Episode Transcript
[00:00:00] Speaker A: 95 of your freemium users will never pay you, and right now, you're making exactly zero from every single one of them. Today's guest, Michael Gantz, built Encore, an SDK that turns those paywall rejections into revenue. And he saw an opportunity that most SaaS founders have never spent a single day thinking about.
[00:00:22] Speaker B: They clicked through a few screens and what they saw so far wasn't enough to get them to pay in that moment. But this is still an extremely warm lead, and there's still an opening to conversion them. Your premium version of your product is your best sales tool.
[00:00:35] Speaker A: His solution is simple. Get brands like Disney BetterHelp and Capital One to fund your users premium trial instead of you.
[00:00:44] Speaker B: So we took someone who was going to just leave and be gone forever, and now we have them. You know, that three month trial paid for by another brand like Disney Plus. You're making money immediately from this user. Plus after that, they're going to automatically convert to paid.
[00:00:56] Speaker A: In one case, a brand sponsor paid an app over $250 for a single user, someone who had already clicked no added paywall. That's more than two years of that user on an annual plan. But the money isn't even the most interesting part.
[00:01:12] Speaker B: If right after you decline, they say, okay, we'll give you half off, you're undermining the value of your full price product. What we're doing communicates confidence. It's like, hey, we know you're going to love premium. We're going to give you more access for free.
[00:01:25] Speaker A: Today, Michael breaks down why gifts beat discounts and how to find that magic moment that finally converts your fence sitters. And why this Playbooks works just as well on a $30 a month B2B CRM as it does on a meditation app. Let's get into it. I'm Victor, and this is SaaS mastery. Michael, in one case, you got a brand partner sponsor to pay an app over 200 bucks for a single user, a user who had already said no thanks at the paywall. That's more than the app would have made from two years of that user on an annual plan. Before we get into how, what's the single biggest misconception that SaaS founders have about the users who don't convert?
[00:02:07] Speaker B: I think the biggest misconception is, okay, we tried and it failed. I think that's the way people think about these customers is we did a bunch of ads, we got them through the funnel, they didn't think our product was worth it. And that's actually not true. They're clearly interested in the concept of your product. They probably don't fully know what your product does. And what I mean by that is maybe they saw an ad and they have some sense. But you've been working for years to build amazing features in Premium. They don't have that context. They have a few seconds of time they spend thinking about your product. They click through a few screens and what they saw so far wasn't enough to get them to pay in that moment. But this is still an extremely warm lead and there's still an opening to convert them. And so what we say, you know our product or not. So somehow, some way, get them to try premium. Your premium version of your product is your best sales tool. Get them to reach whatever it is. That's that magic moment, right, when they actually see your features in action in their life and don't feel like you've lost them until you've gotten them to that point.
[00:03:05] Speaker A: That's gold right there. So let's get into that. Just before that, just brief background on you. Harvard economics, Stanford mba.
You consulted at Insight, that's Clayton Christensen's innovation strategy firm. You worked at Dodge Capital, which is a hedge fund, and now you're building Encore. That's an SDK that turns paywall rejections into revenue using brand sponsored offers. And it's backed by DraftKings Village Global as Reid Hoffman's fund. And so with that wonderful intro that you made, it was really exciting. I'm really excited to dig into this.
Why 95% of your users leave and you do nothing about it. Right. How gifts beat discounts as a conversion strategy. And the part I'm most interested in, really how any SaaS founder, including B2B, can apply these freemium conversion principles to their product. And so you've said something that stuck with me. Most app founders have never spent a single day thinking about what happens when someone clicks the X on that paywall. Right. They obsess over product, they obsess over acquisition. Get new users in the door. But the 95% who are already in there. Right. You said it. They're interested, but they still say no. Right. People don't optimize for that. Walk us through how you discovered that this was the biggest untouched opportunity within apps.
[00:04:29] Speaker B: Yeah. So the main way we found this opportunity was actually by building in a consumer company ourselves.
So out of Stanford, I started an AI shopping assistant with a friend of mine and we actually went out and built these brand relationships with Disney plus Paramount, all these top brands and said, we have people who are shopping with our Chrome extension. While they shop, we want to, you know, get them to try your product. We can time the offers at a really good time for them. And, you know, we got a lot of conversions on that. A lot of people willing to try free trials of these, these brands that gave us exclusive discounts. And we were making, you know, sometimes over a dollar a day per user without the user having to pay anything out of their own pocket. And so we saw through our own experience how powerful these gifts from brands are. These exclusive offers from brands like DoorDash, UberEats, you know, Paramount plus Hulu, like these top premier brands. If you can give free stuff or a free trial, it's really compelling to people. And so we realized this. We're like, wow, we're monetizing in this, you know, insane way. Let's go to where there's already distribution. So we started going to apps that have millions of users and saying, we have these brand relationships. We have this way of giving out kind of free stuff that's timed well and we can help you monetize. And we thought about, okay, what is the best moment for that? And that's where we started talking to founders about, you know, their flows and walking through them for our own product. We had seen the same thing. You know, almost everyone in onboarding doesn't pay you for a subscription.
I'd done tons and tons of user interviews around the onboarding and I'd seen, you know, I would, at the end of every user interview for our product, I would say, do you know what the product does? And we tried, you know, 70 different versions of three screen intros. And I was shocked. And I, you know, I would recommend every founder do this, walk around, go up to someone at a coffee shop, say, this is three screens about my app. This is the intro screens. Tell me what my app does. And most of the people got it wrong. They didn't quite know what we did. And it made me think, okay, you know, almost every app in the world is taking people through these standard onboardings, and people are just confused and they're not converting. Give them a way to try premium for free that's going to be acceptable to app founders, because app founders obviously need that hard pay wallet. They want to get paid. And what we engineered was a way to try premium on one of these brands. So try Disney plus for free, and they'll pay for that user to do the premium version of your product. So you'll make the same as if the User's paying you a subscription fee, but it's paid for by one of these brands, Disney plus Hulu. All of these top brands will pay you because they got a new customer, you know, and from the user's perspective, it shifts the psychology.
Now they can get something free. You know, I wanted a free trial of Class Pass. That's amazing. I get to try any excess bus I want. Plus they get to try the premium version of your product. And then a month or two later they already know what the premium version of your product is. They're way more likely to convert to the annual plan at that point when they've already experienced your product. And so a lot of these learnings came from ourselves, like walking people through these flows, seeing the drop off ourselves, seeing no matter how much we attempted to communicate in that onboarding process, there was still some confusion. And it led us to this kind of realization, like, give someone a way to try premium, you know, and, and like any way to get them into premium is a huge win for you as a founder.
[00:07:45] Speaker A: Is, is that also how it's communicated to users? Your premium will be paid for by say, Hulu or something like that. Is, is that the way or is it more sign up for Hulu and also get, get, get premium for a month for free or something like that?
[00:08:03] Speaker B: Yeah, we, we phrase it like, okay, you know, you don't want to pay for the subscription to this product. Fair enough. We're going to give you three months for free if you take one of these free brand offers. And then once you accept the brand offer, you get both the month free trial of Disney plus and three months of the subscription you just declined. And so you get both. And we have them, you know, put in their credit card and automatically convert to paid after that as well. So as part of getting this free trial and getting Disney plus, you're going to automatically after that three month free trial, convert to the annual plan. And so we took someone who was going to just leave and be gone forever, and now we have them, you know, that three month trial paid for by another brand like Disney plus. You're making money immediately from this user. Plus after that they're going to automatically convert to paid and they're going to be happy to auto, auto convert to paid because by that point they'll have actually tried your premium product and liked it.
[00:08:51] Speaker A: They're sold. Yes, absolutely. All right, I want to dissect. That is really interesting. So most SaaS, they take a free trial or whatever that might be just as a countdown Right. Day one, day seven, day 14. Oh, your trial expires. Oh, I'll just send you your trial is ending email. And like the breakup email or whatever, but you've talked about and you just said it. Well, timed offer. Right? That's the word. That's the phrase that you use.
And so that's like the magic moment. And treating the free trial more as a premium window, not just a timer. So walk us through how that works. How do you understand when to.
When to offer the pro or trial or the gift to someone? When are they most susceptible to it?
[00:09:39] Speaker B: Yeah, we do it at the moment of decline. And that's really important because, you know, we're reaching 100% of people who declined your subscription. If you're sending them an email afterwards or push notification, you can look at your own numbers as a founder, but the open rates are 1 to 3%. So, you know, if you're trying to win someone back after they declined with an email, already you've lost 99% of them because they don't even open. And then from there, when do they open? Right. They might check their email. Two days later, they're, you know, bored at a work meeting and not even in a position where they can convert. So we meet 100% of people, and we meet them exactly at the moment they turned you down when they're considering the purchase. And I can show you a demo if that's helpful, to have a visual of kind of where we pop. Sure. Okay. So this is ahead AI therapy app with 4 million users, and they have, you know, a hard paywall. So after you talked with the AI therapist for a little bit, you have to put in your credit card or leave. And we pop up when someone clicks this back button. So by clicking the back button, they don't want to pay.
And that's when we pop up and we say, actually, we're going to give you three months of Ahead for free. If you try Capital One Shopping, Capital One will give you $10 to spend anywhere you shop, no credit card required, and they'll give you discounts wherever you shop, and they'll for those three months of premium. So Ahead is making money on this free trial, and from the user perspective, they're getting to keep chatting with the AI that they actually like talking to, and they're getting $10 from Capital One and a free product that gives them discounts.
We adjust the offers for each product, but this is a AI Therapy app. So we have Human Therapy Month, free of better help and three months of of Ahead for free and better help pays out $250 for each successful conversion. So the annual plan for ahead is $70 and you're making more than three times that just on this offer. And so not only are you making way more than three months of fees, but you're also going to get them to double click and convert to your plan. And I'll show that in one second. This is Paramount. Three months free of Paramount and three months free of Ahead. We make the sounds very simple and in app. So you haven't left the app here, you can see the apps right there. It's a bottom sheet in Safari that just pops up. We verify with Paramount that this is a legit sign up. So via API, we verify in a few seconds, yes, it's a legit user. We're willing to fund this premium trial and Paramount says yes, we're willing to fund it. Great. Paramount's now paying for this three months trial. What you see is that right here they're going to double click and convert to the annual plan. So after this three month trial of a head, they're going to convert to the annual plan at $60 per year. And so they double click here and then boom, they can go right back to chatting with the AI. Um, so that's kind of how it works.
And it's an offer that's timed exactly at that moment of decline.
[00:12:25] Speaker A: Interesting. I mean, I've seen people give discounts at that very moment.
Why does this work so much better than discounts? Plus obviously you get paid in some of your revenues, essentially somebody else's CAC customer acquisition cost. But psychologically, why does the gift work better than a discount?
[00:12:47] Speaker B: Yeah, it's because of the psychology of receiving a gift versus sort of this desperate please, please, please, please pay me. So if right after you decline, they say, okay, we'll give you half off, you're undermining the value of your full price product. Right. You're saying like, just kidding, we're actually happy to give it to you for way less. Right. And it comes across as sort of like this desperate attempt to win someone back. What we're doing communicates confidence. It's like, hey, we know you're going to love premium. We're going to give you more access for free. And we have these partnerships with Premier brands that will pay for it for you and give you a free version of their product. So it's saying, look, we know that the premium version is going to convert you. The price point stays the same. So when they do Auto convert, they're paying the standard price and you haven't undermined the price of your product. You've communicated confidence in premium. And we like to say, like, we want to activate loss aversion. So if you get a gift from, you know, a free month trial of Disney plus, a free month of class pass, and you feel like, if I leave this page, all that's going to be gone. That's good. It creates urgency around accepting this and, and entering the free trial.
So, you know, we want to create this moment where it's like, I feel like I really have to give this a try. And it's very tough to create any sense of urgency when they've already said no. The discount, it's like kind of this chasing. And instead we want to say, actually we're going to give you a concierge experience, a free version of our product, a free thing you already want, and we're confident we're going to convert you down the line.
[00:14:14] Speaker A: Interesting. I like that, because even the discount, it does activate loss aversion in a way. Right. Because it's probably temporary. But what you just said is correct where that undermines the value of your app. Right. It's like, oh, suddenly you give discounts, it's not worth that much. Right. Whereas that is a different way to pay for a price that's stable. Makes a lot of sense. And so people are generally interested in doing something like that with Disney plus or whatever, but they don't have that direct relationship with any of these big brands. That's when they would come to you. Plus get the SDK to integrate it, right?
[00:14:53] Speaker B: Yeah, exactly. And with the SDK, we basically look at your audience and we segment them. We're like, okay, this age group in this location might like this offer.
This one might like this. And we a b test all of that. So we automate AB tests for each segment of your audience to see what are the offers they actually like, what actually converts. And we figure out, out of the, you know, hundreds and hundreds of offers that we have, which one is going to convert for your audience and drive you the most revenue and the most subscription. So we do all that process for you.
And the other thing I'll say is if you do want a discount, some people are still going to say no, right? And so we have companies we work with that say, I want to do a discount first, but after they click the X on that discount, that's when Encore will pop it. So, you know, we generally say we think offers of free stuff is Stronger than discount. But even if you do discount, you're still going to have 90 plus percent of people clicking X on that discount button. And at that point, there's no harm to trying a different approach.
[00:15:49] Speaker A: This episode is sponsored by Encore. If you're running a SaaS or app and most of your users are hitting close on your paywall and leaving Encore helps you monetize those users instead of losing them. When someone declines your paywall, Encore shows them a relevant brand offer and that brand actually pays for your users premium access.
You can check them out from the link in the description right back to Michael. Absolutely. And I want to get into another thing that you said before, which I think is brilliant and that's. So instead of selling the Pro upgrade, the all in one plan that's super expensive, you can also try selling one specific feature at a very low price point. So what if I don't? What if comp sold a $99 breakup meditation pack targeted at college kids instead of, you know, just pitching the full 60 bucks a year subscription? How does that concept work? Right? Low price entry points and just sell them the exact thing that they were probably looking at right now, Right?
[00:16:57] Speaker B: Yeah, that's what we say is kind of, you know, build it off these magic moments. So identify in the product what are the moments that I can create very quickly for the, for the user that are going to feel magical. And then can I, you know, create a price point that's like, hey, you, you know, in the, you know, comm example, you told me how to break up. I just gave you a meditation that really calmed you down after the breakup. Want more meditations like this? Buy our whole breakup bundle. You know, and if we can meet you after you've already completed a 20 minute meditation, even if you already said no to the subscription earlier, you're now at a headspace where it's like, oh, I kind of get the value. Before I was like, meditation is kind of interesting. But I don't know. Now I've, I'm actually feeling better after doing this 20 minute meditation. I have a much better sense of belief in what calm can offer me. And I've already told you I have a breakup, so I'm directly going to solve the problem that I've indicated. Now calm might have a bunch of other features, you know, work out with calm or go to sleep with calm. Right. You can talk to the user about all those features later, but if you can quickly build a moment that solves at least one problem and then create a price point that's around continuing to solve that problem for them. That's very compelling, even if they've said no before.
[00:18:02] Speaker A: I think my, my biggest worry would be do I cannibalize, you know, my premium user base if I offer certain things for a very low one off price. But then this seems like it should be cheap, but it should be expensive compared to the usage you can get out of the pro plan, I assume. Right. So if you, let's say if Netflix offered, I don't know, watch this show for five bucks, which is like cheap. It's way less than their monthly plan and you're not committing to anything, but you're only watching one show. And so the, whatever, 20 bucks a month or however much it is these days is obviously unlimited. So that's still better value. Is that, do I understand that correctly?
[00:18:48] Speaker B: That's exactly right. So we advise pricing at a point where it's still a way better deal if you're a power user of your product to have the full. Right. So in the Netflix example, if I watch Netflix every day I'm watching, you know, tons of shows, that price per show is going to be really low as a power user, right. But if I'm unsure about Netflix, maybe I don't watch TV at all. And we can get you to watch one episode of a show, you know, watch the first episode of Breaking Bad. You had a great experience where like, want to watch the rest of breaking bad? It's $2. That's really compelling to someone who's on the fence. And obviously $2 a show, if you're watching tons of shows, is going to add up. So the premium user still feels like, well, I'm getting a better deal because I use all the features of this product and I pay way less than if I was paying a la carte. But that on the fence user has a much clearer sense of what I'm getting with these $2 because they've already watched the first episode of Breaking Bad. They know what Breaking Bad is. Maybe they don't watch tons of shows or tons of content or know all about Netflix. They don't need to. For now, it's enough to know I want to watch Breaking Bad. Let's. Let's pay that $2 and watch the rest of it.
[00:19:47] Speaker A: Absolutely. And so let's bridge this to B2B a little bit. A lot of SaaS companies have roughly three tiers, right? A free tier, a pro tier, like 49 bucks a month, and an enterprise plan like Contact Me.
The jump from free to Pro is already huge. Like both in price, but also in feature overload. So what if instead. And so trying to find a magic moment here, I don't know, I have a CRM or whatever is like, hey, you just used a reporting feature five times this week. Like, you actually use this. We see that for just five bucks a month, you could unlock advanced reports. If that's all you need, everything else stays free. Is that where people should go?
[00:20:34] Speaker B: Yeah, that's, that's exactly how it apply in that context. Right? You've, you've seen maybe The CRM has 100 different features, right? But you've seen the user interact with this reporting feature. So you've seen them kind of look at these reports. It's like, hey, want to keep getting these reports? Great. Well, you know, reporting $3 a month, right? And now you've gotten them to pay for at least one part of your product.
And they're much more likely to pay for other parts or to get a larger subscription once they're, you know, they have the mentality, I pay for this product every month. It's worth it to me.
[00:21:03] Speaker A: Okay. And so let's, let's continue this B2B path a little bit right now.
Most B2B SaaS, companies don't have that relationship with Disney plus or Paramount. Obviously, that's where you guys can help. But they also do have complementary tools in their ecosystem. Right. So if, you know, I run a CRM and someone declines to pay or upgrade, could I partner with like an email marketing tool and offer their trial as incentive, something like that? Or do you, do you guys offer that too? Do you do B2B applications as well? You said you have hundreds of partners in your network.
[00:21:40] Speaker B: Yeah. So we've built out a huge set of partners on the consumer side, and we're building out the same thing on the B2B side, so.
[00:21:47] Speaker A: Nice.
[00:21:48] Speaker B: So, you know, we've already gotten Microsoft as a B2B partners, a bunch of hosting companies.
So it works the same way. It's just thinking about, okay, I run a CRM, who's my customer? Maybe it's a solo entrepreneur. What other tools do they need? Right. They need email marketing, they need tools to generate leads. Maybe they need a nooks for cold calling, maybe they need slacks or teams or whatever it is. And so, you know, we power figuring out what are the complementary tools for your users, and we run a B testing around that to figure that out for you. And then what are the best ways and the best offers that are going to feel really compelling to people who decline your subscription. Like, hey, we'll give you, you know, a month of teams for free or a month of slack for free. Like, what is that offer that feels like, okay, now I'm going to reconsider and actually try a month of premium.
[00:22:35] Speaker A: I think especially, I mean, within B2B, there's probably two audiences you'd want to look at that are somewhat different. There's like the very classic B2B where you're going after a large enterprise and most people probably think it's tough to do there because they're very rational decisions makers. Although we both know that's, that's not. Not quite the case, but still. Right. How do you sell a CFO on another free trial or something else? But there's a very big prosumer segment I feel in SaaS. Right. Which is notion, canva, figma, loom. Right. They all acquire their customers through individuals first, whether they're within a larger organization or they, they're freelancers, but they, they're B2B users, but they really come from a consumer mindset. And I think they'd be super susceptible to this type of behavior. Right.
[00:23:33] Speaker B: Yeah. That's the segment that, that we're going after with B2B. Is that that prosumer so that, you know, solo entrepreneur or someone on a very small team who would appreciate, wow, two months of lovable or two months of AWS or whatever it is, you know. You know, if you're a CEO of a very small company, it matters to you to get a few months free of another tool that you really like, like Apollo. That's. That would cost you a lot of money and that, and that's really helpful to your business. So it's the same psychology in consumer. It's just a different set of offers and tools.
[00:24:03] Speaker A: I love that. It's pretty much what a lot of incubators have already been doing, which is like, you know, leave your equity with us and you'll get a couple thousand bucks with aws. Right?
[00:24:14] Speaker B: Right.
[00:24:15] Speaker A: Something like that. It's pretty, it's pretty good.
What about Churn prevention? Right. In B2B, the renewal conversation is everything. Right. Especially annual subscriptions. So when that annual renewal is coming up and you know, they're on the fence, could a partner offer tip the scales? Do you have any best practices here?
[00:24:35] Speaker B: Yeah, it's, you know, we do this for consumer apps. It works the same way. Someone, someone cancels, it says, look, I get you want to cancel. Why don't we give you Three months free of premium and we'll give you three months free of lovable or three months free of whisper or three months free of Slack for. So it's like, hey, we're going to give you a gift if you sort of level with us here. And then as part of accepting that, they double click that after those three months they're going to convert back to the annual plan and they still could cancel within that three month period. But now we've shifted the conversation where they're now automatically converting again to that annual plan in three months unless something changes and you have a lot of time to win them back. Right. Like, even if someone is canceling, it doesn't mean they've gotten the full experience of your product. A lot of, a lot of times people subscribe to things, don't end up using it a lot, cancel. They still, you know, haven't experienced a lot of the features that would add a lot of value to their life. And so in that three months, that's a time to really encourage them to try some of the features that could add value. So that's a time to reach out and be like, hey, why were you thinking of canceling?
What features have you tried and not tried? Even have someone call them and use that three month period as like, let's, let's do everything in our power to give them a good experience and make them renew, but don't lose them at exactly that moment. Give yourself some extra time and use that as a learning tool to try and win them back.
[00:25:54] Speaker A: A lot of B2B apps, I feel, although not every app, obviously it comes at a certain price point. Half sales teams, right.
How would something like that work together with a primarily sales driven organization?
Or would you say that there's probably a tier of users where you'd run an offer like this or different tier users where you'd, where you'd actually make a phone call.
What's your philosophy around that?
[00:26:26] Speaker B: Yeah, it works the same way. If you have a sales team, we would identify offers that your users find really compelling. So say your users are looking to, you know, build with Lovable, for example, or looking to get leads with Apollo. And we have that offer. We would have your salespeople, you know, try that as a way to close. Like, hey, Victor, you know, we were right at the finish line here and you sort of ghosted. If you, if you complete in the next week, we'll add in three months free of Apollo. We partner with Apollo over here. And so a way to create urgency as A gift and a way to kind of awaken some of these people who might have cold feet at the last second. Maybe they've ghosted instead of sending that fourth follow up email. Where are you? Where are you? What's going on? You know, sending a gift. Just so you know, we have this gift from this other brand that you, that we work with, that you probably love. This is the time period at which you can claim the gift. Right. It's a lot stronger than that fourth desperate follow up email.
[00:27:17] Speaker A: Oh, 100%. Yeah, those follow up emails, man.
I find it funny though, because in E commerce, this is already, all of E commerce is already doing it. Like purchase offers, partner brand promotion Everywhere. Right. But SaaS and Apps seems to be somewhat of a new concept. So that's, that's really interesting and I think we see that it works right in E Commerce. Again, whether B2B or B2C doesn't matter.
And the more exciting to see that finally come to SaaS. So if you were advising a B2B SaaS founder right now, say they have a project management tool, 30 bucks a month or 15 per user, let's say 3% trial conversion rate. What's the first experiment you tell them to run?
[00:28:07] Speaker B: Yeah, I would say, you know, first of all, look at your numbers and look at what percent are clicking X on the paywall, right. If you have 95 to 97% of people who are clicking X, I would treat that with a lot of urgency. Like look at how much, look at your funnel, look at how much your cost of acquiring one user and getting them to the paywall is and at least start quantifying that. Like every week we spent this much getting people to the paywall who didn't pay. Right. Like I would have that as a, as something you're tracking internally and start coming up with ways to reduce that. And you know where one way to do that, there's other ways as well, right? You could try a bunch of different stuff at the paywall. You could try different ad messaging that maybe converts people and gets them to understand what the product is. You could try different intro screens to get them to understand. You could try like different lengths of free trials. But I think every, if you're looking at, I'm paying tons of money and 95% of people aren't converting, you know, that should be your main focus until you can start to improve that number and start to get your head around it. And when I was a founder, one of the biggest things was just going out and watching People go through my funnel, like, or showing people an ad that I was running and saying, okay, watch this ad. Now go through this funnel. Okay, do you know what the product does? Do you know how it would help your life? What's an example of a use case you can think of? And I think, like, seeing people react in person was really illustrative for me. And I would say, like, if you have any way to, you know, talk to your ICP in person at a conference or whatever and show them, this is the ad, this is the flow, this is the paywall. Look at their face when they react and see what. What you can notice, because that was the most informative for me is like, I felt like, gee, I'm so clear. This ad is so clear. This flow is so good. This paywall is perfect. Right.
And we all feel like that as founders because we're so familiar with it. But you have a few seconds to get this buyer to understand what your product is. And probably they're not getting a full sense in that timeframe. And so I would, as a founder, be obsessed with that flow. Add onboarding, screens, paywall, and just over and over and over again user testing that.
[00:30:11] Speaker A: And what you also said, finding that happy path for the customer, for every customer segment, getting them there and showing them that paywall right there and then when they have their first sort of achievement. Right, right. I think that was really gold. And then, you know, how can we push you over the edge if you. If you don't. If you're not fully convinced yet.
I love that. If you.
Oh, actually, that was my last question. Interesting. Good. I'll run the outro.
Unless there's anything else that you feel we should have talked about.
[00:30:48] Speaker B: Yeah. One thing that I think is important is we think of ourselves as sort of scientists on your paywall. So we structure everything as an A B test. We never just say, okay, on the X, we're going to go in and do these offers, and it's going to boost your revenue. We know it will, but we structure it as an A B test so we can show you what the revenue new lift is. So we'll always say half the people who click X will see our offers and we'll do a bunch of testing on which offers, and half will see the email or text or nothing. Whatever your flow is currently. And we give people a dashboard, hey, this is how much revenue you made from the people on our side of the A B test. This is how much revenue you made on your side, and we show what that Revenue lift is.
And so that's how we structure it because we're very confident that we're going to our side is going to win and we're going to boost revenue. We don't take any money for the first 60 days. So we just run this a B test for free. We show you what the revenue lift is, the end of those 60 days. We say, do you want to keep having this revenue lift? If so, keep working with us and we'll take a small percent. But I would say, whether or not you're working with us, do the same thing, right? Like on the X, have two strategies of winning people back and start to AB test yourself. Maybe one strategy is push notifications, one strategy is text or one strategy is email. Or you know, we do email both times but different copy. Like I would be running those AB tests internally. Whether you work with us or not, all the time, there should always be at least one a B test on that X. Half the people see this attempt, half the people see this. And if you're not a B testing on the X, you're, you're missing a huge opportunity. You're not even giving yourself the chance to find something that could drastically improve your unit economics.
[00:32:21] Speaker A: Yes, I think, I think you're spot on here and you're doing exactly that. You are giving people a taste of the pro version before they pay.
[00:32:31] Speaker B: Right.
[00:32:32] Speaker A: Which is brilliant. Michael. This was a conversation I think a lot of founders needed to hear. The 95% problem isn't, you know, just a mobile app problem. It's not just a purely B2C problem. It's, you know, people just don't understand what they're getting problem. Right. And the playbook gives over discounts, converting at that magic moment, modular pricing, partnership funded trials. That definitely applies whether you're selling a meditation app or a CRM. So thank you so much for breaking this down.
Super insightful. Where can people learn more about you and Encore if they're interested?
[00:33:11] Speaker B: Yeah. Encorekit.com and happy to talk to any of your listeners and just walk them through, like give them feedback on their flow, say, okay, we've looked at tons of onboarding. This is what we think is working in your onboarding, this is what isn't, you know, and I'm happy to take a look at, here's what we're doing. When they click the X.
We've seen a lot of different win back techniques that we've tried or that we've seen clients try. So always happy to give feedback to anyone who's watching the show and take a look at what their flow is currently and see if I can help improve it with them.
[00:33:40] Speaker A: That was a great one from Michael. Here are my three takeaways from this episode. Number one your 95% problem is not a product problem. The people who didn't convert aren't saying your product's bad, they just never got to the moment where it really clicked for them. It's a very different thing. It means the opportunity is still there. 2. Gifts beat discounts. Dropping your price. The second someone says no tells them it was never worth the full ask. A brand funded trial though, keeps the price intact, adds value on top, and actually communicates confidence in what you built. And then number three Timing is everything. Not an email two days later or a push notification I'll swipe away right at the moment they click X. That's your window. And most founders let it close without doing anything. So if you're a non technical founder in the process building a SaaS, watch this video where I break down my step by step process on how to build a profitable SaaS. Thanks for watching.
