From Freemium to Premium: The Key to a Profitable Student Program
Offering software to students for free or at a discount can be a terrific long term play for revenue. It encourages students to use your software when they may not be able to afford it, and makes it easy for you to convert them to a full-priced customer once they can.
Exclusive offers are a proven hook for getting this budget-conscious audience to adopt your product — Tableau and Intuit are two leading brands running successful student programs. But if you want your discount to turn them into lifelong customers, you need to carefully consider how you structure your offer.
You may think providing a free or discounted version with fewer features is a fast track to success, but it’s not. There are plenty of hidden costs to that strategy, and it can lead to lost revenue when ineligible buyers take advantage of your offer.
If you want to leverage the full potential of a student seeding program, you need to reject the expense and risk of having to manage multiple versions, and instead take an approach that streamlines your operations and appeals to students: give them a discount on the full version of your software and use Digital Verification to secure your offer.
Fraud is Real
Software companies are right to worry about how to manage student discounts. Recent customer audits revealed that 35% of student offers were fraudulently redeemed. That’s sobering but not surprising. Our consumer research revealed that more than 1 in 3 Americans say they redeemed an exclusive offer they didn’t qualify for.
Even worse, the rate of student offer fraud could be even higher because most companies use ineffective ways to determine eligibility. Many rely on students providing a .edu address, but 68 percent of college students keep their email address for the year after they graduate, and some colleges encourage alumni to keep it for the rest of their lives. (Read our earlier blog post to see how Digital Verification can help you verify your buyers are really students.)
The Problem with Managing Multiple Versions of Software
One approach some businesses have tried for addressing these risks is to create a student version of their software that has limited functionality. They hope this will provide protection from rampant sharing of discount codes that erodes revenue and reduces the integrity of the exclusive student offer.
This strategy has significant downsides. Developing and maintaining a limited-feature product just for students puts added strain on internal resources—product management, development, quality assurance, marketing, and finance. Everything they do to go to market with your full-priced product they have to repeat to deliver a separate version. That’s a waste of time and money.
Also, the reduced-functionality product you release doesn’t showcase all your software can do. Remember, this is a chance to get a new crop of customers fully trained and proficient in your product. If your new young customers don’t experience the full power of your software, they’ll be less likely to want to use it after they graduate and carry it into the workplace.
Further, if your competitors are making their full-feature product available, you may not look good in comparison.
Finally, maintaining a separate “student version” complicates the process of converting them to full price because you have to switch them to a completely different version, rather than simply start charging them for the product they already have.
The Solution: Offer Student Discounts on Full-Version Software and Use Digital Verification to Confirm Eligibility
Wouldn’t it be a whole lot easier to maintain one secured version of your software and give students discounted or free access to it?
With Digital Verification, you can.
Digital Verification occurs instantly and can be done seamlessly as part of the checkout process without leaving your website. Students simply provide a few points of personal information to receive their discount. Their eligibility is instantly verified, and you now have data that can be used to nurture and retain these customers for the long term.
Here are even more reasons to opt for this approach:
- It reduces the additional overhead and people resources needed to manage multiple versions of your product.
- Students get the full experience of your software, making them proficient users who then become strong brand advocates.
- It gives you the opportunity to reverify their eligibility and simplifies the process of converting them to full price customers.
- Graduates port your familiar product into their workplaces, entrenching it where it’s already being used or introducing it to a set of new prospective customers.
Digital Verification Drives Your Program’s Success
SheerID ‘s Digital Verification Platform deters fraud by ensuring that only students can access your software deal. It uses hundreds of authoritative data sources worldwide to verify student credentials instantly, instead of relying on a .edu email address or cumbersome document uploads.
It’s a friction-free process that can increase conversion rates by as much as 10x. It also allows you to reverify students on a regular basis, securing your offer and tracking the customer journey so you can encourage full-priced purchases or offer interim discounts when students transition to the working world.
Providing students exclusive offers for your software can help you acquire profitable, long-term customers and prevent fraud. You just need to follow these three steps:
- Offer your full-feature product.
- Digitally verify redeemers are really students.
- Have a plan for converting them to full-paying customers after they graduate.
Create Instant Trust in a Digital World
Let’s talk about how SheerID’s Digital Verification Platform can help you earn loyal, long-term customers from your student marketing program.