Getting random people from the internet to buy your product is hard.
So any time I see a strategy that makes that easier, I sit up and pay attention.
The other day I got an email from Michael Hyatt’s team that made me pay attention. Michael and his team have a membership site called Platform University. And twice a year they open up enrollment for the product.
Membership typically costs $37 per month.
However, after their recent launch ended, they offered a $1.99 trial to anyone who didn’t purchase during the launch.
1. PlatformU normally sells for $37 per month.
2. They normally open up enrollment twice a year for 1-2 weeks.
3. After the last launch closed, they sent a special offer for a $1.99 trial to those who didn’t purchase.
4. Once the 1-week trial ended, the membership automatically converted into the $37-per-month plan.
Note: Obviously, if you wanted to opt out of the auto-convert offer, you could.
Here is the email they sent out:
Check this out…
Out of the 40,000 people in the PlatformU sales funnel that didn’t buy, 819 signed up for the $1.99 offer.
Of those 819 people, 292 cancelled their auto-convert option.
Which means that 527 new members were added at $37 per month.
And this is where things get crazy…
At $37 per month, that’s an additional $19,499 of monthly recurring revenue (MRR).
Since their average member stays for 17.3 months, that’s a lifetime value of $640.10 per member.
Add all of that up and that will produce an estimated $337,332 in revenue from a $1.99 trial offer.
How can you do the same thing?
What is your product?
Do you have a course, app or book? If so, there is no reason you can’t try the same strategy.
In fact, I challenge you to do it. Test it and see how it works for you.
You don’t even have to wait for your next big product launch. Just send an email to your audience today announcing a $1.99 trial of whatever product you have sitting on your shelf that you’ve been too afraid to launch.
Will everyone convert into a full paying customer? No.
But will the majority of them? 75% of Michael’s did!
Shortly after writing this article a few weeks back, we launched a brand-new product, Slingshot.
After the launch was over, we decided to try out the trial strategy to see how it would work for us. So, the week after the launch ended, we sent out 1 email announcing the trial and 1 email expiring the trial.
Here’s what the launch sequence looked like:
Here is the email we sent announcing the trial:
And then the next day we sent this email ending the trial:
Results: 202 people signed up for the $1 trial and 38 of those people converted to $500-per-year customers.
That’s a total of $19,000 in additional revenue.
On the surface, $19k seems like a substantial amount, and it is. However, the $1 trial sign-ups and the conversion were a good bit lower than I would have forecasted.
Here are a few thoughts on what I think caused that:
Thought #1: A $500 price point (Slingshot) vs. a $37 price point (Hyatt’s membership site) makes a BIG difference in conversion rates.
We were very up-front with people that the trial converted to full-pay annual plan. That being said, the $1 trial did nothing to soothe the objections of people who just didn’t have $500 to spend on the product. What would have adequately addressed these concerns would have been a monthly payment plan.
Thought #2: The #1 objection to buying the product wasn’t price.
Which is odd as that’s always been the #1 objection people have had to buying any product I’ve ever been part of selling. In the case of Slingshot, the #1 objection people had was that they wanted more templates. They wanted templates that covered book launches, launching products without an audience, launching membership sites and so on.
So the $1 trial did nothing to handle this objection. In fact, if anything, it only made it worse because people who took the trial were annoyed that there weren’t more templates in the app.
When you combine these two factors, you get a super-low $1 trial conversion rate of 0.3%.
However, for the future, here is what I advise. After your launch, send out a survey and ask people why they didn’t buy. If their #1 objection is price, do a $1 trial. If it isn’t, don’t.
PS: I’m going to feature 3 people on the VF blog who actually implement this strategy. (Details below.)
Footnote: All of these revenue and launch numbers were shared with permission of Michael and his team.