Freemium is free-forever, Free Trials have time limits and the psychology of the two COULDN’T BE MORE DIFFERENT!
I got this question from some random person and I thought you might be interested in in my response. Feel free to comment if you have similar experiences and would like to weigh in.
Q. What are the pros and cons of offering a trial version that is time limited vs. feature limited?
A. It depends on your overall goals as a company. It really is that big of a decision.
Once you have a strategic direction in place for the company, it should be clear what you’ll be doing with your “Use of Free.”
There is a HUGE difference between “free trial” and “free in perpetuity” – the latter being “Freemium.”
I see a lot of companies lately offering both a free trial and a free-in-perpetuity version.
Essentially, they’ll offer a free trial of any of the tiers or bundles – which is great – and at the end of that trial, you can pay, close your account, or downgrade to the free.
This is not new, obviously, but it is something I’m seeing a lot more lately.
How it is playing out is debatable, though, and it is because people don’t clearly understand what they’ve gotten themselves into.
Many people don’t realize that by offering a feature-limited version of their service that doesn’t expire they are now in the Freemium game and that the dynamics and mechanics (read: psychology) of Freemium now apply.
That is a subject all its own but just be aware that if you have a free trial that has no time-limit, but has limitations on features, usage, etc. that you fall into the Freemium trap and if you don’t know what your doing, you could have major conversion issues.
Also consider the fact that the people you have placed in the “free” version have already tried and decided NOT TO BUY your premium product.
You need to be very clear as to why you still want them around. How are you going to monetize them in other ways or clearly understand how to generate revenue from them in the long-run? If you don’t know, then why do you want them around?
What is the quid pro quo for their free use of your product? If you don’t know what it is, or don’t fully understand how you’ll get them to some day be interested in moving to the premium product, perhaps a free-in-perpetuity offering is not for you.
On the flip side, a time-limited trial – with or without feature limitations – is a different animal completely.
The expectations by the customer are different, your expectations as a vendor are different, its easier to plan a sales cycle around a time-limited trial, etc.
Free, time-limited trials are meant to allow a user – from there perspective – to kick the tires before they sign-up and become a customer.
And by the way, this is absolutely expected in B2B SaaS.
But there is a secret to time limits… and if you want to know what the BEST length of a Free Trial, you can find it here in my Free Trial Resource Guide!
So, pros vs. cons… that isn’t the right way to look at it. Its all about your overall strategy and aligning with the market…
If you’ve been in-market at least 6 months and are curious how we could Accelerate your Profitable Growth – including your use of Freemium or a Free Trial – contact me and we’ll setup a time to discuss your options for improving and accelerating customer acquisition.
– Lincoln
(972) 200-9317
About Lincoln Murphy
