Design and Evaluation of Personalized Free Trials

Optimal Price Targeting

“…Our approach shares many features with the inverse probability weighted estimation framework employed by Hitsch and Misra (2018) and Yoganarasimhan et al (2020), but extends it to a setting with non-random variation in prices and panel data on past behavior of customers. This setting is common in many markets where a seller repeatedly interacts with customers such as CPG markets and many online platforms.…”

“…This approach allows us to compare models directly on the decision-relevant metric (i.e., profits) rather than a statistical measure of model fit. Inverse probability weighted profit estimators were first applied in the marketing literature by Hitsch and Misra (2018) and Yoganarasimhan et al (2020) who used cross-sectional data from field experiments with random treatment assignment. We extend this approach to the common setting where a company has access to panel data on past interactions with customers and prices may not vary randomly.…”

“…Simester et al (2020a) emphasize the value of randomized-by-action instead of randomized-by-policy experiments, and suggest an "off-policy" approach for evaluating the profitability of targeting policies that were not observed in the data. The combination of randomized-by-action experiments and off-policy estimators has also been used by Ascarza (2018), Hitsch and Misra (2018), Yoganarasimhan et al (2020), Yang et al (2020), Cagala et al (2021), and Liu (2022). We contribute to this literature by extending off-policy estimators -specifically inverse probability weighted estimators -to a setting with panel data and non-random treatment assignment of prices.…”

Converting free users to paid subscribers in the SaaS context: The impact of marketing touchpoints, message content, and usage

“…Free trial is a popular sampling strategy widely adopted by SaaS firms. While the research on sampling (Bawa & Shoemaker, 2004) provides valuable insights for understanding the free‐trial promotion, this study is related to a smaller and newer group of studies on information goods offered in the SaaS settings (Jones & Mendelson, 2011; Yoganarasimhan et al., 2019). The insights from sampling research on consumer goods may not be directly applicable to the free trials in the SaaS setting.…”