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Freemium, Conversion Rates and More: AVG CEO J.R. Smith (Part 5)

Posted on Monday, Apr 16th 2012

Sramana: How was traffic being driven to the AVG website?

J.R. Smith: It was mostly coming from the web as organic traffic. There were so many affiliates and partners giving away the software on their websites that Google had listed AVG as one of the top search results for the term “free antivirus.” It was purely organic, and there were millions of visitors per week to that website. My job was to improve the conversion rate, and we did double it.

Sramana: What did you do that doubled your conversion rate?

J.R. Smith: I look at conversion in two ways. The hardest part is getting people to their websites. Giving away products free and using Facebook and Twitter to spread your reputation are vital. You have to engage with key bloggers and the influences in your space.

When it comes to conversion, there are two key points. When you get people to come to your website, you can push them directly to a free product and try to get them to upgrade later. That is what AVG did initially. We did some experimentation, and I found that people will come to the website looking for free, but if you try to convert them at that time, the conversion rate triples. They may be there looking for a free product, but they are actually at the point when they are making a purchasing decision. You have a better chance to get them to pay for the product.

Today if you look at the AVG website, you will see you can get the free version, a trial version, or a paid version. We work really hard on getting people to use a paid version. Once they become free users, it is hard to get them to move upstream because they are content. We started seeing our paid user base grow significantly, at which time we were able to tune in the message to showcase the differences between the free and paid versions.

Sramana: I think what you have said about converting people to being paid users up front is one of the most insightful things I have heard in the freemium space in a while. This model tries very hard to get people to use the product free, with very low results. You bring up an interesting psychological argument.

J.R. Smith: The underlying principle is how you get the traffic. That is where you have to be patient and invest some money. You must drive free. People have to know about your product. You have to give away a really good free product. If you can afford to put revenue to the side to acquire free users while focusing on producing the best product you can, then people will start talking about it, and they will recommend it. Even today we find that more than 60% of the people who use our product do so because somebody recommended it to them. That is really powerful. Once you build up enough traffic, you can move into monetization, upselling and cross-selling.

This segment is part 5 in the series : Freemium, Conversion Rates and More: AVG CEO J.R. Smith
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