Some people make a prosperous career out of Costco’s complimentary food spread. I’ve strolled past the chimichangas a few times more than I’d care to admit. Even Bill Gates smiles at a free mini pizza bagel.
Do we always buy the tandoori chicken we just chowed down? Sometimes, but not always. We will try something if there is no obligation. If we only had the option of buying it before trying it, the chances become slimmer we make the purchase.
When it comes to business, the same rules apply. The word “free” has a magical ability to lower people’s guards. They become less suspicious and more curious.
The analytics prove it works best for offline services. People come into your store or subscribe to your service. Use the product. Fall in love with it. The trial ends, but now a funny thing happens. They can’t live without it!
It’s much easier for Blue Apron or local Crossfit or $2 Dollar Shave Club to convince you to “change your lifestyle”. The customer gets accustomed to it.
The free trial brings them through the doors. The profound love of the company keeps them around.
Let’s put online services, which are trickier, under the microscope.
Does giving your SaaS (software as a service) away for free work? If the answer is yes, what timeframe should it be? Does it convert better than a “money back guarantee?”
Paper or Plastic?
For argument’s sake, let’s give our users a 14 day free trial period.
The next biggest question is whether or not you should require credit card information before allowing the download.
Totango conducted an experiment with 100 SaaS companies about requiring credit card information up front or not. Not requiring credit card info for a trial produced better results.
It reinforces higher engagement, which is the primary goal! There is less friction, so it gets more people into the top of the marketing funnel.
If you don’t gather credit card info, be sure to have an aggressive plan to keep in touch after the trial ends.
Communicate during and after the trial period is over. Developing a lead nurturing campaign is paramount.
It’s just as important to send emails to the customer during the trial. It gives them a reminder of the date and to use it.
It also gives you a chance to address any problems or concerns they might be having.
A couple pro tips: provide a discount code for signing up early, or extend the free offer when it’s about to expire. It can provide the user more time to get comfortable with the product.
If you choose to require a credit card, make sure the terms and use of your product are crystal clear. Set up recurring payment. At the end of the trial period, the person is automatically transitioned into a customer. They will billed every month until they cancel themselves. These are successful. They work with low-cost softwares.
Let’s examine a case where a free trial skyrocketed revenue.
Everyone has heard of the ecommerce store Shopify. They have been able to dominate their competition the past few years.
It all started with an upfront, no frills free 14-day trial. It helped them change the ecommerce landscape.
They have the best customer service and lead nurturing emails in the game. I own a Shopify ecommerce store Tropical Terrors. They do a masterful job eliminating potential objections.
Experiment! You can either obtain a lot of business or learn a valuable lesson to help your business grow. Don’t be afraid to give your product away for free. It’s a great chance to kick off a relationship with a potential buyer.
According to a Quora study, it takes 40 days to achieve an 80% SaaS trial conversion rate.
Every business will be different.
Some argue that people don’t need a month to determine if they like something. They will make up their minds much quicker. Others would say there is no harm in giving a potential customer 30 days if that’s what it takes to convert them.
Make customer service THE top priority. Handle every objection imaginable. Solve problems with grace and in a timely manner.
Thank you Costco for giving us the foundation of a flawless business model.