If you are a SaaS founder or stakeholder, you may be researching free trial market strategies. Even when you have a SaaS product that is easy to use, affordable, customizable, and useful, it can still be challenging to attract a steady stream of customers. To show customers how beneficial your product is, you should offer a free trial that allows them to try your tool before buying.
In some cases, users may take advantage of your free trial but fail to convert. When this happens often, it's important to use some strategies for increasing your trial to paid conversion rate for your SaaS product.
In SaaS, a trial marketing strategy allows potential customers try out your product for free for a limited time. Today, most potential customers want to try new hardware and software for free before buying. Products lead growth and conversions, and as a result, many SaaS vendors stimulate sales by using a free trial marketing strategy.
You've worked hard to create a tool that meets your customers' needs better than your competitors, and now your product should be the driving force behind your trial marketing strategy. Your product doesn't sell itself, though, even if you have customers using it again and again, which is why a trial marketing strategy is so important.
With the try-before-you-buy marketing model, users should be able to easily install the product and learn to use it. Trial marketing strategies can be either free or paid, but paid trials are usually reserved for products that are highly innovative and require more training upfront. A free trial is more likely to be successful for your product.
Free trial marketing is effective for SaaS because it serves as an introduction to your product. With a free trial, users can get an impression of your product and decide whether they want to purchase it and stick with your company. When it comes to a user's buying decision, offering a free trial is one of the biggest factors for your SaaS product.
At the same time, a user may be trying out competitors' free trials. Offering a free trial can increase the odds of users converting to long-term paying customers. The free trial conversion rate illustrates whether you are successful at helping your users identify your product's value and whether your product is providing instant value to your users.
If you believe your product is solving your users' problems but you're still failing to convert them into paying customers, there may be an underlying issue with your free trial marketing. For example, even if your product is great, your strategy may not be allowing users to find solutions to their challenges and identify your product's value. This is why it is essential to make sure your SaaS free trial marketing strategy is effective.
When you are deciding which marketing model is right for you, it's first important to know the difference between free trials and freemiums.
To acquire new customers, a free trial model offers users a complete or partial product at no charge for a limited time. Some examples include seven-day free trials, 14-day free trials, and 30-day free trials.
You can require that users submit their credit card information and charge their card if they don't cancel before the free trial expires. For a 30-day free trial, for example, the user's card would be charged after the 30 days are up. An opt-in free trial doesn't require a user to put in their payment information, while an opt-out trial mandates users to enter their payment information and manually opt out to avoid paying for the product when the trial ends.
Another way to acquire customers is with the freemium model, which offers access to part of your product at no charge. Unlike a free trial, a freemium is provided without a time limit. Potential customers can get a feel for your SaaS product and may upgrade to a paid version of your product.
Though it may seem like the only real difference between free trials and freemiums is how much time a user has access to them, your marketing strategies differ greatly depending on which one you choose. With a free trial, you can motivate satisfied users to convert when the trial expires. A freemium, on the other hand, doesn't come with a motivator for conversion. For many SaaS founders and stakeholders, free trials are the better customer acquisition model.
There are huge differences in how business-to-business (B2B) and business-to-consumer (B2C) companies operate, and these differences are clear in free trial strategies too. B2B companies mainly market their products to other organizations, while B2C companies mainly market their products directly to consumers.
If you have a B2B business, the organizations you're marketing to likely already have an idea of what they want to buy. This could make free trial strategies more straightforward and lead to higher conversion rates. If you have a B2C business, you may sell to both consumers and organizations, but you're focusing your free trial marketing efforts on consumers. You may also struggle a bit more than B2B businesses to convert users to paying customers if they aren't completely sure what they're looking for.
For a B2B company, a free trial can offer many benefits, especially for those that have a subscription revenue model. A free trial can both give potential customers a period to test your product and give committee members an example of your solution prior to the purchase. For B2B companies, conversion rates from free trails tend to be higher, so B2C companies may be able to implement some similar strategies.
For a B2C company, free trials are likely to reach a wider audience. Though this could mean a higher number of new customers, it could also mean the product reaches individuals who aren't intended buyers. This could lead to a lower conversion rate than B2B free trials, but B2C companies may still reach more potential customers.
Before you implement a free trial, there are a few considerations you should make to determine the criteria.
To increase your SaaS upgrade rates, you should be implementing methods to engage with your free trial users, such as:
Even when free trial users don't convert to paying customers, there can be other benefits to offering your free trial. After a user finishes a free trial of your product, you can gather user feedback and positive testimonials that you can feature on your website and use to edge out your competitors. User feedback can also be useful to improve your product or trial.
A high free trial conversion rate in the SaaS industry shows that you are successfully conveying your product's benefits to your users. A low conversion rate, on the other hand, suggests that there is an underlying issue to address, such as the product's quality or how well potential customers can use the product.
Use the following SaaS free trial conversion rate formula to calculate your conversions:
For example, if you have 100 trial users and 20 trial users become paying customers, your conversation rate would be 20%.
To determine whether your free trial campaign is successful, compare your conversion rate to SaaS industry free trial conversion rate benchmarks. Be sure to choose benchmarks that are relevant to your type of free trial and business model, such as an opt-in or opt-out trial and a B2B or B2C company. You may also want to come up with your own benchmarks for success by comparing your current conversion rate to a previous rate.
At KPI Sense, we'll provide unparalleled financial insight to help you leverage your B2B SaaS company's services and drive successful trials. When you choose to work with us, you'll enjoy the following benefits:
With guided expertise, we analyze metrics, forecast performance, share insights, and prepare and aggregate your data. Contact us to get started with KPI Sense to learn more about how to increase free trial conversion.