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Love them or hate them, free trials are a valid way to grow your startup. Trials give your customers a risk-free taste of what they can expect by signing up for your products and services.
But before you start sending out a free trial copy of your software to every interested customer, understand the risks involved. After all, free trials are free. If your company is riding the razor’s edge of viability, a poorly timed free trial that costs a lot of money in return for little immediate gain could do far more harm than good.
Understanding what makes a SaaS trial successful can help you minimize your risk of a flop and increase your chances of converting trial signups into long-term customers. Don’t risk a free trial if you’re not positive your company can handle the lost revenue. Develop a strong understanding of your finances before you provide any products for free.
We’ve put together this list of SaaS free trial best practices to help you develop a trial strategy that will benefit your business and make your trial customers come back for more.
Follow These 6 SaaS Free Trial Best Practices To Gain New Customers For Your Startup
1. Narrow down your target demographic.
Before creating a successful trial, you must understand which customers to target. Finding your niche will not only help increase your customer acquisition, but it will help your sales team stay focused on a single goal or outcome for your limited-time offer as well as help you improve the user experience.
For example, are you interested primarily in high-dollar enterprise users? If so, consider weighting the services in your trial toward the higher-tier side of the spectrum. Or, to catch customers' interest in a specific industry, ensure your trial offers something that directly benefits those companies.
You may want to launch different trial versions and various free trial lengths based on varying user demographics until you find the perfect fit.
2. Get credit card details or payment information on file.
There’s a reason major app stores require credit card information, even for free trials. Customers will be more likely to remember and value your product if they feel like they are paying for it.
Best practices in this scenario are to remind the customer that their trial is expiring and that they will be charged. Above all, this practice builds trust between you and the customer. Whether they decide to remain a paying customer, you automatically have another touchpoint with the customer built into your email marketing and sales funnels.
Should the user cancel, this is also the perfect time to gather specific feedback on why they decided not to continue. This will allow you to optimize the product for future users based on real-life experience and customer input.
3. Set clear expectations.
Before your customer finalizes their signup, they should understand upfront exactly what they’ll be getting out of the trial period.
Make sure to clearly explain:
- The trial period duration
- The products and features to which the customer will have access
- Any products or features to which the free trial does not grant access
- Whether the customer gets automatically charged after the trial period ends
- Pricing — How much the customer should expect to be charged
- The date on which the charge will occur
- Any methods for pausing or canceling the free trial
4. Identify the customer problem and present your solution.
What problems do your free trial customers need to solve? Design your SaaS free trial to solve at least a few of those problems, while leaving your customers wanting more. As previously mentioned, focusing on a niche or specific problem also improves user experience. If you can adequately address your customers' needs and provide definite value, free signups will likely convert into paid customers and ensure customer retention over time.
5. Prioritize continued engagement with your SaaS product.
Nearly everyone has signed up for a free trial for something at some point and then promptly forgotten about it. If your customers have no reason to continuously engage with your product for the duration of their trial period, then they might simply sign up, look around for a while, and then never return.
Consider adding some small extras that will entice trial users to keep logging in and using your product for their entire trial period. You could accomplish this in a variety of ways, but some popular methods include:
- Incentivizing daily logins with reward points
- Tracking and rewarding time spent using your product
- Displaying a meter that explains the benefits the user has gained from using the product, such as “You’ve saved X dollars compared to doing things the old-fashioned way”
- Providing occasional notifications to inactive users to remind them about their active trial
To continue engagement after a free trial period, SaaS companies often give free trial users a freemium option (forever free with restricted usage). Moving to a freemium model may be a downgrade from access to all elements of your product offered during their free trial. Still, it can be beneficial in many ways:
- Users are now used to your SaaS product’s full capabilities and may have found a feature that they can’t live without, eventually encouraging them to upgrade.
- You have a way to maintain contact with your customer and remain top of mind.
6. Track your success.
Before you launch, define benchmarks by which you can gauge the success or failure of your free trial. You could track any number of metrics that make sense for your situation, including the number of customers who continue to use your product after the trial period ends (conversion rates), the increase (or decrease) in revenue following the launch of your trial, or the feedback gained from customers after trying your product.
See Also: SaaS Accounting Basics: A Comprehensive Guide for SaaS Startup Founders
How Do You Know If Your Startup Is Financially Able To Handle A Free Trial?
Zeni works with all types of B2B SaaS businesses. By providing an in-depth view of your company’s financial health, we can help you understand the strongest financial clues and triggers for determining whether offering a free trial is the right financial and marketing strategy for you and, ultimately, for customer success.
And once you’ve gained some new users from your free trials, our CFO Service experts can help you manage the recurring revenue for each new subscription.
See what Zeni can do for your startup by registering for a free demo.
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