Free trials: something for nothing, or trial and error?

Free trials: something for nothing, or trial and error?
With an overabundance of subscription offerings all vying for the attention of potential customers, businesses must ensure that their free trials, the gateway to their service for many, provide a rounded customer experience without misleading expectations. How can subscription businesses accomplish this – and leave them wanting more?

The business and consumer landscape is awash with free trial offers – so much so that several apps have cropped up to help users manage their many trials, and to cancel them before the free period is up; DoNotPay, for example, will give you a digital credit card number from an unnamed bank (allegedly this bank is completely unaware that their service is being used this way, according to DoNotPay’s creator) that you can use to sign up for free trials around the web and never get charged.

As a 2016 Totango survey of 300 SaaS companies demonstrated, over 60% of SaaS companies draw some of their business from converting free trial users to paid:

What percentage of new business comes from free trials / freemium?

Source

Using a free trial can be one of the strongest indicators that a customer is interested in your product or service. But what can service providers do to draw them in and demonstrate the full value of their offering?

In a bold new strategy to attract even more users and defy free trial conventions, next month, Netflix will offer free, unadulterated access to its entire catalogue of films and shows in India for 48 hours, and without the need for prospective customers to submit their payment details.

Netflix has previously dabbled in offering weekly plans and discounted long-term subscriptions. Greg Peters, Chief Product Officer at Netflix, said: “We think that giving everyone in a country access to Netflix for free for a weekend could be a great way to expose a bunch of new people to the amazing stories that we have.”

This is the latest in Netflix’s various schemes across their many markets to find the balance between enticing new customers with free content and getting them to open their purses. For UK users, Netflix ditched the free trial last year, with a spokesperson claiming they were looking into “different marketing promotions in the UK to attract new members.” Instead, for prospective viewers, a handful of in-house films and debut episodes of series are free to watch.

The move is, more likely, motivated by users not committing to a full subscription and exploiting the trial period to fill up on the content of their choice free of charge. This may have been the fate that befell the short form streaming platform Quibi, now circling the drain prior to its shutdown next month. Quibi offered a generous 90-day free trial, after which only 8% of sign-ups converted into fee-paying customers. Some noted that, similarly, Disney+ dropped its free trial shortly before the hotly anticipated Broadway megahit Hamilton arrived on the service.

If your customers think that they can extract the full value from your service out of a free trial, they’re unlikely to convert, and when you have exclusive content that is in high demand, offering a free trial can be simply giving money away. Whether or not your product or service has long-term value, if they do not understand this, they are unlikely to commit.

Subscription businesses must explain their long-term value proposition and elucidate it clearly to prospective subscribers. Can your consumers properly gauge their love for your product in the time given? One free week – or even a free month – might not be enough time.

With these various free trials also comes the risk of falling into subscription traps; as the free evaluation period ends and some forget to cancel their membership, some more unscrupulous providers count on billing to kick in and extract payment from unsuspecting customers. And as we’ve covered before, a customer tricked into paying for your service won’t be a happy one. As such, MasterCard now requires the service provider “to gain cardholder approval at the conclusion of the trial before they start billing."

In an extreme example, last year, the Federal Trade Commission compensated customers of snack box subscription service Urthbox to the tune of over $84,000 after many were misled by a free trial offer of theirs; instead of a receiving a free snack box, they were forced into a six-month membership if they didn’t opt out in time, billed in a lump sum at the end of the trial. At $19.99/month, this little act of deception would have cost each customer nearly $120.

How you open up your product for free use, and whether or not your free trial should require payment details in advance, depends on who you’re selling to; not having to put down details is more certain to entice consumers, while acting as a litmus test for the commitment of businesses looking to purchase. Here are three different approaches to consider:
 
To ensure you don’t end up moving heaven and earth for a customer who ultimately flakes out, your free trial period should be limited, so as to not draw out the acquisition process, but still just enough time for them to recognise the value. By keeping your trial short, you increase the likelihood that your customers will focus on getting to know your product. If played right, the free trial is the opening of a conversation with potential customers – with a robust remarketing strategy in place, converting these free triallers into subscribers is a well-trodden path.
 
If your offering is hard to understand, difficult to use, or for whatever reason can’t deliver intended results in a typical free trial period, then perhaps offer a sandbox trial, letting your prospective customers take your product or service for a spin in a managed environment, but without completely handing over the keys. This is particularly relevant for large enterprise customers who require more of a solution sale.
 
Teasing a suite of extra functionalities just out of their reach, a freemium option is best for charming spending-savvy consumers who may otherwise have been put off by the cost of your service. However, many customers may decide that your freemium features are sufficient and not invest in a subscription, so you need to evaluate carefully where the line is drawn between free and paid, and consider if there is a place for advertising to extract some value from the free users, as the likes of Spotify and YouTube employ.

A free trial is not about giving away your product, but about strengthening your path to customer acquisition better than just testimonials or videos ever could.

Get in touch today to see how Cerillion Skyline can support your free trial strategies.