Free trial subscription: Tactics for turning free users into paying customers

Did you know that the average free trial conversion rate for SaaS companies hovers around 15% to 25%? That means a notable chunk of potential customers are slipping through the cracks. It also means SaaS companies need to find ways to make their free trials more effective.

In this article, we'll explore proven techniques to turn those free trial users into paying customers.

Read on to also learn:

• How to craft an effective onboarding process
• The importance of highlighting core product features
• Strategies for providing exceptional customer support
• How to convert free users with strategic offers
• Tactics to address barriers to conversion
• Why pursuing highly active users is crucial

Before diving into our tips and strategies, we need to explain what a free trial subscription means in the SaaS context.

What is a free trial subscription, and why do it?

Free trial subscriptions are a popular strategy many businesses use, particularly in SaaS. Now, how do free trials work? They allow potential customers to test a product or service for a limited time without paying.

It’s about allowing users to explore the features, assess the value, and determine if it's the right solution for their needs.

They are a way for SaaS businesses to display confidence in their solution and allow users to "try before they buy." This approach can be quite effective for products that need some engagement in order to fully appreciate them. It also removes the barrier of long-term, upfront financial commitment.

Types of free trials

Companies often adopt different models depending on their product, target audience, and goals. Here are a few common types:

• Time-limited free trials: These are perhaps the most common type. Users get full access to the product for a limited time, such as 14 or 30 days. This approach creates a sense of urgency and encourages users to explore the product quickly.
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• Feature-limited free trials: In this model, users can access basic features for free. The catch is they need to upgrade to unlock premium functionality. This method allows users to experience the product’s core value while enticing them with extra capabilities.
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• Freemium models: This approach offers a basic version of the product for free indefinitely, with the option to upgrade. It allows users to become familiar with the solution at their own pace and can be effective for building a large user base.

Benefits of free trial subscriptions in SaaS

Free trial subscriptions offer several advantages for SaaS companies:

• Higher conversion rates: By allowing users to test the product, free trials can boost the likelihood of conversion. When users see the value, they are more likely to become paying customers.
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• Less customer acquisition costs: Free trials can be a cost-effective way to get new customers compared to conventional marketing or sales approaches. The product itself is what’s doing the heavy lifting.
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• Improved customer satisfaction: By ensuring a good fit between the product and the user's needs, free trials can lead to less churn. It’s important for the experience not to change significantly when they subscribe to avoid discrepancies.
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• Valuable user feedback: Free trials offer an opportunity to gather feedback from potential users. This feedback can then be used to improve the product and onboarding process. It’s a great chance to feed your continuous improvement loop.

Free trial vs. Reverse trial

A free trial subscriptions offer access to a product before payment. A reverse trial gives users full access to all features for a limited time, and then it reverts to a limited free version.

This strategy aims to create a strong initial impression. Then the goal is encouraging users to upgrade to keep the full functionality they've become accustomed to.

In essence, free trials are about demonstrating value upfront. Reverse trials focus on creating a sense of loss aversion. Both approaches can be effective, but the best choice depends on the specific product and target audience.

Tip: Interested in learning more about reverse trials? Check out our blog post on reverse trials for SaaS.

How many people upgrade to paid after the trial?

Conversion rates can fluctuate greatly based on several factors. Consider the product complexity, target audience, and effectiveness of the free trial.

Let's dive into some real-world examples to see how free trials can either drive impressive results or fall short of expectations. Let’s start with cases where it worked:

When free trials work wonders

Here are three real-life cases where free trial subscribers became paying customers:

• Zoom: The video-conferencing platform Zoom has seen remarkable success with its freemium model. Zoom's growth and widespread adoption can be partly attributed to its free tier, which encourages upgrades for advanced features and increased usage limits.
  
  In fact, the number of $100K+ businesses using Zoom is up 42.5% since January 2022, indicating mass adoption.
• Calendly: The scheduling automation platform Calendly offers a free trial with access to basic features.
  
  Their success is linked to a user-friendly interface and clear value proposition, which helps users quickly understand the benefits and encourages them to upgrade to advanced features.
  
  ‍In a report about Calendly’s rise by Elevation Capital, it’s stated that there was a surge in conversions. Their freemium model is among the reasons for such accelerated growth.

When free trials fall flat

Now, we’ll share some studies. These show how and why some free trials can fail to deliver positive results. Let’s take a closer look:

• Lack of product-market fit: A study by CB Insights analyzed 101 startup post-mortems and found that the top reason for failure was a lack of market need.
  
  Their report results highlight that even with a free trial, if the product doesn't solve a real problem for users, conversions will likely be low.
• Baymard Institute's checkout usability study: This research indicates that one of the reasons why online shoppers have abandoned an order in the past quarter is solely due to a "too long/complicated checkout process."
  
  This applies to free trial sign-ups as well. A complex or lengthy sign-up process can deter users from even starting a free trial. Think asking for credit cards during sign-up or requiring too many steps to start.

How to make your free trial subscription pay off

A free trial subscription can be a powerful tool for attracting new customers, but only if done correctly. Here's how to make your free trial pay off:

Offer an easy onboarding process

First impressions matter. A smooth and engaging onboarding experience is crucial for getting users invested in your product.

Guide users through the basic features and functionalities with interactive tutorials and product tours. Consider incorporating progress bars or checklists to give users a sense of accomplishment as they complete each step.

Make the sign-up and account creation process as quick and painless as possible. Minimize the information required upfront and allow users to easily connect with existing accounts (e.g., Google or social media logins).

Pro tip: Allow users to skip certain steps and return to them later to avoid overwhelming them initially. The easier it is for users to get started, the faster they can experience the value your product offers.

Highlight core product features

Guide users towards the features that will solve their pain points. Use in-app messaging, tooltips, and email sequences to highlight the features that address the user's specific needs.

For example, if a user signed up for your project management software to improve team collaboration, emphasize features like task assignments, shared calendars, and communication tools.

Remember to also gently nudge users to explore different functionalities with subtle prompts and suggestions. This strategy can help them discover new ways to use your product and experience its full potential.

Pro tip: Consider using personalized in-app messages based on the user's activity or industry to make the suggestions more relevant and engaging.

Provide exceptional customer support

Be there for your users when they need you. Responsive and helpful support can make a big difference in their free trial experience. Here are some actionable tips:

• Offer immediate support through live chat for quick questions and troubleshooting. Remember to keep your live chat staffed with knowledgeable and friendly support agents who can quickly address user inquiries.
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• Provide an extensive knowledge base or help center for users who prefer to find solutions unassisted. Organize your help resources by topic or feature, and make them easily searchable. Consider including video tutorials or FAQs for common issues.
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• Consider offering webinars or individual support sessions to help users get the most out of the free trial. This approach can be particularly useful for enterprise-level products or users who require tailored onboarding.

Convert free users with strategic offers

As the trial period nears its end, strategic offers can encourage users to subscribe or upgrade to a paid plan. Create a sense of urgency with limited-time discounts or special offers for users who convert before the trial ends.

For example, offer a discount on the first month's subscription or provide access to a premium feature for free.

Remind users of the additional value they can unlock by upgrading to a paid plan. Showcase the premium features that are not available in the free trial to entice them with enhanced capabilities.

Pro tip: Use case studies or testimonials to demonstrate how other users have benefited from these premium features.

Offer a variety of subscription plans to cater to different needs and budgets. Consider monthly, annual, or usage-based plans to give users choice and flexibility.

Pro tip: Highlight the most popular plan or offer a recommendation based on the user's usage during the trial.

Address barriers to conversion

Understand why some users don't convert and proactively address their concerns. Follow these tips:

• Reach out to users who haven't converted to understand their reasons. Use surveys, feedback forms, or exit interviews to gather insights into potential barriers to conversion.
  
  Ask specific questions about their experience with the product, pricing, and features to identify areas for improvement.
• Ensure your pricing plans are easy to understand and compare. Avoid complex pricing models that might confuse potential customers. Use clear and concise language to explain the features included in each plan and highlight any differences.
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• Reduce the perceived risk of subscribing by offering a money-back guarantee or a no-obligation trial extension. This approach can give users more confidence in their decision to upgrade.

Pro tip: Clearly communicate the terms of the guarantee or extension to build trust and transparency.

Pursue highly active users

Focus your efforts on the users who show the most promise. Spot the user segments or cohorts that are most likely to convert based on their behavior during the free trial. These are the users who are actively engaging with your product and experiencing its value.

Use analytics to track user engagement and identify patterns that indicate a higher likelihood of conversion.

For example, users who frequently log in, use multiple features, or invite team members are more likely to convert. Focus your marketing and communication efforts on these high-potential users.

Pro tip: Consider offering these users exclusive incentives or early access to new features to further encourage conversion.

How Orb helps optimize free trial subscriptions

We've explored the ins and outs of free trial subscriptions and their impact on SaaS conversion rates. But how can you effectively track user engagement, gather valuable insights, and ultimately convert those free trial users into paying customers?

That’s when you should be using Orb.

Orb is a done-for-you billing platform that helps you optimize your free trial strategy and drive revenue growth. Whether you're a budding startup or a scaling enterprise, Orb provides the tools and insights you need to turn free trial users into loyal subscribers.

Here's how Orb can help you make the most of your free trial subscriptions:

• Track and analyze user engagement: Orb's usage tracking allows you to monitor how users interact with your solution during the free trial period. Learn which features are most popular, spot potential roadblocks, and tailor your onboarding experience to maximize engagement.
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• Gain conversion insights: Orb provides detailed reports that shed light on user behavior and conversion patterns. Find the factors that drive conversions and optimize your free trial strategy accordingly.
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• Experiment with pricing and packaging: Orb's flexible pricing models and plan versioning features let you experiment with different pricing strategies. We help you find the sweet spot that maximizes conversion rates.
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• Automate billing and invoicing: Orb automates recurring billing and invoicing. We help ensure accurate and timely payments. Orb allows you to free up your team to focus on what matters most — acquiring and retaining customers.

Ready to boost conversions of your free trial subscriptions? Learn how Orb can help you maximize the effectiveness of your free trial subscriptions. Check our flexible pricing options to find a plan that aligns with your needs.