It’s true that many SaaS companies are moving away from the free trial business model, but that doesn't mean that everyone should.

free trial

Usually, when I write a post, I know where I stand on an issue. I know what I'm arguing for and against, and I know what I'm recommending. When it comes to free trials though, I'm not quite there yet. In fact, in writing this post, I am inviting you to participate in this discussion with me. 

You see, when it comes to free trials, in general, SaaS startups seem to have soured on them. From what I'm observing among my peers, most are moving away from free trials and onto self-service demos. I love self-service demos, but I am undecided about whether I want to retire the free trial model altogether. 

Why doesn't it work? 

For starters, they cost your business time and money. You can't put your whole product on a free trial, so you first need to develop the free trial version of the product. To do that, you need a fair bit of market intelligence so you don't design a product that is so limited that it doesn't give users the push to pay for the full-service version, nor so expansive that running the free version is using up too much of your resources. 

You also don't know if your users are actually using the product. People are busy. Without the upfront commitment to pay, and without the need to get back to a sales rep, chances are, most of your trial customers are going to forget they signed up. The product needs to be compelling enough for the customers to download and install and use - it also needs to be dead easy to use. If someone signs up for a free trial and then has to spend 45 minutes just setting up your product, I can almost guarantee they won't use it. 

Your trial period may prove too short for the prospect to see all the benefits. There are a number of factors to consider here: How complex is your product? How long can you financially support a free trial? What effect will it have on your sales cycle - how long do you have to wait for these prospects to buy? Now, given that a number of customers never use the product anyway, figuring out what this golden period is can be really tricky (and expensive). 

Finally, there will always be some who will try to cheat the system. Let's say your product is a mighty one, and you've designed a really strong trial version, and you can see the trial numbers go up… but conversions aren't happening. Could it be that the trial version is good enough that people are signing up multiple times using different information so they can continue to use your trial version? Always a possibility. 

Why does it work? 

Now let's look at the flip side. A great product sells itself. If your product is fantastic, customers will see that during a free trial. Once they have come to rely on your product or service, they won’t want to give it up. 

Trial customers are also great sources of feedback. They're brand new to the product or service and can serve as a fantastic fresh pair of eyes. Plus, they have the benefit of coming from a diverse set of industries, business sizes, and roles. Even those trial customers who don't convert can give you valuable feedback (often the most valuable). 

You can market directly to them. You can leverage usage data to market specific features to trial users who may haven't discovered them yet. Emailers, and video primers of unexplored features can drive users to explore the whole product. While for those who are already actively using the product, the business can push custom offers to help drive conversions. 

The trial also creates a pipeline of potential customers. Even those who don't convert were interested enough to sign up to the free trial. That's something your sales team can work with

To each their own 

 trial version of the product

The trouble with generalities is that they are general. Yes, a number of businesses are moving away from free trials, but that doesn't mean the strategy is dead. It simply means it doesn't make sense for those businesses. As for SmartCue, we have a trial version but I remain on the fence. There are some clear advantages but also some downsides. 

Entrepreneurship is humbling. I've learnt that the more I acknowledge how little I know, and the less I believe my own opinions, the more likely I am to genuinely learn something. What has worked well for me so far is my curiosity and my willingness to experiment, backed by my willingness to go mad scientist on the data I collect from these experiments. I don't know if free trials are right for SmartCue yet, but I have the confidence that when push comes to shove on this decision, I'll know (because I'll have to!).