figure ready, for example, an account with 10 licences may have a different saving number than the one with 1 licence, the higher the number you can share, the faster the conversion process can be
• Communication channel to use - at least we should use a combination of 2 channels to ask for an upgrade
• Picking the right person to talk to in the account - so the email goes to the decision-maker
• Ensuring all the open tickets for the accounts are closed
• Ensuring the bad reviews or feedback have been addressed before approaching the client
• Identifying the set of features that they are not using and that they can use to get more out of the service you are offering as part of the Annual upgrade.

Approaching the Clients

Once you are ready with the preparation, here is the checklist to execute the same

• Setup email automation to the target accounts to upgrade in 1 click
• Ensure you highlight savings in the email
• Try to get 100% open rate by sending 2-3 emails with different subject lines who have not opened the first email
• Follow up in other channel in 2-3 days after they open the email but not upgrade
• Take note of all the objections of not upgrading as feedback for business
• Maintain the accounts upgraded and track of accounts who went from monthly to annual