Many SaaS businesses assume they must offer a free trial – it’s just what you do. But it may be smarter to take a hint from Hamlet and consider the question more deeply. Is a free trial really the best way to attract subscriptions?
When Does a Free Trial Make Sense?
Free trials should convert enough buyers to cover your costs and grow the business. For those results, prospects have to use the product during the trial and experience its value.
So before launching a trial, ask a few questions:
- Is your product easy to set up and deploy with no training and few instructions?
- Can people experience the benefits within the trial period?
- Are people sufficiently motivated to use the app after signing up?
- Does your product sell itself?
- Do you have additional value to offer beyond the free trial as an incentive to buy?
If you answer “yes” more than “no,” you’re in a good position to turn tire-kickers into customers. In fact, the trial can become your main growth engine.
What Can a Free Trial Do for You?
Attract more prospects:
It’s estimated that 75% of SaaS companies offer free trials. As a result, many buyers expect one. Without it, they might overlook your product. Plus, a test drive entices people to try your app even if they aren’t yet convinced they need it.
Collect valuable data:
Trials generate scores of excellent data. Tracking user interactions will highlight points of friction or confusion in the interface. You can also ask prospects what features they find most and least valuable.
Then use the information to revise the customer journey and enhance the app. Sleeknote, for example, used free trial data to improve their sales communications and find out why people didn’t buy.
It may seem weird that a “no-touch” trial can increase customer loyalty, but testers invest time and energy with your software, which increases the cost of switching to another app. If they have a decent experience with you, they’ll likely stay and buy.
Convert freemium users:
If you’ve already started with a freemium model, use a trial of the premium version to convert people who already use and like your application. For example, business administration platform Forest committed early on to the freemium approach but has recently started using limited free trials to encourage upgrades.
When Can a Free Trial Hurt Your Business?
Prospects don’t have to shell out for trials, but you do. Product development needs to maintain a useable, limited version of the app and manage free subscriptions. And your SaaS marketing agency or your internal marketing teams has to support users and convince them to buy.
With some types of businesses, free trials will cost more than they bring in:
- Does the product rely on the customer inputting a lot of data?
- Do users realize the value after weeks or months rather than days?
- Do users need training to experience the full benefits?
A few days to test drive a complex, feature-rich application will not be enough to persuade prospects; they may even dismiss your software as worthless because they couldn’t make it work.
What Else Can You Do?
Consider options that help you convey the product’s value before people get their hands on it. A free trial can still play a role in your sales process, but you won’t lead with it.
Offer a live demo:
Live demos give sales the opportunity to understand prospect pain points and customize the value proposition accordingly. Demos work especially well for multi-featured applications which could overwhelm a buyer at first. After the demo, once people understand how the application will help them, you can offer a free trial to get a feel for the user interface.
(Learn more about the advantages of live demos.)
Share self-serve demos:
If live demos prove costly, consider a self-service demo – a sandbox in which people can try out a version of the application pre-populated with dummy data. They experience the value quickly without the friction of time-consuming set-up.
Incorporate explainer videos:
Videos quickly show off the software, its major features and its benefits with no cost to prospects. If you have correctly targeted customer pain points, videos alone can drive people to subscribe or ask for a demo.
Offer guarantees and incentives:
Lower the risk of signing up with a moneyback guarantee and the option to cancel anytime. If it makes sense, you can even offer a discounted cost for the first month or two as incentive.
Run managed trials:
For managed trials, you set up your application with the customer’s data. Users get a successful proof of concept and will likely buy since much of the deployment work is done.
Bipsync, an asset management platform, gets a 90% conversion rate from managed trials. Of course, this high-touch approach only makes sense for large, well-qualified prospects where the customer lifetime value outpaces the cost of sale.
What if You’re Still Not Sure About Free Trials?
If the road ahead isn’t clear, take advice from Neil Patel and put your free trial on trial. Measure its conversion rate, track its costs and see how it performs. Then test other approaches and determine which ones provide the best return on your investment.
If free trials don’t work for you, don’t be afraid to buck the trend and try new things. That is, after all, how the SaaS industry got started.