Concept by Artur Ovanesyan; Illustration by Angin Jabaryan, Raivix
We all like free things. From Costco samples, coupons,
advice, it is a great tactic to get us interested. It’s no surprise that this tactic is found in SaaS products. The free trial is one of the cornerstones of letting users experience a product. Getting people to stick around after the trial is over is where things get tricky.
We’ll be discussing the different free trials, when to have a trial period, how much time to invest in your free trial, how to make the most of your free trial and what happens afterwards. Pretty much everything.
1. Opt-in vs Opt-out
First the basics.
Opt-in is where payment is asked after the trial is over. Want to guess what Opt-out means? That’s right, Opt-out is where payment is asked up front during the onboarding process.
Thanks to Totango’s 2012 study we have great data about the stregths, weaknesses and general expectations for the two models.
Based on the initial numbers, it seems like the Opt-in is the clear winner of these two models.
While Opt-in does have the advantages of a stronger sign up phase, Opt-out has a stronger paid user conversion. This is in large part due to when first time users were signing up, they already were going through the thought process of buying the product.
This initial investment phase can backfire since people are reluctant to make this sign of commitment so early on. Some companies take advantage of users being forgetful with lapsed trial periods, with their cards charged automatically. Noom, a weight loss company that takes a psychological approach to manage hunger has come under fire for their use of the Opt-out model. This is important to bear in mind with this model since your customer support team might be bombarded with reluctant customers asking for their money back.
2. Which one should I choose?
It comes down to two key questions.
If you are the newest product on the block and your brand is not that well established, going with an Opt-out model might not be the best approach. More established product brands can use this methodology because they’ve spent more time building trust.
Doing user and customer research will let you know people’s pain points, goals, objections and willingness to spend money. This research is manifested in buyer personas, a theoretical mockup of an ideal user.
This research will be amplified by looking at different customer types
- Signed up and then disappeared
- Signed up and converted
- Signed and canceled
- Currently on trial
A great thing about these personas is it helps you chase after the right customers.
3. Free trial examples
It’s important to see a good Opt-in and Opt-out example. But you want to know what’s better? Seeing how they became good examples.
3.1 Opt in example
I love the evolution of this example. GrooveHQ is a messaging platform specifically for customer support issues.
For this model, they saw a 1.11% conversion rate. Definitely some room to grow. So they talked to their users, went back to the drawing board and made their next iteration.
Their next iteration saw a whooping… 1.17% conversion rate. Sooo, what went wrong?
While they did give their users what they wanted, they realized that the UI made people unsure what they were getting in a given month, as pricing was tied to the amount of customer tickets per month.
This version saw a 4.15% conversion rate. Why? Because they offered a singular price, one CTA and a checklist of what was included. Clear and concise.
This difference might not seem like much but that difference led to a 25% increase in overall revenue. This example from GrooveHQ teaches us three important lessons
- Dig deeper into what people want before designing. Part of their iteration process was realizing later that users wanted to have a clear idea of what they were getting, which was not as clear with the second option.
- The paywall itself needs to be clear and all aspects need to work cohesively towards the goal of getting users to press the button.
- GrooveHQ says it so well I’m just going to quote them
A pricing page and trial option that works for one business won’t necessarily work for another.
3.2 Opt out example
Crazy Egg is a heatmap software company. They were dedicated to keeping an Opt-out model so they wanted to make the process as easy as possible. The issue with their design wasn’t the form itself but the lack of trust around the form.
Their original page only had a small, green “money back, 30 day guarantee” circle hovering in a bunch of white space. They (by “they” we are referring to the third party that Crazy Egg worked with, Conversion Rate Experts) used surveys to find that this page was not making people feel secure with the Opt-out process.
The page has gone through a drastic change but the form itself has only removed one field, the password confirmation. I love the common questions at the bottom, answering the obvious inquiry: Why do you need my credit card for a free trial?
Their answer is master class:
“We ask for your credit card to allow your membership to continue after your free trial, should you choose not to cancel.”
The copy is about empowering the user to keep enjoying the product and it gives them a sense of agency by mentioning their option to cancel.
The big lesson that Crazy Egg teaches here is to build trust. The top third of the new page is dedicated to building trust and authority. They do a little name dropping as well with the other companies they’ve worked with.
All of these changes resulted in a 116% increase in trial sign ups.
4. Do I need to have a free trial?
The short answer: Probably.
The long answer: It depends on your product and how established it is. Free trials, regardless of the model, have become a near universal part of user onboarding. But there are a few exceptions to the rule. You may have noticed a trend happening with streaming services where free trials are getting rarer. Netflix, HBO, and other platforms are slowly getting rid of their free trials. They can do this due to how established they are (everyone knows what to expect and what they are getting) and their somewhat addicting content. It’s a fairly safe gamble for them because people always want entertainment.
5. How long should a free trial be?
Mr. Levine is correct, if users can’t recognize and explore the utility of a product in under two weeks, the trial is not the issue here. The two week trial is important for two reasons.
- It creates a sense of urgency.
- It gives users a chance to explore the AHA moments that live outside the initial sign up phase.
These AHA moments, where users see and experience value within the product, live at various points in the user onboarding experience. These later AHA moments can really drive product adoption and customer growth.
6. Trial benchmarks
Image credit: Alex Artsibashev
The harsh truth is that you can have a great product, fairly priced, great customer service, a great answer that truly solves a customer’s problem and you will still probably have a low conversion rate.
“The best SaaS companies with opt-in Free Trials see a free trial-to-paid conversion rate of > 25%. Less than 25% and we know we have to work on optimizing for conversions.” A good amount of people that signed up were simply not the right fit or were not ready. And that’s fine.
For Opt-out the expectations are little higher, with best SaaS companies seeing a 60% conversion rate.
I want to emphasize the fact that these numbers came from the best SaaS companies so these kinds of numbers are long term goals. Very long term goals.
7. How do I get my users to convert into customers?
Image credit: mk.s
Getting higher conversion rates is something that you usually have to inch your way towards. So, what are some small steps that can be done right now?
Make sure people can access your product easily. Don’t hide the utility of your product in unnecessary steps. This is where a great onboarding approach can help tilt the scales in your favor. Having an intuitive and smooth onboarding experience for your product can increase the chances of users becoming customers.
One tactic that you can invest in, regardless of your trial model, is having multiple ways to help your clientele. This can be done through developing
- A robust FAQ center
- A chat feature (a big plus is if this easily leads to a real person)
This approach can also be extended to your sales team. Having a conversational sales approach that is there to inform rather than solely focused on upselling can help users become customers. Offering 1-on-1 demos is one great way to do this.
A refresher of the types of users that you should be targeting
- Signed up and then disappeared
- Signed up and converted
- Signed and canceled
- Currently on trial
This is called user segmentation and is important when creating your email campaign. You want your messages to be tailored to the right types of users. This can be achieved with an email campaign that has the right messages at the right time.
- A welcome message when users start
- When people have abandoned mid trial
- A message for when people have achieved an AHA moment
- When the trial is almost over
- When people have completed their trial
Being proactive is a great way of fighting against churn.
Sometimes it just comes down to price. Having a “limited time offer” really does help with conversions. This tactic also creates a scarcity mentality, an effective marketing tactic common in retail environments. This tactic can also be woven into the next step.
There’s few feelings more irritating than looking through your credit card statement and seeing a charge for something that you forgot. If only someone gave you a heads up!
Not only do these emails give the users a sense of trust but it’s a great chance to build on the feeling of scarcity because time is running out.
Like most of these options, this one might sound like a no-brainer, but it still needs to be said. Your copy, graphics design, ui designers, marketing, customer support, and more, have been building to this moment: the user deciding to buy the product.
Don’t make it hard to upgrade. Make it easy. Make it beyond easy.
When you are designing and supporting the trial procedure for your product’s onboarding experience, this moment is a nexus for several departments, especially marketing and product. Sales will have a role as well, when it comes to convincing those that are still on the fence.
Freemium is a way of giving users a taste of the product, but just the bare minimum features.
There is no time limitation with this model, just limitations within the model. Therefore it is more of a business model rather than a specific trial. But…
There are ways that freemium and free trials can work together, a hybrid model. Hubspot is a great example of this. They have a solid freemium product in the form of their CRM option.
In a 2019 interview, Kieran Flanagan, the VP of marketing, discusses the reasons why Hubspot went with a freemium model that was essentially a solid product on its own.
This tactic is not nearly as common as the free trial models. This is usually reserved for larger companies that have a robust product that still entices people even when it’s stripped to its freemium form.
The trick is keeping the key features just out of reach. This will frustrate some users (okay it will frustrate a lot of users) but for a certain number it will be what makes them take the leap.
9. What happens after the trial?
The first two weeks are an important part of the trial period. But what about the time after? How much time should you measure after people convert?
The first 90 days.
These three months are vulnerable, not as vulnerable as the 14 day trial period, but still something that you should keep an eye on.
Having a great onboarding experience as part of your trial, no matter the model, is a great way to encourage users to become customers. The fastest way to ruin your trial period is to have people struggle in your product. The trial period is a time sensitive moment where the most support needs to be present. Having an amazing user onboarding experience is not only great for your trial period but also a competitive advantage.