For SaaS vendors, the Purpose of a Free Trial is to create a customer. Period.
If you don’t agree with that statement then you really won’t like pretty much everything else I’m going to say in this article.
Free Trials are not for tire-kicking freeloaders – and if that’s what you’re getting in your free trial, you may want to think about identifying your Ideal Customer Profile and getting them into your trial – because a Free Trial of a Premium product is not Freemium. It’s not a giveaway. It’s not a gift.
Those people who sign-up for your Free Trial are what we call Prospects (prospect is short for Prospective Customer) and you need to treat them that way. There is a lot of potential value stored in the prospects that signup for your Free Trial… and designed correctly, your Free Trial Strategy can unleash that value in several ways.
Let’s dive into those, shall we?
1. Optimized Free Trials Increase Conversions
You get prospects into your trial to – ideally – convert them to customers (assuming you agree with me about the sole purpose of a Free Trial).
And I know that for many SaaS companies, every single customer you get comes through that Free Trial.
However, from my experience working with companies ranging in size/maturity from smaller, early-stage companies to those with more than $1B/year in revenue, I can bet that LESS THAN 25% of the prospects that enter your Free Trial actually become customers.
And even though more than 75% of your potential customers – prospects you worked hard and paid a lot to get into your trial – are getting squeezed out by your Free Trial, you were probably thinking it’s something else that’s causing low conversion rates, not your Free Trial.
It’s not… your Free Trial strategy is broken… you need to fix it – to optimize it – so you can convert more customers!
2. Optimized Free Trials Build Trust
People want to try before they buy. They either have a list of things to check off during their “evaluation” of your product or they need to see for themselves; not just take the salesperson’s word for it.
Think about why you offer a Free Trial in the first place. It is so prospective customers can get to know your offering before paying for it…
… remember, they don’t already know, like, or trust your company or product yet.
And in B2B especially, trust is huge… trust that your product does what you say it does, trust that you’ll support your customers, trust that you won’t rip them off, etc.
When your prospect can see for themselves that your product will help them achieve their Desired Outcome, that’s better than any convincing you could do.
3. Optimized Free Trials Convert Customers Earlier
We all want shorter sales cycles and Free Trials – when optimized properly – convert customers faster than they otherwise would convert.
The faster you can convert a customer, the sooner they’ll start getting value, the sooner you can upsell them to more seats, add-ons, etc. and ultimately, the higher their customer lifetime value will be. Even if you just convert customers two weeks sooner than before, at scale — across hundreds or thousands of customers – that can really add up.
Which is why Free Trial length absolutely MUST be decoupled from the behind-the-scenes sales process, including conversion timing.
So if you’re trying to figure out your sales cycle length based on your current Free Trial length… you’re doing it wrong.
Once they’re in, your job is to convert them into a paying customer ASAP regardless of the free trial length.
I helped one SaaS company take their average conversion time on a 30-day Free Trial from 42 days (yes, an average of 12 days post-expiration) to 3 days. Oh, and through the use of creative discounts I helped them drive their Average Subscription Value (ASV) up by 33%.
4. Optimized Free Trials Increase Engagement
Instead of thinking “what’s the minimum features and functionality I can give these freeloaders?” think instead “what’s the maximum I can give my prospects during their trial?”
Why would you want to limit access to the things that makes your product great?
If you sell Ferraris, would you go out on a test drive with the prospect and say “okay, let’s do this… but let’s keep the top up… oh, and keep it under 50mph.” WHAT? No, that’s insane.
You want the top down so the prospect can feel the wind in her hair, you want her to speed by everyone else, and you want her to drive by those buildings downtown that are like mirrors so the prospect can literally see herself in the car.
The same thing goes for the Free Trial of your SaaS product. While admittedly (probably) not as cool as a Ferrari, that same mindset should be employed. We don’t want to limit their experience with the product, but rather expand it.
And we want them to invite others to help “test” or “evaluate” the product, too.
5. Optimized Free Trials Increase ARR/ACV/ASP
When the prospect has expanded their engagement in the product by being exposed to features they might not have thought they needed when they signed-up and getting others within their organization to help “test” the product, it’s easy to understand why a customer will pay you more when they convert.
Whether by adding more seats, including add-ons, or otherwise requiring more of the product or additional services to get started post-conversion, increasing engagement during the trial can have a compounding effect on the level of revenue generated by each new customer.
You can even use strategic discounts increase the amount the customer pays at conversion.
6. Optimized Free Trials Plant the Seeds of Massive Success
The early days of your relationship with your customer are critical; whatever analogy you want to use (planting seeds, laying a foundation, etc.), just know that whatever happens in the first stage of engagement (a period of time that’s unique to your situation) really does impact the long-term growth of your customer as a customer.
And the Free Trial – even though (or especially because) it is pre-sales – is where a lot of seeds are sown; for better or worse.
And if you have the opportunity to plant seeds of Massive Success – instead of seeds of churn – during the Free Trial, you should. And you do. So you should.
Always remember that Customer Success starts at the first point of contact with the customer and continues across their entire lifecycle… if done correctly, starting with their experience in the Free Trial, that lifecycle should be much longer than it otherwise would be (more profitable, too).
7. Optimized Free Trials expand Customer Lifetime Value
When you plant the seeds of Massive Success early and you convert customers at a higher ARR out of the gate, you’re on the road to a huge spike in Customer Lifetime Value.
A customer that converts earlier, pays you more initially, stays longer, pays you more over time, and brings in other customers through advocacy (because they achieved their Desired Outcome through their interactions with your company)… that’s a pretty awesome outcome.
So there you have it… 7 pretty compelling reasons to optimize your Free Trial.