business

Want Skyrocketing Growth? You Need To Offer a Free Trial

For SaaS companies, offering a free trial is crucial for growth. Find out how to determine the right trial length for your product to boost customer acquisition.

Diego Poza

Sr Manager, Developer Advocacy

Apr 21, 2016 • 8 min read

A lot of young SaaS companies are skeptical of free trials. Offer a free trial, the thinking goes, and you’ll attract a bunch of freeloaders who have no intention of sticking with your product once the trial ends. As a young startup, servicing a huge customer base that will never pay you is something you can't afford.

But if your free trial is done right, you’ll actually see a huge boost in customer acquisition. In fact, many massively successful companies have free trials as a central part of their acquisition strategy—Netflix’s free trial has an estimated conversion rate of 93%, and AOL built a $166 billion dollar company using those “10 Free Hours” CDs you used to throw out.

If you want to boost your acquisition rate, a free trial is your best bet, but in order to convert free users to paid users, you must provide high-quality content, pick the right trial length, and connect with users at two critical moments.

Why Content Is The Key To A High-Conversion Free Trial Program

When a prospective customer tries out your free trial, you can’t just dump them on your dashboard and expect them to hit the ground running. A free trial is an audition, and you need to do everything you can to educate prospects about how your product can solve their problems. This means high-quality content, and a lot of it.

For example, at Auth0 we don’t expect that every one of our customers will be a code aficionado, able to seamlessly integrate Auth0 across their platform with no questions at all. That's why we publish content like our recent video on setting up Auth0 Lock, which includes step-by-step instructions and example code like this:

growth free trial lock Auth0

[source: Auth0]

In this spirit, any feature we support is covered with our in-depth documentation, and we offer guides to help developers really build their authentication process with whatever framework they use—not just plug-and-play solutions.

We’ve made available:

All of this is critical because you want customers to be as successful as possible using your product. As badly as you want it to be the case, customers will not always intuit how your product works, or more importantly, how it solves their problems. You have to show them, and content is the most powerful avenue you have for doing so.

Your product creates its own value, and your content helps your customers see it. The question is, how long should you give your customers to find it?

“Your product creates its own value, and your content helps your customers see it.”

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Why The Right Trial Period Is The Shortest One

41% of SaaS companies offer 30 day free trials. The thinking typically goes that if you don’t give your customers enough time, their trial will run out before they see your product’s value, and they’ll leave thinking it was worthless. 30 days seems like a safe bet, in that light.

This is a terrible decision.

Your trial period should be the minimum amount of time needed for a customer to get value from your product. If it only takes a week to see your product’s value, that’s how long the trial should be. In fact, Steli Efti, founder of the sales CRM Close.io, says that 99% of SaaS companies should offer a trial no longer than 14 days.

For sales-supported SaaS companies (SaaS with a sales team), this is obvious. Shorter trials mean shorter sales cycles, freeing teams up to engage with more customers.

But what if you’re running a self-service model? Price Intelligently, a price optimizing service for SaaS companies, points out that shortening your trial will still drive conversions by tapping into customers’ sense of loss aversion—our tendency to fear loss more than we covet gain.

For example, Kashflow had a 60-day free trial period. By lowering it to 14 days, their conversion rate increased by 25%. By Day 14, businesses were able to see the value the accounting software could create. By Day 60, they'd just been taking it for granted.

The exceptions to this are companies for whom value can only really be displayed over a longer period. Netflix, for example, is competing for your business with cable providers, which bill monthly. Netflix needs you to spend the whole month using their service so that when the time comes around for you to pay your cable bill, you feel like you’re wasting your money.

For some companies, it makes more sense to use a free trial and a free plan in tandem. For instance, at Auth0, we offer a 22 day trial of our advanced plans, alongside a permanent free plan which hosts 7,000 users.

We want our customers to be familiar with the functionality our advanced plans provide, so that as their product grows, they’ll be able to identify when upgrading from the free plan makes the most sense for them.

However, while your trial length should depend on your product, the most critical moments for customer engagement will always be the same.

You Cannot Afford To Miss A Trial’s First or Final Minutes

There are two do-or-die moments where you must engage with your customer: when they start your trial, and when they finish it.

Reaching out immediately after a customer enrolls in a free trial simply has to be your first step. Customers who are engaged in the first 3 days of their trial are 4 times as likely to convert later down the line. This is your chance to initiate a dialogue, personalizing the customer's experience with the product, and deepening their connection to it.

Obviously, doing this yourself is impossible at scale. Instead, you should use software like Customer.io in conjunction with Auth0’s Rules to automatically trigger targeted email campaigns to customers at particular lifecycle events.

For example, Auth0’s Segment Rule can track users’ activity and push that data to Segment, a platform that collects customer data for other tools. By turning on the Customer.io integration in Segment, you can have your email campaigns instantly adapt to real-time data:

function (user, context, callback) {
  if (context.protocol === 'delegation') {
    return callback(null, user, context);
  }

  const request = require('request');

  if (context.stats.loginsCount > 1) {
    sendEvent('Logged in');
  } else {
    sendEvent('Signed up');
  }

  function sendEvent(e) {
    const sioTrack = {
      userId: user.user_id,
      event: e,
      properties: {
        application: context.clientName
      },
      context: {
        ip: context.request.ip,
        userAgent: context.request.userAgent
      }
    };

    // Segment API returns 200 OK for all its request. For possible errors
    // you must use Segment's Debugger (https://segment.com/docs/libraries/http/#errors)
    request({
      method: 'POST',
      url: 'https://api.segment.io/v1/track',
      headers: {
        'Content-type' : 'application/json',
        'Authorization': 'Basic ' + Buffer.from(configuration.SEGMENTIO_WRITE_KEY + ':').toString('base64')
      },
      body: JSON.stringify(sioTrack),
    });
  }

  callback(null, user, context);
}

This means that when your users initially sign up, the Segment Rule will send their data to Customer.io, triggering a welcome email like this:

growth free trial welcome email

Similarly, at the end of their trial, you need to send them targeted conversion emails, building off the relationship you’ve built through prior correspondence to push them to convert.

It cannot be overstated how important it is to send conversion emails just as their trial ends. This is the last moment you have while they are still engaged with your product. The longer they're away from your product, the harder it will typically be to bring them back.

This gets back to Efti’s advice to shorten your trial periods. If you reach out to a customer either with a sales team or automated email, and they don’t seem likely to convert, you can offer to extend their trial by another 14 days. Roughly 30% of customers will take this extension, giving you the chance to really work out any pain points they’re experiencing.

How A Good Free Trial Can Do More Than Drive Conversions

The formula here is simple:

  • Your content guarantees that customers see your product’s value.
  • Your trial length keeps customers from taking your product for granted.
  • Your targeted communication nudges customers towards conversion.

Your desired outcome, in this situation, is conversions. You want customers to try your product, see its value, and become paying subscribers. However, each of these steps also presents secondary benefits.

Good content marketing can do more than improve a free trial, it can bring new customers in droves. Optimizing your trial’s length can keep you from wasting extra resources on customers who aren’t paying. And sending personalized, targeted emails can do more than convert free trial customers, it can prevent your paying customers from churning.

Not to mention, customers who try your free trial but won’t convert are still giving you usage data.

That’s not a bad silver lining.

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