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Simply Offering a SaaS Free Trial Increases Conversions

August 14, 2012 Article by Lincoln Murphy

For those companies who’ve offered a SaaS Free Trial and had it fail, it is hard to see how it could ever work.

For those who’ve never offered a Free Trial, the idea of adding an extra 30 or 60 days to the sales cycle seems like a bad idea; they’re doing just fine, thank you very much.

Of course, if the Free Trial didn’t “work” (help them acquire more customers), maybe they just didn’t do it right.

And for those who don’t currently offer a Free Trial, how many prospects do they not even engage with simply because they don’t offer a Free Trial?

What if the SaaS vendor realized, though, that a 30 or 60 day Free Trial doesn’t actually have to add that much time to the sales cycle?

Or what if having a Free Trial actually reduces the cost of acquiring customers sufficient to offset the hit Customer Lifetime Value might take with the delayed start…

…or what if having a Free Trial could even reduce the sales cycle AND help convert customers at a higher Average Selling Price so CLV actually expands?

High-Converting SaaS Free Trials are No Accident

SaaS and Web App companies who have figured out how to effectively use a Free Trial to get more customers know those things and understand that not having a Free Trial would literally kill their business.

So clearly, Free Trials work sometimes and don’t work other times… unfortunately the majority of SaaS and Web App vendors fall into the latter category…

… but it doesn’t have to be that way!

I’ve said it many times – I’ll say it a million more times I’m sure – if your Free Trial is failing to convert prospects to customers, it is probably doing what it was designed to do.

High-converting Free Trials are not an accident… they are designed and engineered with one goal in mind; convert customers!

How to know if a SaaS Free Trial actually increases conversions

To really know if a Free Trial increases conversions, we have to know what it is “increasing” from… and for the purposes of this post I suppose that would be not offering a Free Trial at all.

If you currently offer a Free Trial, you can actually test that – replace your Free Trial sign-up with a “buy now” button and see what happens and you’ll have your answer… (we do know putting both a Buy Now and a Try Now button has yielded very interesting results).

It is very likely only offering only a “buy now” button will result in fewer sign-ups overall because you’re asking people to buy based on the perception of value.

Big brands or well-known companies even in smaller niches can get away with this easily since they are already known and trusted in the market place.

You can have affiliates send traffic to a page with a buy now button rather than a Free Trial sign-up since affiliates are likely to be trusted advisors by the customer and the link they provide to your marketing site comes with implied trust.

But… if someone doesn’t already know, like, and trust you, getting them to buy from you on perceived value, especially in a B2B SaaS setting where trust is super-duper important, is going to be a hard sell.

For some vendors, this means having a strong Indoctrination process that gets the market to know, like, and trust them so buying becomes easier… many times this is required even to get prospects to sign-up for the Free Trial!

For other vendors, offering a Free Trial allows prospective customers to try the product and that enables the prospect to get to know, like, and trust’em in the context of evaluating the product, which then makes it easier to buy from that vendor.

And if your target market expects a Free Trial from the vendors in your space, then you probably should offer a Free Trial because not having a Free Trial would be a non-starter.

In this case, even with a low conversion rate, a Free Trial probably would “increase” conversions over not having one!

Of course, if you understand how to take people that think they’re just “evaluating” your product and get them using it and hooked on it, they’ll buy your product and not even evaluate the others!

SaaS Free Trial as a Competitive Advantage

Now, if your competition doesn’t offer a Free Trial to your Target Market, then offering a Free Trial could be a competitive differentiator, especially against large, legacy, slow, or entrenched competitors.

Imagine what you would have to do to get someone in that market to pay you before using your product if you’re new to them… it would be almost impossible because “no one ever got fired for buying [the big vendor’s product in your market].”

But if they can try it first (and you do it right and get’em hooked on and actually using your product during the trial) then displacing the legacy player might be a realistic possibility even for a small, bootstrapped vendor… your Free Trial goes from being just a competitive differentiator to a Competitive Advantage!

There are many other factors that go into whether you should offer a Free Trial in the first place…

…and the factors start with your market/customers, their expectations/requirements, how they buy the type of product you’re selling, how they evaluate products, who you can reach (buyers vs. influencers) with your marketing, etc.

And of course some factors include vendor-side issues such as what you can support technically, the resources available to build the Free Trial, budget or expertise to acquire or build a marketing automation/lifecycle messaging engine, building or procuring your subscription management, metering, and billing solution, etc.

But by far the most important factor on the vendor’s side is the company or team’s willingness to put in the effort to learn what a real Free Trial strategy is, to plan it, and to execute it.

I can’t emphasize how important it is to know how to plan, build, and execute on a real Free Trial strategy.

Strategy before Tools

Look… you can instrument your app with the latest and greatest Customer Success technologies , you can have CRM integration, you can use the fanciest lifecycle messaging or in-app messaging platform, you can integrate with the most sophisticated metering and billing solution…

…and you can STILL have a Free Trial with low conversion rates!

Tools on their own are of little value… knowing how to use them is key.

Put a different way, you can use the fanciest marketing automation tool and still automate a crappy marketing strategy.

So just going through the motions, having a marketing page that leads to a sign-up form that sends an email that has a link that you click to validate the address that lands you in the app and 30 days later bills your Credit Card or asks for payment info and being able to monitor each of those activities isn’t a Free Trial strategy.

Don’t get me wrong, you’ll probably do most or all of those, but if that was all that was required in a Free Trial strategy, every SaaS company that offers a Free Trial with that workflow would have high conversion rates.

And most don’t…

…something like 66% of SaaS vendors have a conversion rate from free to paid of less than 25%.

So if for the majority of SaaS vendors, their Free Trial causes greater than 75% of the people that sign-up for the trial to NOT sign-up, then we could safely say that overall, Free Trials don’t work, right?

Well, I also think it is safe to say – presumably with a few exceptions that all should be market-driven – that even though we’re talking about an an average conversion rate of less than 25% on their Free Trials, that probably results in more sales than if they didn’t offer a Free Trial.

But you don’t want to settle for low conversion rates when – with a clear understanding of Free Trial Strategy, a little work, and some perseverance – you could have HIGH conversion rates!

The Reason for Low-Converting SaaS Free Trials

So I’ll let you in on the secret behind most Free Trials with low conversion rates… they fail to engage the prospect.

Most Free Trials are built to further the “perceived value” concept… an extension of the brochure marketing site they created… maybe an “active” demo at best.

When I ask what a successful trial looks like for the prospect, most vendors answer with something like “the customer is able to see the difference our app will make to their business.”

Hmm… doesn’t that sound exactly the same as the goal of the marketing site? Or the feature list? Or the demo?

The Secret to High-Converting SaaS Free Trials

A really effective Free Trial strategy is one that moves the prospect from where they perceive value to where they REALIZE VALUE… and when they realize value, conversion from free-to-paid is a no-brainer.

So for SaaS vendors that understand the difference between perceived value and realized value – like the SaaS vendors I help – Free Trials increase conversions in a big way.

But just having a Free Trial doesn’t guarantee anything.

Let’s Optimize your Free Trial Conversion Rate

For immediate consultation and advice on improving Free Trial conversion rates, schedule a 60-minute meeting with me via Clarity. If you feel a more involved engagement is required for me to help you, email me with the specifics of your situation (as much detail as you’re comfortable giving) and we’ll setup a meeting to work through the particulars.

– Lincoln

About Lincoln Murphy

I help you Maximize LTV! (1k+ clients, 10k+ pros trained)

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  • Customer Success Pros: Stay Ahead of the Game with ChatGPT
  • ChatGPT in Customer Success: Generative Output to Desired Outcome
  • Stop Teaching Your Customers to Ignore You! A Guide to Effective Customer Engagement
  • ChatGPT is a Customer Success Game-Changer
  • Growth Unlocked: The Key to Exponential Account Expansion
  • Customer Success: Defined (2024)
  • Stop Confusing Free Trials and Onboarding (It’s Costing You Customers)
  • The Importance of Consistency in Customer Success Management
  • The Real Reason Your Company Invests in Customer Success
  • Customers Hate These 3 Things (and How to Avoid Them)
  • The 5 Secrets of World-class Customer Success Managers
  • Customer Onboarding: How to Design and Implement an Effective Onboarding Process
  • Eliminate Churn Forever in 5 Simple Steps
  • Customer Success: The Lost Art of Churn Reason Analysis
  • Customer Success: How to Quantify the Impact of Bad-fit Customers
  • Customer Onboarding: How to Design and Implement an Effective Onboarding Process
  • Designing a Sales-to-CSM Handoff that Actually Works
  • What is a good SaaS Churn Rate?
  • Achieve Exponential Growth by Focusing on CAC Efficiency
  • TTFV as a Sales KPI to Drive Engagement and Expansion
  • Time to First Value (TTFV) is a Customer Onboarding Goal
  • Customer Onboarding: AHA! or WTF?
  • Emotional Disconnect During Customer Onboarding
  • Bad Sales Handoffs Cause Customers to Ghost During Onboarding
  • How to Know if Customers are Actually Ghosting you
  • Why Customers Ghost you
  • The Basics of Customer Onboarding
  • Success Potential: Real Customer Success Starts Here
  • Account Expansion: How to Upsell Unsuccessful Customers
  • Customer Growth: Why Lack Of Expansion Is A Really Bad Sign
  • Account Expansion: If You Want To Grow Fast, Do This…
  • Customer Growth: Upselling Hurts Trust (When You Do It Wrong)
  • Customer Growth: The Difference between Sales and Expansion
  • Introducing the BEAST Message Framework for Customer Engagement
  • Introducing the Customer Engagement Communication Model
  • Churn Classification Framework For Customer Success Management (2024 Update)
  • Customer Success and Sales: Why the Latter determines the Former
  • Appropriate Experience is Required for Customer Success
  • What Are The Best Customer Success KPIs?
  • You Can’t Solve Upstream Problems Down Stream
  • Customer Success is a Simple Concept (Don’t Overthink It)
  • Customer Success can’t fit into Existing Frameworks
  • Those aren’t Problems. Those are Customers!
  • Customer Onboarding Success Secret: Don’t Overwhelm Customers
  • A QBR is NOT Required for Customer Success
  • Customer Success: The Importance of User or Customer Onboarding
  • How to Define Roles in Customer Success Management
  • Customer Success: High/Low/No Touch Customer Segmentation
  • Customer Success: Incorporating High/Low/No Touch into Onboarding
  • Customer Success: How to help Salespeople with Customer Segmentation
  • Customer Success: Determining Which Customers on which to Focus
  • Customer Success: Who Should Handle Upsells?
  • Customer Success: How to Reset Mismanaged Expectations
  • Customer Success: Customer Engagement Across the Entire Lifecycle
  • How to Increase Customer Lifetime Value (LTV)
  • The True Cost of Meetings in Customer Success Management
  • Meetings as a Customer Success Metric: The Misguided Path
  • No Goals, No Customer Success: Unlocking the Power of the Goal Discovery Framework
  • Revenue Roadblocks: How We’re Sabotaging Our Own Growth
  • Good Fit vs. Bad Fit vs. Ideal Customers: The Key to Unlocking Sustainable Growth
  • Opt-In vs. Opt-Out Trials: The Hidden Impact on Customer Retention and Success
  • From Transactions to Relationships: Unleashing Customer Potential with AX
  • Renewal Psychology: From an Adversarial Process to a Celebration of Success
  • Pods in Customer Success vs. Sales: A Side-by-Side Comparison
  • The Role of Pods in CSM Coverage Models: The Evolving Landscape
  • Pooled CSMs: Benefits, Challenges, and Requirements for Success
  • Beyond Touch Levels: Scaling Customer Success through Appropriate Experience (AX)
  • The Goal Discovery Framework for Customer Success Management
  • Storytelling in Customer Success: Use the Power of Goal Discovery
  • Customer Success Scaling: Capacity Planning and Resource Allocation
  • Bridging the Engagement Gap: Keeping Customers Actively Invested
  • Build a Social Proof Machine: Consistently Generate Real Advocates at Scale
  • The Untapped Potential of Social Proof through Earned Advocacy
  • From KPIs to Connection: Transforming Metrics Into Meaningful Relationships
  • 5 Outdated Email Tactics You Need to Abandon in 2024
  • Every Department Must Recognize the Value of Customer Success
  • Retention: Shifting from Reactive to Proactive to Stop Chasing and Start Leading
  • Why High Usage Doesn’t Guarantee Customer Success
  • Scaling Your Customer Success Team Without Losing Control
  • The Art and Science of Continuous Goal Alignment in Customer Success
  • Goal Discovery: The Essential Task You Never Had Time for (Until Now!)
  • Aligning Customer Success and Sales: Bridging the Great Divide
  • Motivating Action: The Hard Truth of Driving Customer Engagement
  • Customer Retention: Proactive, Reactive, and At-Risk Analysis
  • Navigating Partner Success in a Multi-Channel World
  • Unlocking Potential: How to Allocate Customers to CSMs
  • AX-Based Coverage Segments: Customer Success Evolved
  • RevOps Evolved: The Key to Rapid, Exponential Revenue Growth (2024)
  • Redefining Email Engagement: New Metrics for a New Era (2024)
  • Understand, Classify, and Effectively Analyze Churn
  • Customer Negotiation: Discounts, Retention, and Value
  • The Art of Objection Handling in Customer Success
  • Driving Exponential Growth: The Art of Selling to Existing Customers
  • NRR Panic: The Rollercoaster Ride You Never Saw Coming
  • Motivation vs. Discipline: How Knowing the Difference Skyrockets Customer Engagement
  • Why CSM Positioning is so Important (and How to Fix it)
  • Customer Status: The Hidden Motivator You Can’t Ignore
  • The Power of Curiosity in Customer Success
  • Creating Customer Success Playbooks with ChatGPT
  • ChatGPT or Bing: Which AI Tool is Best for Customer Success
  • Customer Success Pros: Stay Ahead of the Game with ChatGPT
  • ChatGPT in Customer Success: Generative Output to Desired Outcome
  • Stop Teaching Your Customers to Ignore You! A Guide to Effective Customer Engagement
  • ChatGPT is a Customer Success Game-Changer
  • Growth Unlocked: The Key to Exponential Account Expansion
  • Customer Success: Defined (2024)
  • Stop Confusing Free Trials and Onboarding (It’s Costing You Customers)
  • The Importance of Consistency in Customer Success Management
  • The Real Reason Your Company Invests in Customer Success
  • Customers Hate These 3 Things (and How to Avoid Them)
  • The 5 Secrets of World-class Customer Success Managers
  • Customer Onboarding: How to Design and Implement an Effective Onboarding Process
  • Eliminate Churn Forever in 5 Simple Steps
  • Customer Success: The Lost Art of Churn Reason Analysis
  • Customer Success: How to Quantify the Impact of Bad-fit Customers
  • Customer Onboarding: How to Design and Implement an Effective Onboarding Process
  • Designing a Sales-to-CSM Handoff that Actually Works
  • What is a good SaaS Churn Rate?
  • Achieve Exponential Growth by Focusing on CAC Efficiency
  • TTFV as a Sales KPI to Drive Engagement and Expansion
  • Time to First Value (TTFV) is a Customer Onboarding Goal
  • Customer Onboarding: AHA! or WTF?
  • Emotional Disconnect During Customer Onboarding
  • Bad Sales Handoffs Cause Customers to Ghost During Onboarding
  • How to Know if Customers are Actually Ghosting you
  • Why Customers Ghost you
  • The Basics of Customer Onboarding
  • Success Potential: Real Customer Success Starts Here
  • Account Expansion: How to Upsell Unsuccessful Customers
  • Customer Growth: Why Lack Of Expansion Is A Really Bad Sign
  • Account Expansion: If You Want To Grow Fast, Do This…
  • Customer Growth: Upselling Hurts Trust (When You Do It Wrong)
  • Customer Growth: The Difference between Sales and Expansion
  • Introducing the BEAST Message Framework for Customer Engagement
  • Introducing the Customer Engagement Communication Model
  • Churn Classification Framework For Customer Success Management (2024 Update)
  • Customer Success and Sales: Why the Latter determines the Former
  • Appropriate Experience is Required for Customer Success
  • What Are The Best Customer Success KPIs?
  • You Can’t Solve Upstream Problems Down Stream
  • Customer Success is a Simple Concept (Don’t Overthink It)
  • Customer Success can’t fit into Existing Frameworks
  • Those aren’t Problems. Those are Customers!
  • Customer Onboarding Success Secret: Don’t Overwhelm Customers
  • A QBR is NOT Required for Customer Success
  • Customer Success: The Importance of User or Customer Onboarding
  • How to Define Roles in Customer Success Management
  • Customer Success: High/Low/No Touch Customer Segmentation
  • Customer Success: Incorporating High/Low/No Touch into Onboarding
  • Customer Success: How to help Salespeople with Customer Segmentation
  • Customer Success: Determining Which Customers on which to Focus
  • Customer Success: Who Should Handle Upsells?
  • Customer Success: How to Reset Mismanaged Expectations
  • Customer Success: Customer Engagement Across the Entire Lifecycle
  • How to Increase Customer Lifetime Value (LTV)
  • The True Cost of Meetings in Customer Success Management
  • Meetings as a Customer Success Metric: The Misguided Path
  • No Goals, No Customer Success: Unlocking the Power of the Goal Discovery Framework
  • Revenue Roadblocks: How We’re Sabotaging Our Own Growth
  • Good Fit vs. Bad Fit vs. Ideal Customers: The Key to Unlocking Sustainable Growth
  • Opt-In vs. Opt-Out Trials: The Hidden Impact on Customer Retention and Success
  • From Transactions to Relationships: Unleashing Customer Potential with AX
  • Renewal Psychology: From an Adversarial Process to a Celebration of Success
  • Pods in Customer Success vs. Sales: A Side-by-Side Comparison
  • The Role of Pods in CSM Coverage Models: The Evolving Landscape
  • Pooled CSMs: Benefits, Challenges, and Requirements for Success
  • Beyond Touch Levels: Scaling Customer Success through Appropriate Experience (AX)
  • The Goal Discovery Framework for Customer Success Management
  • Storytelling in Customer Success: Use the Power of Goal Discovery
  • Customer Success Scaling: Capacity Planning and Resource Allocation
  • Bridging the Engagement Gap: Keeping Customers Actively Invested
  • Build a Social Proof Machine: Consistently Generate Real Advocates at Scale
  • The Untapped Potential of Social Proof through Earned Advocacy
  • From KPIs to Connection: Transforming Metrics Into Meaningful Relationships
  • 5 Outdated Email Tactics You Need to Abandon in 2024
  • Every Department Must Recognize the Value of Customer Success
  • Retention: Shifting from Reactive to Proactive to Stop Chasing and Start Leading
  • Why High Usage Doesn’t Guarantee Customer Success
  • Scaling Your Customer Success Team Without Losing Control
  • The Art and Science of Continuous Goal Alignment in Customer Success
  • Goal Discovery: The Essential Task You Never Had Time for (Until Now!)
  • Aligning Customer Success and Sales: Bridging the Great Divide
  • Motivating Action: The Hard Truth of Driving Customer Engagement
  • Customer Retention: Proactive, Reactive, and At-Risk Analysis
  • Navigating Partner Success in a Multi-Channel World
  • Unlocking Potential: How to Allocate Customers to CSMs
  • AX-Based Coverage Segments: Customer Success Evolved
  • RevOps Evolved: The Key to Rapid, Exponential Revenue Growth (2024)
  • Redefining Email Engagement: New Metrics for a New Era (2024)
  • Understand, Classify, and Effectively Analyze Churn
  • Customer Negotiation: Discounts, Retention, and Value
  • The Art of Objection Handling in Customer Success
  • Driving Exponential Growth: The Art of Selling to Existing Customers
  • NRR Panic: The Rollercoaster Ride You Never Saw Coming
  • Motivation vs. Discipline: How Knowing the Difference Skyrockets Customer Engagement
  • Why CSM Positioning is so Important (and How to Fix it)
  • Customer Status: The Hidden Motivator You Can’t Ignore
  • The Power of Curiosity in Customer Success
  • Creating Customer Success Playbooks with ChatGPT
  • ChatGPT or Bing: Which AI Tool is Best for Customer Success
  • Customer Success Pros: Stay Ahead of the Game with ChatGPT
  • ChatGPT in Customer Success: Generative Output to Desired Outcome
  • Stop Teaching Your Customers to Ignore You! A Guide to Effective Customer Engagement
  • ChatGPT is a Customer Success Game-Changer
  • Growth Unlocked: The Key to Exponential Account Expansion
  • Customer Success: Defined (2024)
  • Stop Confusing Free Trials and Onboarding (It’s Costing You Customers)
  • The Importance of Consistency in Customer Success Management
  • The Real Reason Your Company Invests in Customer Success
  • Customers Hate These 3 Things (and How to Avoid Them)
  • The 5 Secrets of World-class Customer Success Managers
  • Customer Onboarding: How to Design and Implement an Effective Onboarding Process
  • Eliminate Churn Forever in 5 Simple Steps
  • Customer Success: The Lost Art of Churn Reason Analysis
  • Customer Success: How to Quantify the Impact of Bad-fit Customers
  • Customer Onboarding: How to Design and Implement an Effective Onboarding Process
  • Designing a Sales-to-CSM Handoff that Actually Works
  • What is a good SaaS Churn Rate?
  • Achieve Exponential Growth by Focusing on CAC Efficiency
  • TTFV as a Sales KPI to Drive Engagement and Expansion
  • Time to First Value (TTFV) is a Customer Onboarding Goal
  • Customer Onboarding: AHA! or WTF?
  • Emotional Disconnect During Customer Onboarding
  • Bad Sales Handoffs Cause Customers to Ghost During Onboarding
  • How to Know if Customers are Actually Ghosting you
  • Why Customers Ghost you
  • The Basics of Customer Onboarding
  • Success Potential: Real Customer Success Starts Here
  • Account Expansion: How to Upsell Unsuccessful Customers
  • Customer Growth: Why Lack Of Expansion Is A Really Bad Sign
  • Account Expansion: If You Want To Grow Fast, Do This…
  • Customer Growth: Upselling Hurts Trust (When You Do It Wrong)
  • Customer Growth: The Difference between Sales and Expansion
  • Introducing the BEAST Message Framework for Customer Engagement
  • Introducing the Customer Engagement Communication Model
  • Churn Classification Framework For Customer Success Management (2024 Update)
  • Customer Success and Sales: Why the Latter determines the Former
  • Appropriate Experience is Required for Customer Success
  • What Are The Best Customer Success KPIs?
  • You Can’t Solve Upstream Problems Down Stream
  • Customer Success is a Simple Concept (Don’t Overthink It)
  • Customer Success can’t fit into Existing Frameworks
  • Those aren’t Problems. Those are Customers!
  • Customer Onboarding Success Secret: Don’t Overwhelm Customers
  • A QBR is NOT Required for Customer Success
  • Customer Success: The Importance of User or Customer Onboarding
  • How to Define Roles in Customer Success Management
  • Customer Success: High/Low/No Touch Customer Segmentation
  • Customer Success: Incorporating High/Low/No Touch into Onboarding
  • Customer Success: How to help Salespeople with Customer Segmentation
  • Customer Success: Determining Which Customers on which to Focus
  • Customer Success: Who Should Handle Upsells?
  • Customer Success: How to Reset Mismanaged Expectations
  • Customer Success: Customer Engagement Across the Entire Lifecycle
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