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If you search online for information on increasing the conversion rate of your SaaS products, you will find a variety of pages that show you techniques that you can use to convert more website visitors into test users and paying customers.
In most cases, these tactics are successful - when implemented effectively, they can increase your overall conversion rate. However, by solving this problem, you inevitably face a completely different problem: customers who sign up for your product or service without actually needing it.
We call these users "erroneous applications" because they often mistakenly believe that your SaaS product is essential to their business when in reality it may not fit well for a variety of reasons.
How does an erroneous applications come about?
The term "erroneous applications" is not meant in a derogatory sense - these customers did nothing wrong. Instead, they signed up for your trial or bought your product by mistake, either because of a marketing problem or some other factor.
In the most common cases, these registrations arise because of a mismatch between the customer's expectations and the real benefits your product or service offers. Another reason is the recommendation through friends and acquaintances, although the service does not meet the requirements. These bad logins don't actually pose a major threat to your business.
These users usually sign up for the free trial, or if your product doesn't offer a free trial, they buy a short term plan and cancel as soon as they find out Your product is not suitable for you.
Do these registrations harm the company?
Basically not. In the best case scenario, this registration is a missed opportunity; in the worst case, a quick and easy refund is required.
However, erroneous applications can create difficulties for the company when the NPS comes into play. If such an incorrectly registered user leaves their feedback via a survey based on the Net Promoter Score®, the picture of the actual customer sentiment is no longer accurately reflected.
How an erroneous applications can affect your NPS
In most cases, customers who registered by mistake silently cancel their subscription. However, when you use Net Promoter Score software to measure customer sentiment and collect feedback, incorrect sign-ups can be a bit of a hazard and cause a lot of confusion when calculating your NPS.
If customers who came to you through a bad login receive and respond to your NPS survey, the feedback they leave tends to be negative. In short, they are critics, even though they likely never invested the time to really use your product as it was intended. As a result, their feedback can feel almost like an anchor dragging your Net Promoter Score down.
Nobody likes getting a review that feels unfair, and no respondent who doesn't actually use your product can give an honest review. Then, is the feedback still valuable and should you keep these ratings in your NPS calculations? Yes, with one caveat that will be covered later.
Incorrect signups can help you master onboarding.
Customers who mistakenly sign up for your product and then cancel without actually using it often actually need it - but they simply never make it through your onboarding process.
If your SaaS product has a steep learning curve or requires basic knowledge, it is difficult for the first-time user to find their way around the most important functions. In these cases, the onboarding process must guide these users by hand through the commissioning process. This is especially important if your technical product is aimed at an audience with little basic knowledge.
A good example of this is the small business owner or startup looking to run and / or expand an online business. People who have the necessary basic knowledge will already recognize the value of your product, usually also tolerate a sub-optimal onboarding process and will not infrequently abort an introduction and jump straight to the setup and the advanced functions.
However, everyone else, or rather most of the users, have to be taken by the hand.
If you notice a lot of customers signing up for your free trial or buying a short term subscription with good intentions but then cancel quickly, the obstacle could be an onboarding process that has not been optimized.
You address this issue by examining the onboarding vulnerabilities using A / B testing and feedback from critics. From the feedback received, you will develop a step-by-step strategy with which you can remove these onboarding hurdles. Although this does not turn the incorrectly registered customers, those who would drop out due to the complexity, with an optimized onboarding process you will quickly become enthusiastic supporters of your company.
Erroneous applications can help you identify marketing problems
Another important benefit of considering feedback from misregistered customers is that it allows you to identify weaknesses in marketing your product.
The most common marketing weakness uncovered by feedback from erroneous applications is a mismatch between what your marketing message says your product can do and what it actually does.
For example, imagine for a moment that you are selling a SaaS product, especially CRM software that small online shops can use to increase their sales. Your on-site copies, advertisements, and customer testimonials reflect a best-case scenario - rapidly growing your business and doubling, tripling, or even quadrupling sales in just a few months.
This may not be a misleading claim. Customers may have used your product and grown really fast by fixing easily fixable flaws in the process so far. But it can also lead to incorrect registrations, for example if a shopkeeper who has not yet sold any goods online and feels misled or disappointed because he has invested time in your product and now that he understands it, has to realize that it does not fit his business model at all.
Another common marketing problem that can lead to incorrect signups and poor NPS feedback is the "let's market it to everyone" approach.
If your SaaS product is specifically designed for startups with in-house technical staff, scaling up your marketing efforts to reach less tech-savvy customers can suddenly result in more free trial registrations being abandoned without ever using your product.
If your product is exclusively developed for companies with 1,000 or more employees, a lack of reference to this fact can lead to an increase in incorrect registrations from small business owners who are simply not your target group.
Either way, the outcome is the same: a missed opportunity, a reviewer, and a Net Promoter Score pushed down by feedback from a customer who hasn't used your product in the way you intended.
The solution to this problem?
Use the feedback from critics who canceled very quickly after signing up to find out what made them do so. Then, review your marketing approach to determine what can lead to a mismatch between a prospect's expectations and reality.
Incorrect logins can help you identify poor support or a poor knowledge base
Many of the customers who are quick to quit don't do this because they don't need the product or have a problem with the way it's marketed. Another reason may be that when they need to, they cannot find the answers they need.
No matter how tech-savvy your target audience is or how effective your onboarding process seems, there will inevitably be situations where your customers need help working out a feature or solving a problem. If this happens who can you contact? If your live support isn't available, they may search your knowledge base for an answer. If the information you're looking for isn't there, your next step is likely to email your support team.
At this point, it is quite easy for a free trial user or short term subscriber who might become a loyal customer to immediately give up your product entirely.
The solution to this problem?
Just like in the two scenarios described above, the trick to turning this event into an opportunity is to analyze and act on the customer's feedback. Missing information in your knowledge base? Is your support available as soon as it should be?
There is only one small barrier for a new user of your SaaS product to turn away. Because of this, the vast majority of free trial users become non-paid customers.
If you look at NPS feedback from bad sign-ups - as thoroughly as you do your loyal subscribers' feedback - it will be much easier to identify ways to reduce bad sign-ups and improve test user-to-paying conversion.
The restriction
As already mentioned, there is a limitation if you want to include qualitative and quantitative data from incorrect registrations in the calculation of the NPS score.
The caveat is that you should take feedback from bad signups for marketing, onboarding, and support very seriously. However, it doesn't make sense to delve into product-specific feedback from people who accidentally buy your product.
Many times, a mistaken or random customer's first instinct is to be broadly critical of your product in their NPS feedback. Instead of explicitly pointing out the onboarding or marketing errors that led to their cancellation, they criticize your product or business as a whole.
Similar to other qualitative NPS feedback, the solution is to selectively determine how you analyze and respond to customer feedback. Take certain actionable complaints seriously and tackle the improvements, but don't fret about unspecific, unhelpful, or rude reviewers.
Increase satisfaction and retain more customers with Callexa Feedback
Our NPS tool Callexa Feedback was developed to simplify the implementation of the Net Promoter Score. This way you can learn more about how customers think of your product, identify the weak points that lead to cancellation or short-term use, and improve the retention rate significantly.
The Net Promoter Score can help your company retain customers and grow faster. So start your free Callexa Trial version and survey up to 50 of your customers a month to get valuable feedback and insights.
If you wish, we can make an appointment for the guided initial configuration of your first survey.
Recommended reading: If this article helped you and you would like to learn more about the possibilities of using NPS in customer acquisition, continue reading here: "The role of NPS in customer acquisition"