There’s no disputing that we all love getting something for nothing.
It’s a mindset that’s instilled into our psyche from youth: toys in a Happy Meal, promo cans of soda at the train station, to a monthly trial for a state-of-the-art app.
Throughout our journey as a consumer, we’re faced with companies offering us freebies, cutting their losses short-term in the hope of securing long-term gain.
The free trial model has been adopted by many companies as part of their product marketing strategy, with the process bringing undoubted benefits to the table - but could the process potentially have an adverse effect and damage your product?
During this article, we’re going to weigh up whether your business should offer a free trial to customers, outlining:
- What a free trial model is
- How to select a suitable free trial model
- Pros and cons of free trials
- How to price your product effectively
What is a free trial model?
A free trial model provides prospective customers partial or complete access to a product without charge for a limited time.
There are two types of free trial models: limited-time or limited-availability.
What is a limited-time trial?
With a limited-time trial, the consumer trialing the product/service is given full access to features for an agreed period.
For example, if a company is in the process of improving its social media management, it may negotiate a 30-day trial with a provider of the social media management tool to test the product and see if it meets its requirements.
Once the agreed time elapses, the trial ends, access is revoked, and the prospect can decide whether they’d like to invest in the product, or not. In some cases, a discounted rate may be provided by the company to convert the prospect into a paying customer.
What is a limited-availability trial?
A limited-availability trial differs from a limited-time trial, in that trialists don’t have full access to features the product has to offer.
While it could be suggested that this approach is counterproductive, (after all, the customer needs to see what’s on offer, right?), it could be argued that gating some features will pique the curiosity of the customers and entice them to sign up for the full version of the product.
How to select a suitable free trial model
Like many elements of product marketing, such as product launches, pricing strategies, or sales enablement, a blanket approach simply cannot be applied to free trials; what works for one company may not work for another - so, how do you identify a method that’s suitable for you?
There are several factors you need to consider before concluding which approach suits you best. Ask yourself:
- How long will it take for the consumer to test your product and conclude whether it’s right for them?
- Do they need access to the full range of features on offer, or can you keep some to yourself?
- Financially, can you afford to sign off a free trial for a considerable time?
- Will the trial have an impact on your sales cycle?
Pros and cons of free trials
Free trials are commonplace in the business world, yet skepticism remains as to whether offering a sneak peek of what’s on offer can be truly beneficial.
There are pros and cons that are often leveled at the free trial model, with some singing its praises, whilst others have firmly set their foot in the ‘anti-trial’ camp.
Pros of free trials
Develop customer advocacy programs
Consumers know a good product when they see one - and similarly, can spot a dud from a mile away.
If you act on insights gained via customer and market research and release an offering fulfilling customer needs, your target market will come to appreciate the value of your product, and convert at the end of their free trial.
Additionally, blowing the trialist away can also support your customer advocacy programs; if you impress them enough to drive conversions, the chances are they’ll tell their friends, family, and colleagues about your product - and this’ll do the world of good for your referral sales.
Differentiate yourself from the competition
The business world is notoriously competitive; with companies constantly searching for new ways to differentiate themselves, free trials can play a prevalent role.
In many cases, free trials aren’t groundbreaking, and it may be the case that your rivals already offer prospective customers the opportunity to try before they buy.
However, if trials aren’t the status quo, making this option readily available will reflect well on your business and generate positive relationships from the offset.
Granted, a free trial doesn’t immediately generate income for your company - that’s a perk that’ll hopefully rear its head further down the line.
However, you can take solace from knowing that if the trial is used correctly, then consumers are spending time exploring your product, gauging product features, benefits, accessibility, etc.
Generally speaking, the more time that’s invested in the trial process, the more likely they’ll be to convert, as they’ll be reluctant to endure the onboarding process for an alternative tool.
Source of feedback to improve your product
Free trials allow your target audience to use your product before they invest - but it’s not a one-way street, as far as benefits are concerned.
Once the trial period has ended, use this as an opportunity to gather feedback for product development. If they decide to invest once the trial has finished, ask what they liked, and what’d make your product even better?
On the other hand, if the decision is made to pass on your product, you need to understand why this is the case, so you can go back to the drawing board and make amendments where necessary.
Opportunity to incentivize customers
With the consumer signed up for a free trial, this is your golden opportunity to close the sale.
In signing up, your offering has piqued their interest and it’s up to you to coax them over the line and convert from a prospect to a fully-fledged, paying customer.
Incentive marketing is commonly used by businesses as a means of prompting sign-ups at the end of a free trial. For example, you could introduce a referral program whereby the customer is compensated if they encourage other people to sign up.
Alternatively, you could offer a slight discount to make the cost more accessible for the consumer once their trial has ended.
Cons of free trials
There’s no disputing there are some benefits that can be attributed to offering free trials for a product - but the model isn’t flawless.
Zero guarantees of customer conversions
One of the main critiques of free trials hones in on the fact that you’re taking the risk that short-term financial loss will generate a long-term gain.
However, this isn’t always the case - far from it. In many cases, prospects are offered a free trial, and at the end of the period, decide not to sign up or purchase the product, leaving companies to foot the bill.
Preparation is time-consuming
Preparing for a free trial is a meticulous process and key questions need to be considered. For instance:
- How long will the trial be?
- Which features will be included as part of the trial?
- How will the trial be marketed?
- How many members of the team will be required for onboarding?
Anyone considering adopting the free trial model ought to seriously consider factors such as these before introducing the set-up at their company.
Trialists may not use the product
Oftentimes, companies go above and beyond to provide free trials for interested parties, only for the consumer to not use the product.
It’s a regular occurrence and a common source of frustration for businesses who waste invaluable time and resources putting together the trial in the first place.
To negate the risk, make your trial as user-friendly as possible. Provide access to easy-to-follow tutorial videos, how-to-guides, and be on hand to answer any questions they may have. If your product is confusing, product adoption will suffer - guaranteed.
Trials are exploited
There’s no escaping the reality that products are often exploited by consumers who have no desire to buy your product, whatsoever.
It’s not unusual for consumers to register for a trial, and sign-up again with a new email address. Add to that, free trials are viewed as a source of competitive intelligence by companies, who’ll often register for rival products to see which features are on offer.
How to price your product effectively
Pricing strategies can make or break your product - if your price point is too high, you’ll alienate your target market, yet if it’s too low, you could run the risk of undermining the quality of your product.
Pricing Certified explores the essentials of pricing strategies, equipping you with everything you need to price competitively, ensuring your consumers aren’t priced out of a purchase at the end of their free trial.
Delivered by Tamara Grominsky, Chief Strategy Officer at Unbounce, Pricing Certified will help you:
💰 Understand pricing strategies
💰 Be able to change your pricing confidently
💰 Understand how to conduct a pricing analysis
💰 Identify how pricing strategies vary, depending on industry
💰 Know how to segment your pricing
💰 Understand how discounting works