playing devils advocate AGAINST single click signups
A verbatim conversation, copied right out of Adium, with Jesse about making it easy to sign up for a website.
Jesse: You know, I really love the simplicity of Posterous. I may start using it. Alex: its sllick Jesse: Yeah. The no signup is the best non-feature around. Jesse: Oh and they allow custom domains. Didn’t even realize that. Alex: mmm nice Alex: ive got a devils advocate argument about the “no signup necessary” workflow Alex: it plays into low-impact workflows, too, like openid/facebook logins Alex: clearly, you and i benefit Alex: but from a business standpoint, the ratio of dead accounts goes through the roof Alex: so you can report users as an astronomically high number Alex: but active users as a comparison looks bad, and on a business model, thats bothersome. Alex: not insurmountable Jesse: That’s very true. I do like how it gives me instant gratification but then allows me to come sign up.
discuss.
I’d rather have 10,000 users and 2,000 active users than 1,500 total users any day.
Chris, That’s an interesting point… The question I would ask is, “What’s a user?” Is it someone who simply used the site once? Twice? Maybe it’s someone who’s made an account?
Personally, I like this type of setup because it gives me a chance to try a service out fully before I decide to fork over information. I wouldn’t consider myself a user until I filled in my info.
@Chris: I firmly agree that improving the boarding process to gain new users is a positive step. What I’m curious of is, from a business perspective, does that ratio of members : active members mean anything?
I don’t think the ratio means anything. And if you’re worried about it, don’t report it. Just report “active users” and then provide your definition of “active” (i.e. “logged on in the past 90 days”). If you have investors and they want the total number, just tell them the truth: the awesome ease of your signup system makes it trivial for moderately interested parties to sign up, whereas with a more complicated sign up system, they wouldn’t have signed up at all.
In no way should an easier signup system result in an overall lower number of active users, so don’t sweat it!
That ratio is a completely arbitrary metric. It only means something if it seems relevant to your particular situation. You could just as easily measure “users active in the past 120 days” to “users active in the past 60 days” and it might be equally as useful to your business. I don’t think any investor is going to penalize you for having a lot of inactive accounts as long as there’s a clear understanding of why they’re inactive.
CM
@Mark Jaquith & @Chris: thanks for sharing your thoughts on the ratio, helps a lot!
We’ve discussed this internally regarding Beanstalk. I remember hearing from Carson that the average of free to paid is about 1 – 2%.
I think this is perfectly fine. The best demo you can offer is letting someone actually use the system. If the person is inactive they either did not find it useful or were not ready to convert. The important thing is that they can easily convert later if they want.
From a business perspective, the bottom line always depends on paid accounts, so that is the number you can focus on first. There are also some metrics you can pull out of the free accounts. For instance, we know the exact dollar value of every sign up in the system because we can clearly calculate the paid to free percentage.
The other benefit is continued communication. Since the inactive users still have accounts, we can send them updates about the service. This might eventually convince them it is worth the effort.
As of today, Beanstalk has a 6.58% conversion rate for free to paid. Our goal is to continue increasing that to bring more value from the many free/inactive accounts in the system.