How to Improve SaaS Free Trial Conversion Rates
When it comes to Software as a Service (SaaS), converting leads into paying users is at the heart of what every business is trying to do. It’s one thing to generate leads, but closing on potential customers is what brings in the revenue. Customer acquisition is a long process, and there is no one way to go about it.
One strategy that many SaaS businesses, whether they are B2B or B2C companies, utilize is free trials.
A free trial is a limited-time period product demo that allows prospective customers to experience your software first-hand. It is a helpful product marketing tool that showcases the value of what you can provide, but only for a finite amount of time. The goal of a free trial is to ultimately turn leads into long-term paying customers.
Free trials aren't just a great marketing tool; they are essential in the onboarding process. They give customers the opportunity to learn how to use your service and determine if it is suitable for them before initiating payment. Prospective users learn the ropes throughout the trial period and can then opt in or out to become paying customers.
Like all other forms of marketing, there are both right and wrong ways to go about free trials. Some companies have a lot more success with their free trial conversion rate, while others aren't seeing the results for which they're hoping. Luckily, free trials are hardly set in stone. There are many different tweaks to the process that a company can make.
In this article, we'll provide you with some pivotal insights on the state of free trials in the SaaS industry and present strategies to help improve your customer conversion rates on these free product usage periods.
The State of Free Trials in SaaS
Free trials are widely utilized marketing tools in the SaaS industry. According to a survey by Invesp, 65.5% of SaaS companies offer a free trial or a demo. There is no one industry standard for the length of these trials. Of the companies surveyed, 5% had trials for less than 14 days, 18% offered free trials for 14 days, 41% offered them for 30 days, and 4% provided trials between 45 and 180 days.
There are several different free trial models businesses can choose to implement. These include an opt-in free trial which doesn't require credit cards from customers when they sign up, and once the demo ends, leads can choose whether they wish to extend their use of the service and commit to payment. Another method is an opt-out free trial, which requires credit card details, and auto-renews at the end of the allotted trial period of time.
There are also limited and unlimited free trials. Users either have access to only some features with limited trials or have access to the entire product with unlimited trials. Every company does trials differently across industries, but different trial types can have different conversion rates.
For opt-in trials, according to User Pilot, the industry benchmark for conversion rate is 25%. Still, leads are more likely to give the trial a try, and customers who use the trial are more likely to continue renewing. The trial conversions stand at 60% for opt-out trials, although it is harder to entice users to try the trial because of the need for card details and a checkout process.
Trial success is also dependent on the industries in which they’re used. B2B companies typically have a lower conversion rate. According to the same report by User Pilot, the industry average for B2B was 14-25%, while for B2C companies, it was 57%. Companies with successful free trials in the B2C sphere are Netflix and Amazon, with 93% and 73% conversion rates, respectively.
As you can probably infer, there is no definitive way to say that one free trial method is better than any other. It is dependent on your goals, the service you are offering, and the customers you are targeting. There are strategies you can use to improve your process to create the ideal experience that leaves your leads wanting more.
Shorten Your Trial Length
Everyone loves to receive something free. That is why these trials are such a valuable marketing tool. They give customers something of objective value at no cost in the hopes that the value provided over that short time entices them to eventually pay. But while the goal is to showcase the value of your offering through product tours, you don’t want to give away more than you need to. Even though many companies opt for extended free trials, this might not constitute the best trial sales model in practice.
Many industry experts recommend a short trial period; Close.com states that a 14-day free trial is an optimal solution for 99% of SaaS companies, and that shorter time limit leads to more engaged trials. If customers have less time to use your service, they'll explore it more quickly and try to get the most out of it in a quicker period. This also shortens the sales cycle, leading to more rapid decisions from your customers.
By cutting the length of your trial, you might feel like you are reducing the chance for your customer to explore your product. But what is more likely to happen is that your customers will have more common conversion activities in a lessened period. They will condense the period they use your product and make a quicker decision, and you don’t need to extend the free offering longer than necessary.
Use Data to Personalize Your Trial Strategy
When you are preparing to launch your initial free trial offering, make sure you use information gathered from different resources to have a comprehensive strategy in place. Every part of your free trial should be planned, including whether it is opt-in or out and limited or unlimited. What should define this is the types of customers you are targeting. When it comes to figuring that out, data is your best friend.
Data about the type of customer you target will help you personalize the experience to best suit your ideal customer. A customized experience is extremely important to the success of your trial. According to HubSpot, 90% of consumers find personalized marketing content frp, somewhat to very appealing, and 80% of consumers are more likely to purchase when brands offer a personalized experience.
Tailor your trial to the industry you’re targeting, and use data beforehand to inform your decision. A helpful tool for this is ideal customer profiles and buyer personas, where your sales and product team can figure out the exact type of person your business and trial are geared towards.
Maintain Consistent Communication
The free trial shouldn't be a hands-off process. Just because your lead has enlisted a free trial doesn't mean they've committed. You still need to maintain contact throughout their buyer journey which can be best done through email. The initial trial is all about presenting the best version of your product and offering a great user experience; that’s why communication is extremely vital in this area.
Customer support will go a long way. A product trial can be confusing at first as your customers undergo the activation process. Bolstering their experience throughout with individual emails that are personalized will add an additional positive element to the trial. You don’t want to overwhelm the customer with outreach, but providing them with an onboarding email that details need-to-know information for initial use of your product and high-quality customer service, even for free trial users, will lead to customer retention.
The importance of the customer experience can't be overstated. According to Forbes, 96% of consumers say customer service is important in their choice of loyalty to a brand. Providing the same level of customer support to a lead using a free trial will show them your business puts its users first. Put your email list to work, and stay engaged with your leads throughout their free trial experience.
Promote the Paid Version
The purpose of your trial is not to give away something of value for free. It is to show the customer that your service is right for them and that they should invest in it. The trial user is trying to determine if what you're offering will be helpful down the road, and ideally, the trial will show them it is. Throughout their experience, you should be promoting the paid version of your product to encourage your lead deeper into the sales funnel.
With freemium products, the goal is getting the customers to transition to paying users. Free trials are a funnel activity that can promote this process, but you need to be there reminding your trial user that their best option is the paid version throughout. Whether you are doing this by offering a limited trial or through consistent marketing emails, make sure that your prospective customers see that there is more value in commitment than a short trial.
While this may seem obvious, many businesses fail to convert on free trials because they aren’t communicating and continuing to sell. Stay engaged with your leads with marketing messaging that promotes the paid version, particularly towards the end of their trial.
Utilize Customer Feedback to Improve the Experience
Whether you are offering B2C or B2B products, the most critical part of every business is that they provide customers with something positive. This drives sales and leads to repeat customers, giving consumers something they want or need. Customers aren’t just valuable because they grow your revenue, but they are also vital sources of business intelligence that should dictate your product roadmap and marketing outreach. This includes your free trial process.
Using customer feedback to optimize your free trial will give you a better sense of what your targeted consumers are looking for. With the addition of an optional survey at the end of your free trial that gathers insights into how it could be improved, you’ll gain a roadmap to future success. Unsatisfied trial users aren’t likely to voice their complaints to you without a survey. According to SuperOffice, only one in 26 unhappy customers will make the effort to complain to a business about their experience.
Unsatisfied clients lead to a higher customer churn rate, and this is something any successful business is working to avoid. Even if your trial users haven’t become customers, they still have valuable experiences using your product or service that you should review for insights. You can tweak limitations, length, and other components based on what trial users are saying to create the best possible free trial experience. By providing trial users with a low-effort way to give you feedback on the experience you've offered, you can learn what is working and what isn't and optimize your trial for a higher conversion rate.
Putting It All Together
In the Software as a Service industry, converting interested leads into paying customers is something all businesses focus on. The entire company needs to be oriented towards searching for marketing or product strategies that will make it easier to sell. When a business is focused on software as its primary product, allowing customers to experience first-hand what they would be purchasing is a meaningful way to nurture a lead.
Free trials are practical sales tools that show prospective customers the value of what your software is offering. Free trials entice buyers, but many businesses don't see the conversion rate they're looking for. This doesn't have to remain the case. There are many key ways to structure free trials to ensure that the customer experiences just enough of your product to stay wanting more.
Whether your trial is limited or unlimited, based on opt-in or opt-out, there are many additional ways you can reshape your free trial to increase conversions. If you shorten the length of your trial, use data to personalize the experience, maintain consistent communication throughout, continue to promote the paid version, and utilize customer feedback, you increase the likelihood of turning a prospect into a long-term paying customer.
Utilizing a free trial is a crucial way to grow your customer base, but like all forms of marketing, consistent tweaking and follow-ups are necessary. Your customer is far from locked in once they've agreed to a fair trial so continuing to engage with them and optimize their experience from the onset is a must. Stay connected to your leads, be adaptable and communicative, and always search for ways to improve, and your free trials will turn into high-quality conversion machines.