What is a Free Trial?

A free trial is an acquisition model where a product/service is rendered to customers for a limited time span, for free, so that they can learn about the product and explore its value before actually paying for it. In some cases, free trials choose to prevent the user from saving up files, or making the software unhelpful beyond a certain limit. This slightly varies from the freemium products, which are useable, but are not as useful as the premium versions.

In other words, free trial is a promotional offer that enables using a product for a certain amount of time without paying for it. During this period, you get access to certain features so that you can test the product/service and know if it meets your requirements.

Free trials usually have specific conditions:

Time limits: Most trials last anywhere from 7 days to a month, though some can be shorter or longer.

Feature access:  Customers might get full access to all features or sometimes certain premium features are restricted.

Payment information: Many businesses require credit card entry details upfront; this means that the free trial may end up converting the user into a permanent customer.

Cancellation requirements: Customers are often required to cancel before the trial period ends up, to avoid being charged.

Free trials are favorable business tactic for customers and business alike. Customers get a chance to evaluate a product’s value for money. Whereas, businesses demonstrate their product value, and convert trial users into paying customers. These trial periods are commonly used in software subscriptions, streamlining services, online courses, and many other digital products.

What are some examples of free trial?

Some examples of free trial include:

Project Management Asana

Marketing team at a startup tries the premium version for 30 days to test out advanced tracking and custom fields. They realize that the free version works well for their 10-person team, so they cancel before being charged.

CRM Salesforce

A real estate agent signs up for a 30-day trial of Sales Cloud. He imports his contact list, sets up automated follow-ups, and tracks leads. The system helps him close two deals during the trial, so he upgrades to the paid plan.

Email Marketing ConvertKit

A blogger having 2000 subscribers tries the 14-day free trial to test advanced automation features. She sets up a welcome sequence and sees her engagement rate improve by 35% convincing her to switch from current email provider.

Accounting Software QuickBooks Online

A freelance consultant tries the 30-day trial during tax season. She connects her bank account, categorizes expenses, and generates reports. The time savings convince her to keep the subscriptions year-round.

The provided examples are testament to how free trials can be a significant way of businesses showcasing their products while customers can use them to their convenience for beneficial outcomes.

How do free trials work?

The free trial model, as well as its opposite the freemium model, is a convenient means of allowing your SaaS product to market itself. With the choice of free trial of your product, the customer has a timebox with which he can utilize your product – anything from a week to a month or two.

A free trial enables users to try the product themselves, comprehend its features and determine whether the product holds the appropriate value for them prior to purchasing it. Free trial magic only makes the customer’s buying process easier, but the SaaS company needs to be able to take customers through each phase of the product and help them along the way. This can be achieved by offering good customer service, providing incentives (in the form of coupons, discounts), and presenting a smooth onboarding experience.

A free trial allows customers to try out the product firsthand, learn about its features, and determine if the product is providing the right value to them before charging their credit card or subscribing for any fees.

Free trial makes buying easier, but businesses must devise strategies to present valuable features that can hold customers allowing them to stick around your brand for a longer period of time. Poorly executed free trials can undermine customer trust rather than rendering any beneficial outcomes for the business.

What are the benefits of free trial for businesses?

Free trials have become critical components of SaaS industry, with more than 80% of subscription software businesses rendering this approach to attract potential customers. It helps in building trust, increases conversion rates, enhances customer engagement, allows top-tier customer experience and facilitates strategic data collection, alongside market penetration.

Below is an explanation of the mentioned benefits:

Trust Building

Free trials shift the customer relationship by allowing prospects to experience your product without any financial risk. This approach helps with trust building via clarity, transparency and indicates usability in your offerings. It works by:

Creating natural urgency: Complete access for a limited time encourages evaluation with zero pressure.

Reduces customer acquisition cost: Users are able to self-qualify as promising leads, reducing uninterested prospects early.

Mitigates hard selling: The product/service speaks for itself, simplifying the sales process.

Showcases product superiority: Direct comparison with competitors becomes easier through hands-on experience.

Increased Conversion Rates

Free trials outperform traditional approaches to sale by enabling prospects to explore value independently. This self-discovery creates commitment to purchase.

Some strategies that increase conversion rates are: quality demonstration, premium feature promotion, reduced churn risk, customer lifetime value maximization, and qualified lead generation.

Top-tier Customer Experience

Customer experiences are crucial for gauging brand value and improving market position for any business. Customer experience optimization through free trials helps to address common barriers to SaaS adoption making decisions easier. Businesses strategize to help customers overcome initial doubts, minimize adoption friction, eliminate fear of commitment while dispelling product uncertainty.

Strategic Data Collection

Free trials enable myriads of opportunities to gather behavioral data and customer insights that allow product development, market strategies and pricing decisions. This helps to gain demographic intelligence and awareness, behavioral analytics, conversion intelligence and product development insights. The strategic data collection process helps to innovate products, initiate improvement efforts and enhance the delivery value.

Market Penetration

Free trials serve as powerful tools to market penetration allowing SaaS companies to compete effectively against established players and rapidly build a market share. Market advantage creation involves, market education, switching facilitation, word-of-mouth generation and competitive differentiation.

What are the downsides of offering a free trial?

Revenue and cash flow impact, attraction of non-buyers, conversion rate challenges, high infrastructure cost, and product devaluation are among some downsides of free trial.

Here is an explanation for each of the mentioned downsides.

Revenue and cash flow impact: Free trials delay revenue generation and can strain the cash flow cycle especially for startups or nascent businesses with tight profit margins.

Attraction for non-buyers: Free trials often attract users who don’t intend to buy or use your services. This segment can even include bargain hunters, competitors conducting research and those who just want to spend some time using the free product.

Conversion rate issues: Many users sign up for trials but never actually use the product, leading to low conversion rates. Others may use the trial extensively but still choose not to purchase, meaning you’ve provided significant value without return.

Product devaluation: Offering something for free can create a perception that it has low value. Some customers may question why they should pay for something that was initially free, or assume the product isn’t worth its full price.

Infrastructure cost: Free trial users still require customer support, server resources, and bandwidth. These operational costs can be substantial, especially if trial users are less engaged or generate more support tickets than paying customers.

How does SubscriptionFlow facilitate businesses with free trial subscriptions?

SubscriptionFlow provides a detailed trial management software platform that enables businesses to improve customer acquisition via customizable free trial and freemium strategies. Its major features are:

Flexible trial setup

SubscriptionFlow allows businesses to create customizable trial durations based on their unique business requirements. The platform enables one-click trial extensions for those who have not fully used free trials with all trial periods easily adjustable through a user-friendly admin dashboard.

Payment management options

The platform allows cardless trials that enable access without requiring upfront payment information, thereby reducing friction for hesitant customers. Moreover, the auto-charge functionality automatically charges pre-authorized payment methods at trial end unless customers cancel.

Email automation

With automated email reminders, businesses can inform customers about trial expiry. This, integrated with dunning management features for trial end notifications can be helpful.

Personalized incentivization

Businesses can offer coupon codes, discount vouchers, and reward points systems to incentivize conversion. The platform supports personalized offers based on individual user behavior patterns and engagement levels.

Usage tracking

SubscriptionFlow tracks down trial usage with customizable KPIs and analytics to monitor user engagement. The system allows data-accelerated insights to enhance customer engagement based on usage patterns.

Reduced barriers to entry

Our platform helps businesses to open ups sales funnels by reducing entry barriers and attracts new customers with higher lifetime value. With the help of automation, payment updates are managed and no manual intervention is required. Thus, businesses can easily handle trial-to-conversion management.