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July 2007

Case Study

Simple Email Cancellation Reminder Lifts Trial Registrations 16.4%
The credit card transaction is probably the one element in an online purchase that produces the most consumer anxiety. Reduce this anxiety, make consumers feel more comfortable about providing their credit card information, and watch your conversions skyrocket.

Brooks Bell Interactive partnered with our sister company, ShareFile, an online subscription service, to test a theory we had about building trust during the free trial period. We included a simple check box alongside the credit card fields that allows the user to sign up for a reminder email that is sent to them three days before their trial ends and their credit card is charged - in effect, a reminder to cancel the subscription. Our theory, however, was that this reminder would not only reduce anxiety around signing up for the trial ("Will I forget to cancel before the trial ends and my credit card charged?") but build trust at the point of purchase, resulting in more free trial registrations. And if free trials lead to subscriptions, then more trials is a good thing.

Results: The test resulted in a significant increase in overall paid subscriptions. This seemingly counter-intuitive marketing tactic also caught the eyes of the editors at MarketingSherpa, who ended up writing a case study. The article is presented below in its entirety.

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June 14, 2007
SUMMARY
As we discovered in MarketingSherpa's recent observational study of trial offers for online subscription services, the ability to cancel before getting charged is often a confusing and frustrating process. Yet, collecting card information is the linchpin of most trial systems.

One subscription marketer hit upon the idea of adding an email reminder to notify users that their time was about to expire. But would such a system actually cause cancellations to jump, thus leading to a net loss in subscription conversions? Includes A/B test results.

CHALLENGE
“Our theory was that maybe some people are afraid of a scenario where they put in their credit card and then forget about it, and the service starts auto-billing them. With a lot of services, it’s hard to cancel, and people feel like they’ll just be billed forever,” says Jesse Lipson, President, ShareFile, a subscription-based online file transfer and storage service.

Lipson and his team had noticed a large drop-off on the last page of their free trial registrations -- the page that asks for credit card information. They wondered whether alleviating that anxiety for visitors might increase free trial registrations.

CAMPAIGN
Lipson hit upon the idea of sending an email reminder to users three days before their free trial ended, giving them ample time to cancel. But to determine the success of a reminder system, his team needed to measure two things:

1. Would it boost free trial registrations?
2. Would a reminder before the end of the trial increase cancellations, leading to a net loss in subscription conversions?

The solution was to conduct an A/B test of the free trial registration process, with and without a reminder offer. Here’s how they did it:

Step #1. Add reminder opt-in to registration page
Lipson and his team debated the best way to add the reminder. One option was simply to email everyone who signed up for a free trial and place a line of text on the registration page that explained the policy. But Lipson worried that people might ignore that, diminishing the impact of the offer.

Instead, they created a checkbox saying, “Notify me by email three days before my free trial expires,” and placed it just below the fields where users entered their credit card information. The box was prechecked to help draw attention.

Step #2. Program database for automatic email notification
Rather than make more work for the company’s account managers, Lipson had his programming team write an application that automatically searched the free trial database every night for users who had opted in for the reminder service and whose trial ended in three days.

For programmers who had built ShareFile’s entire Web-based application, the reminder tool wasn’t a big deal. “It took one of them maybe an hour to build it,” he says.

Then, the system sent out an automated email that said, “This is a courtesy reminder that your free trial of ShareFile expires on X end date.”

The message went on to remind users that their account would automatically convert to a paid subscription and offered instructions on how to cancel the free trial or change account settings. They also included a telephone number and email address for customer service.

Step #3. A/B test new registration forms
With the infrastructure in place to deliver reminder emails, Lipson and his team split incoming traffic from the company’s paid search marketing between the standard registration form and the version offering the reminder service.

They ran the test for six weeks to reach the number of trial registrations to deliver test results with a 90% confidence rating.

RESULTS
Lipson’s instincts were right: the version of the form offering the three-day reminder boosted registrations 16.4%. “It’s amazing how such a simple little box can make such a big difference.” He had his team immediately make the reminder service standard for all free trials.

Also, reminding users that their free trial was about to end didn’t hurt conversions to paid subscribers. In fact, the service *increased* conversions: 62% of free trial members who signed up using the registration form with the reminder box became paid subscribers, compared to 53% who converted after registering with the older form. “We were expecting some decrease in conversion rate, so that was the biggest surprise for us in the test,” Lipson says.

From that result, he suspects that the reminder offer helps capture users who are strong prospects for the service, but were particularly anxious about providing their credit card information. Because it’s a business service, and not all business users have access to a company credit card, they might not be as comfortable providing a personal credit card number just for the trial period, but still want to test the service before selecting a monthly invoice plan that ShareFile also offers.


Useful links related to this article

Original MarketingSherpa Case Study

Creative samples from ShareFile’s email reminder system
Recent Sherpa Special Report on How Subscription Sites Use Email to Convert Trial Offers

Next: July 2007 Introduction

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