I am frequently asked to help SaaS, Web App, and Cloud companies on strategies to Accelerate Profitable Growth.
One way we frequently achieve rapid and long-lasting results is by Accelerating Customer Acquisition through the Optimization of their Free Trial Strategy.
To get started you need to understand that a Free Trial isn’t required. But…
A Free Trial isn’t required, but…
While it isn’t required that B2B SaaS companies offer a Free Trial, in my experience, a Free Trial is either:
1) Expected by the market to the extent that not offering a Free Trial is a non-starter.
In markets like this, if you even want to get a prospect into your sales funnel, you’ll need to offer a Free Trial or they won’t even engage with you.
However, done correctly, your Free Trial could actually be a competitive advantage in this type of market by engaging the prospect from the beginning, getting them so invested in your product that they convert to a paying customer and don’t even evaluate the other competitive products.
2) Not expected by the market but could be a competitive advantage against incumbent legacy software competitors.
This is very true in more staid niches or verticals where the incumbents are old, comfortable, they set the rules, and where they don’t really listen to the customers / prospects (they know best, right?) about how they’d like to evaluate and procure technology products and services.
There is a very real opportunity to offer a Free Trial as a way to disrupt the status quo and gain rapid market penetration.
On the other hand , of course, a poorly executed Free Trial strategy – even in this type of market – could backfire and drive customers away from your offering and back to the incumbents, so you’ll want to make sure you do it right.
OK, but Free Trials aren’t for ‘Real’ Products, right?
I just described two scenarios where Free Trials could be a competitive advantage and in one of those scenarios not offering a Free Trial would be a non-starter for any level of real penetration in the market.
Given that, I find it interesting that there are still many CEOs and executives within some SaaS companies – and certainly within many of the traditional software companies that I help with their Cloud Strategy – that feel their product is too “big” to offer Free Trials.
The pushback I get from these – often large – companies is that “Free Trials are for toy apps, not for our ‘real’ product.”
Those same CEOs and SaaS executives are surprised when I tell them that many of the companies I help are organizations with annual revenue in excess of US$1 Billion, have a Global reach, are very successful and have strong brand recognition in and even outside of their given market.
Hardly startups and hardly little companies with toy apps, right? And even they realized that…
Free Trials can Rapidly Accelerate Customer Acquisition!
Even though they have large and successful product lines or services, the SaaS company executives I help all realize – admittadly after I’ve had the same conversation with them – that Free Trials can be used to accelerate Customer Acquisition while reducing the cost to acquire those customers.
Even more, they recognize that when done correctly, a Free Trial can be leveraged to not just convert more customers, faster, but to convert those customers at a higher Average Selling Price (ASP) than the prospect originally thought they would convert at.
A major goal of all SaaS vendors is (or should be) to expand revenue and grow Customer Lifetime Value (CLV). Done right, a Free Trial can begin that expansion from the very beginning of their lifetime as a customer!
But surely I must only help the CEOs and executives of companies that sell to individual users online with a credit card, right?
First of all, there are some very big businesses out there that generate massive amounts of very profitable revenue “just” selling to individual users with a credit card; don’t downplay that to your peril.
Free Trials provide your sales force with Leverage
That said, you might be surprised to learn that – while I do help the CEOs and Executives of many SaaS companies that have a completely e-commerce, self-service, credit-card based sales process – many of the companies that I work with also have a very talented and extensive Global sales force and pre-sales engineering organization that interact and help their prospective customers through the sales process.
These companies, rather than shunning Free Trials for being only for “smaller, toy apps” have figured out how to leverage well-designed Free Trials with their various product lines – SaaS and even some legacy, on-premises software – to effectively and efficiently scale that sales and pre-sales engineering force while delivering a great pre-sales, conversion, and post-sales on-boarding experience for their customers.
So, the next time you start thinking “we’re too big/complex/enterprise to offer a Free Trial” stop what you’re doing, call me, and setup a meeting to discuss how to Accelerate your Profitable Growth… and that might be by offering a Free Trial.