Why your SaaS company should offer a free trial

The idea of offering your customers a free trial period is neither revolutionary nor unusual. As a business, you’ll be well accustomed to making use of free trials that other companies offer.

For SaaS companies like yours, it’s a really good way to show off your product. This is why so many subscription-based companies offer free trials, not just SaaS -think Netflix, Spotify or Dollar Shave Club.

Consumers may be cynical of your offering. Perhaps assuming you’re tying them up and relying on their inertia to gain a fast buck. However, by offering a great product and a fantastic onboarding experience a free trial period can be an effective way of impressing your customers in the long run.

In this article we will look at a few things to consider for how long and/or to what capacity your free trial should be:

How long?

A trial can increase your base of potential customers. For them, there is no harm in giving your product a go. It shows your business has faith in the service enough to let them take a look around.

Free trials are usually between 7 and 30 days long. The reason for the large disparity is simply that businesses want to give the potential customer enough time to experience the full product. When considering the length of time to offer the period for, ask yourself how long will it take for the customer to see all the benefits of your product.

Also, consider how long your company can afford to offer a free trial for. If you are expecting a short customer lifecycle then offering a several month trial period can be a loss of much-needed income. Free trials can be great for marketing purposes but don’t always make financial sense. Remember you’re giving a 100% discount.

You may also want to limit the length of your free trial period to not exhaust the customer of your service. If you ran a video streaming service, for example, and allowed your customer to have 60 days free then there’s a good chance that they will binge most of your video library. Therefore it’s important to give your customers enough time to try, but not too much so they feel the need to “beat the buffet”.

Extending free trials

If you offer a short free trial, you could also give customers the option to extend it if they haven’t had enough time to try your product. HelpScout send an email to free trial customers allowing them to extend their trial in one click if they’re nearing the end and haven’t made a purchasing decision.

Full product?

Next, consider if you should offer your full product or just a basic or more feature restricted version. Consider whether the features in your basic offering are enough for a consumer to know whether or not the product is right for them. Sometimes limiting the features offered in a free trial is so limiting it can put off customers.

Some companies go a step further, offering a free tier in place of a mere trial. Grammarly shows customers on it’s free tier how many more mistakes they could fix if only they upgraded:

This shows real and immediate value in promoting the upgrade path, making it very clear to customers what they’ll get if they upgrade – but could be seen as limiting, because there’s no way to preview the benefit of the results without paying.

Opt-in or opt-out?

One final decision to make is whether to make your trial opt-in or opt-out. In an opt-out trial, as modeled by Netflix and Amazon Prime, credit card details are collected at the start of the trial period. When the trial period expires, the customer is automatically subscribed unless they cancel.

This kind of trial has a higher conversion rate, but may lead to increased chargebacks or faster churn.

An opt-in trial means you only provide your card details if you want to continue. Expect lower conversion rates, but more trial take-up (because you’ve removed a significant barrier to trying your product).

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