Free Trial or No Free Trial

11 May

That is the question.

Should you give customer leads a free trial to your SaaS product and if so, how should it work?

On the face of it, it’s a pretty simple decision - do you want people to use the product for a bit first, or do you not? But actually there are a few things to consider and like many of these questions the answer isn’t back or white.

What is a free trial?

I’m talking here about a finite time that someone gets to test drive your product for free as if they were a paying customer. As opposed to ‘Freemium’, where someone can use a reduced feature-set version of your product for free forever. A trial gives people an understanding of what they are going to get should they pay for it, and Freemium keeps the product front of mind and hopefully convinces some of them that there is value in them upgrading to a paid version because of the additional features they’ll be able to use.

Trial Length

Typically a free trial is 14 days. The received wisdom here is that people need a bit of a deadline to actually put in the effort to use your product. Unless they have an urgent need to solve something there and then, if you give them 30 days to review it, they’ll put that review process right to the bottom of their to do list. And then you run the risk of them forgetting about it altogether. Everyone who has ever had a deadline will know how it has the effect of sharpening your focus.

A longer trial period also impacts your Customer Acquisition Cost. If your sales people are having to keep up the engagement with the lead for 30 days instead of 14, then it’s going to be twice the amount of effort potentially before they commit.

Usages statistics in free trials suggest that people don’t use your product every day of the trial. In fact, they are unlikely to use it even three days in a row. So, don’t stretch it out.. they should be able to get a sense of whether or not it’s for them pretty quickly.

There are, of course, some exceptions to the rule. If your product is complex and it requires a lot of effort on their part to get onboarded, especially where they may have to wait for others to collaborate internally, then maybe two weeks isn’t long enough. And where products become stickier the longer you use them, such as Dropbox, Slack, or Accounting Systems that require a lot of user-configuration of their account, then there is an argument for letting them use the product for longer until you ask them to cough up.

Of course, it totally makes sense to have the option for people to reach out and extend their trial. If someone does this (even if prompted by you first), it’s a good sign. You definitely don’t want to be turning them away.

But giving a free trial for too long comes across as desperate.. like, even you’re not convinced that they should pay for it.

Key Benefits

How many free trials do people take up, on average, as part of their product selection process? If there are say five key players in the market and they all offer free trials, how many of them do we think the average prospective customer takes up?

Answer: one.

Turns out people don’t like taking free trials for the sake of it. That tells us that if someone signs up to you, they’ve probably already discounted the competition. It’s yours to lose at that stage. But it also shows that if someone has signed up for a free trial, they are fairly highly engaged.

Show not Tell

As marketers we can explain the differentiated value of the product and its key features until we are blue in the face. But letting people actually use it themselves makes it a lot easier for people to ‘get’ what the product can do for them.

Customer Data

Someone signs up for a trial, you only get somewhere between a 10% and 20% conversion rate (for a ‘no credit card required’ offer). But you do still have potential customer data that you wouldn’t have otherwise. So maybe it’s less of a ‘not ever’, and more a ‘not now’. And the more data you have, the better you’ll be able to understand what constitutes a good and a bad lead for you.

Usage Data

One thing we noticed at ScreenCloud was that there was a correlation between people who added videos during their trial and people who converted to being a paying customer. So what did we do? We looked at ways to encourage people to add video during their trial. The more data you have like this, the better decisions you’ll be able to make around product-led growth strategies.

Feedback

Especially early on, with only a handful of customers, you’re not getting enough actionable feedback. If creating a free trial gives you 5x the amount of feedback, even if that feedback is negative, that’s super valuable. You need to know why people aren’t converting and now you can ask them.

Potential Risks

Nothing is ever universally without it’s downsides and maybe the downsides are a reason enough not to provide a free trial. Here’s my take:

Costs

The temptation is to think ‘it doesn’t cost me any extra to allow someone to access the product for free for a few weeks’. But is this really true? Do they take up customer support resource? Do they increase your hosting costs? And because you’ve still had to pay to drive them there in the first place, does running a free trial mean your Customer Acquisition Costs are rising?

Product Misuse

Depending on how you’re set up, some people may try and game the free trial to get free access for longer, by using multiple logons for example. Others may only ever need the product for a short period of time and so get all the value you’ve invested in with no intention of ever paying for it.

Customer Service Headaches

If a customer ends their trial and then gets billed because they didn’t cancel in time. It’s just an admin nightmare to deal with. If someone instigates a chargeback, even if they technically didn’t do what they were supposed to, you probably lose out as the vendor.

Other Considerations

With all of the above in mind, what else do you need to think about?

Hone your Targeting

Trialist numbers can quickly become a vanity metric. Trialists that have no intent on ever converting aren’t worth it. Even if you do get feedback from them, if they were never going to be your customer in the first place, why do you care? We found that generating trials from Facebook was cheaper per trial than from Google, but the conversion was way worse giving Google a better CAC. But that’s just us. You need to figure out what works for your business.

Don’t Make Me Think

Just because you’re giving away something for free, don’t fall into the trap of believing that you can take people through a massive set of hurdles to get there. Remember that fact about people normally only trying one product before deciding? Well you want that product to be yours. You certainly don’t want people giving up half way though onboarding after the last question about their inside leg measurement broke the metaphorical camel’s back.

Make the onboarding process as simple as possible. Do you really need them to confirm their email address? Maybe you do, but if you don’t, then why bother? What support is there to help them get started? Do they need to attend a webinar, or watch a video? Make it really easy and really intuitive. They have nothing to lose at this point.

Remember they are still undecided

They may be a far way down the funnel, but you need to think about helping them over the line. Tell them what they will get as part of the free trial. Show social proof. Make them feel that they are about to begin something that will make their life much better. Too many free trial sign-up pages are just blank, save for the demand for personal information. You still have to tell them what’s in it for them, even if they aren’t paying for it.

Credit Card Upfront?

Should you ask customers to put in their credit card first to start the trial or do you wait until they’re ready to pay? According to these stats, you might be looking at conversion rates from trial to paid of:

Credit Card upfront (sometimes referred to as Opt-Out Trial) = around 50%

No Card Required (sometimes referred to as Opt-In Trial) = around 18%

So you might think, yeah credit cards up front are better. But I would suggest if you can, that you test it. What you’re most interested in is the overall new customer numbers. So yes, you might get 2.5x more conversions from those who’ve entered their credit cards to start the trial, but that might also mean you get 4x less trialists to begin with as people are put off from getting started. On top of that, of those 50%, how many of them are accidental customers who just forgot to cancel in time?

If the numbers work for you then go with what’s best. Personally I prefer no credit card because I think you run the risk of turning away genuine customers because you’ve stuck an additional hurdle in their way.

Finally… what if you can’t do free trials?

If your product requires too much customisation and professional services to get going, so that running a free trial just isn’t possible, are you stuffed? Is your only option then to create a ‘Get Demo’ button?

Think about the state of mind of trialists. They probably don’t need to make a decision today and they want to check it out in their own time without a sales person breathing down their necks. Think about your own experience: if you were looking at a product and still on the fence and you had the option of Free Trial vs Get Demo, what would you go for? The truth is, nobody wants to be sold to for half an hour unless they are at the end of their own research and need to get into the details.

So with this in mind, what could be done for people wanting to get a taste of the product without committing to a sales meeting when a free trial is impractical? One way may be getting people to watch a pre-recorded webinar. Record the webinar which is called something like ‘Learn how to get <Differentiated Value> by using <Product X>’ (live or faked). Ask people to give their email address to access it and you’re not a million miles away from the free trial in as much as they get to see the product’s best features without the pressure of being sold to, and you get their data. It’s not perfect but it’s probably better for this group than simply ‘Get Demo’.

David Hart