Growth

 

Why are free trials so often based on a timeframe (7 days, 14 days, 30 days)?

From a company’s perspective it must be very appealing to think you can shortcut the natural sales cycle and herd your customers through the shopping cart when it suits you. But odds are you will run into more than a few gatekeepers like Kevin who need to be wined and dined before they bring out the credit card.

Besides, don’t you want paying customers who love the product and know they will get a ton of value from it rather than those who will churn out after the first month?

No Ultimatums! …Or Else

A free trial based on a timeframe is an arbitrary ultimatum that creates a false sense of urgency. It isn’t like you are going to run out of software to sell if someone needs a few more weeks to decide if they want to pay for the product. Why in the world would you purposefully limit supply of something that 1) has unlimited supply and 2) you desperately want to scale?

Be a Mensch

If a 14-day trial is good, why isn’t a one-day trial better?

Obviously you wouldn’t expect many people will get a handle on the product in one day so this is clearly too short. You need to allow people to experiment with the product and gain value in their own time and through their own use of the product before you ask them to pay.

Value is created through use and understanding of a product, not simply through the passage of time.

People are busy and frankly don’t care about your timeline if they haven’t fallen in love with your product. These are the people you really need to help get value from the product – and pressuring them is a major turnoff. You have already made the software, why not let me fall in love with it before you make me pay for it?

Conclusion

I believe a use-based trial period or freemium model is a much more sustainable and more appealing way to structure the product orientation period. If the product isn’t a priority for me at the moment, I can circle back in a few weeks and learn more about the product when I have the bandwidth.

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Did Coke have 51% or 49% of the soda market? Coke executives were tired of the meaningless distinction and came up with another metric from which they could measure success and opportunity – share of stomach.

“It was a mind-bending paradigm shift for me. We weren’t trying to get share of market. We weren’t about trying to beat Pepsi or Mountain Dew. We were about trying to beat everything.” – Coke Executive

This expanded strategic vision led Coke to pursue many successful non-soda acquisitions including PowerAde, Nestea, Fruitopia, Dasani, Odwalla, and Vitaminwater.

It worked for Coke. Will it work for you?

Probably, not.

Lane Closed

While it is tempting to want to broaden your product focus to new market segments, unless you are already a dominant force in your own product vertical, diversifying your offerings may slow growth in your core product by diverting resources and focus from the core vision. In Coke’s case, when the new strategy came about, Coke was already the soda world leader. More importantly, Coke became the soda world leader by dominating its original market for decades and not abandoning its base competencies.

Comparison

Coke was able to execute upon the new vision of their addressable market by realizing that their expertise was not only in soda, but liquids generally. While this seems (and is) a logical step for Coke, there are not many businesses with products as comparable as soda and water.

Conclusion

Although share of stomach is no longer part of Coke’s strategy, it provides several good guardrails for when to and not to pursue expansion across similar products. Including similar products in your growth strategy can make a projection more exciting, but pursuing these opportunities before you are a dominant leader in your core market will likely lead to both segments not reaching their potential.

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