What if everyone currently using your service through someone else's account, suddenly got their own paid account tomorrow? Or what if your corporate customers paid for all the seats they're using rather than sharing passwords?
Would your website crash trying to process all the credit cards? And would that add tens of thousands of dollars in ARR to your books? Or even billions?
Here's the thing: Just like death and taxes, account sharing happens. Some of it is hard to stop. But there are key things you can do to reduce it -- and increase your revenue.
And no, it doesn't mean you need to aggressively crackdown on your current customers by limiting their access or asking for additional verification every time they sign in. Instead, it involves coming up with an intentional strategy for reducing account sharing and increasing your paying customers. One that's integrated with things like your pricing structure, product UI, product design, and your marketing strategy.
But, more than anything, it's about understanding why account sharing happens and how to make it in users' best interest not to share accounts.
Interested? We'll walk you through how to come up with a strategy to change how people use your service by making changes to things like your product design and pricing. And we'll even tell you, at the end, how to convert the account sharers who remain even after you do everything right!
Why account sharing happens
The first step to stopping account sharing is understanding why people do it. You might think it's because people don't want to pay for anything anymore. But that's not true! All your other customers are paying for your service. You just need to figure out how to get account sharers to pay as well.
At Upollo, we break down account sharing into two categories: short-term account sharing and long-term account sharing. We also believe there are different sub-types and that they each require different strategies to convert to paid subscribers.
Three types of short-term account sharing
The 'Incognito' Trialer
Let's say you want to try a new service but you don't know if you'll want to continue using it when the trial ends in a month. Maybe you don't want to give your personal details to another product, your credit card isn't close at hand or you just can't be bothered typing in your details.
So, you ask your friend if you can borrow their password and try their account. That way you can try it without any risk. If you like it, you can sign up for their own account.
The 'Casual User' Sharer
Another kind of account sharing happens by people who are actually casual repeat users of your service. Streaming companies will tell you that account sharing stats skyrocket in the days and weeks after a popular show is released. Everyone wants to watch the show so they can have an opinion on the public 'discourse' around the show but they would only use the service to watch that one show. Easy, they think. They can just ask a friend for their password.
The 'Confused B2B' Sharer
A lot of short-term account sharing happens in B2B. Usually, it's because a company doesn't have clear IT service management or identity and access management processes. Rather than offering automated provisioning or an easy and quick manual process for asking for access to software or services, the company has a process that dates back to the '90s.
Maybe there are different people to go to for different software products and no one knows who the right person is to ask to get a seat for your product. Maybe the process for asking for access is complicated, confusing, and involves a long wait. Often, it's just easier to get access to a product by borrowing a colleague's password. These types of sharers can often become long-term account sharers due to inertia and habit.
Three Types of long-term account sharing
The 'Power' Sharer
Power sharers are dedicated users who love your product, use it all the time, but have found a way to get access to it via a friend or family member. Power sharing is so ingrained in many people's lives that you regularly see stories on social media about people ironically (or sometimes seriously) bemoaning when former partners change their account password and kick them off their shared accounts -- years after their breakups.
The 'Accidental' Sharer
Accidental sharers don't want to be account sharers at all. So, how do they end up long-term account sharing? They tell their friend about a cool TV show or program they're using and then the person says they don't have access to it. That's when they offer to let the person use their account -- only to instantly regret doing it. This can go on for years if the person feels too awkward to retract access to their account.
The 'Business as Usual' Sharer
The 'Business as usual' sharer is a corporate client that encourages staffers to share passwords for a service they're buying from you by the seat. Yes, they could afford to pay for the 10 seats that they're actually using, but they have been able to get away with only paying for one account so far.
Why pay for more seats when you can just put access information in a password manager and let everyone use that? This can be so endemic in organizations that sometimes dozens or even hundreds of employees end up using one license.
How to reduce account sharing
When it comes to putting an end to account sharing and adding more MRR to your bottom line, there are three things you need to focus on.
People account share because it's easier to account share. Your goal is to instead make it easier to create a new account.
For example, the Confused B2B Sharer is sharing an account because they don't know how to get a legitimate account. Or their organization takes forever to provision access. Many of these short-term B2B sharers work in organizations that absolutely have enough budgeted to pay for another seat. They just make it hard for their employees to do the right thing. In B2C, you'll want to similarly make signing up as simple as possible.
Here's how you can make it easier for users:
- Automate it. If the problem is not knowing who to ask for access, you can build into your enterprise product a button for new users to request access that then goes to the person in-charge who can provision access easily. Or include an automated pop-up telling a user logging on from an unfamiliar machine who the administrator for the product is so they can contact that user.
- Get pre-approval. You can also negotiate a certain number of allowable seats with clients that new users can activate immediately with the click of a button. Or companies can allow anyone with a certain domain to get immediate access. No need for lengthy approvals.
- Give them single sign-on. Adding a single sign-on integration can also cut down on these types of account sharers since the only way to allow account sharing is for employees to share access to all their accounts -- and violate company policy.
- Support them to better provision. If all else fails, you could partner with an identity and access management or IT service management provisioning software to offer a discount on their services!
- Reduce sign-up time. You need to make it easy for B2C users to sign up for an account in a few minutes. That means clearly laying out what info they'll need and how long it will take to sign-up.
- Redesign your UI. You want to make it possible for consumers to pay with a click of a button via things like PayPal or Apple Pay. Your sign-up process should be seamless and well-laid out. It should be clear that if they're doing a trial that they'll get notified before you charge their card so they can opt out. That will help cut down on Incognito Trial Sharers.
Optimizing your pricing and plans
You might not have product/market/pricing fit with the potential customer that's account sharing. But you might be able to fix that with some tweaks.
After all, one of the best ways to combat account sharing is through a good offense. And by a good offense, we mean appropriate pricing, a variety of plans, and discounts on group plans to encourage getting your own account.
Here are some things that could help:
- Don't implement blanket global pricing. If you do, you'll likely see a lot of account sharing. Globalized pricing could make your service unsustainable in certain countries. It's important that companies adjust their pricing, if possible, in countries with lower average income. This move could cut down on your global Power Sharers.
- Have your lowest tier or free tier include multiple users. In B2B, you can break the account sharing habit right from the start. If you offer a free tier when there are only a small number of people using a service or two seats for the price of the first seat, everyone will get into the habit of having their own account. You can also do this with your lowest paid tier. Then, when more people need to join the service, it will make sense that new users also have their own accounts. The alternative is to sell one subscription and risk potentially having people get into the habit of account sharing.
- Allow people to pause their subscription. Some people love your product but they just don't use it frequently enough to pay a few dozen to several hundreds of dollars a month for it. There are pros and cons of allowing customers to pause a subscription but one big pro is that it gives businesses and individuals a reason to move from account sharing to paid accounts. With business users, you could create a plan where you only bill for accounts that were active users that month. That way people who only use your product once a quarter will still pay for their use. This helps convince the Casual User Sharers and the 'Business as Usual' Sharers to finally get an account.
- Have a pay for value option. With some products it makes sense to always charge by users. But with other products, you might want to consider the value you bring. Some companies or individuals don't need your product on an ongoing basis. Instead, they need access to it once and then won't use it again. Or might not use it until next year. While you could address these account sharers with a free trial, you might also want to offer a different kind of pricing structure. For example, you might want to charge by volume of queries for an SEO product. That way you can price use based on how much the product is used rather than by user. This will address Casual User Sharers and Confused B2B Sharers.
- Offer deals for additional users. This is particularly relevant in B2C where people will often account share with friends and family. Offer incentives to buy two plans (or family plans!) instead. Spotify does this well with their Premium Duo plan where two people -- friends, family, or lovers, Spotify doesn't care -- can get an extra plan for a little more than a single subscription. That means that two people can pay less for a shared plan than for two separate plans. Not only does that cut down on account sharing, it also works as an informal referral program.
- Differentiate between licenses. Some companies need a lot of people to have access to your product but they're using it in very different ways. For example, if you have a design product not everyone at your company is going to be actively designing things. Some will just need to access it to view and approve designs. Having editor licenses and viewer licenses cuts down on Business as Usual account sharing.
Design intentionally for individual use
Here's the thing, some products are optimized not to be shared. For example, no one is going to be sharing their Tinder account or their task management app with their friends. While you might not be able to personalize your product to that degree, there are some strategies that can help.
Here are some product design tips:
- Gamify and make your product social. Products like Duolingo incentivize not sharing an account by creating sharable streaks. Encouraging users to use the product every day to build that 30-day streak that you can then post on your social media just doesn't feel like an accomplishment or honest if your friend made up for that day you missed mid-month. Some companies achieve this by creating communities in their app where friends can share playlists or other tips.
- Personalize your product. While a lot of Spotify users account share, the company has been doing a lot to discourage it. One key part of this is its customized algorithm and Spotify Wrapped sharable content. If a user liked classical music and shared their account with someone who liked death metal, there's a good chance they wouldn't like the music suggestions it generated and their Spotify Wrapped results would likely confuse people at the end of the year. Both of these things help personalize the product and make it inconvenient to share. Similarly, if you have a work-related product, by giving people options to customize their dashboard or UI, you could reduce both short and long-term account sharing by companies. People will get used to using a product one way and won't want to use an account optimized for their colleague's needs.
- Accounts that follow employees. Github is a great example of this. No one would want to share their GitHub account. It's an account that they hold across employers that keep track of their code contributions to open source and private projects -- as well as allowing programmers to be more productive and better collaborate with their teams.
- Limit the number of devices that can be used automatically. One way to reduce unauthorized usage is to limit the number of devices that a customer can automatically use to access their account. Ask the customer to officially register the devices that they use after they reach a certain number. If they need the maximum number of devices for their own use across their technology, they will be less likely to share their account.
How Upollo helps you find account sharers
There are many good reasons people share accounts. We've listed all our best strategies for removing the things in your product that make people feel it's easier to share and that make stopping account sharing difficult. But even if you do all the right things, account sharing will still happen.
We're experts in helping SaaS companies understand their users. We give you the analytics and insights you need to flag things like repeat trials and account sharing. We're in the business of supporting companies to create better strategies for capturing the revenue they're missing out on by helping them turn account sharers into happy paying customers.Wondering what to do to convert account sharers once you detect them? We'll share some tips in an upcoming article.
But whether you're dealing with short-term account sharers, who find it easier to account share like the Confused B2B Sharer, or long-term account sharers, like Power Sharers who use your product for years without paying, we've got you covered.
We'll help you identify them and support you in getting them to finally sign up. After all, account sharers already know the value of your product. Some of them are even your core users. They just haven't paid for your product yet.
Just think about the difference doing so will make for your ARR!Get started for free