Your product offers a free trial but your users aren't converting when it expires?

Most of the time the worst part is that you don't have any data to figure out why users stopped using your product. Even if you reach out, feedback is usually sparse and often doesn't reveal any useful patterns you can look into.

In response to that, a lot of time and energy is usually spent tweaking the onboarding flow or marketing funnel.

But there's a simpler, better way to increase your conversion rates. Let's see how it works.

Why a free trial is a hard sell

There's a lot of debate whether having a free trial is the best way to acquire new customers.

The clear upside of offering a free trial is that the barrier of entry is extremely low. An E-Mail address and a password is usually enough to get new users into the door. The more users you have onboarded, the more likely it is that they talk about your product in their peer groups and network (assuming it solves a real pain). Even better if your product has built-in functionalities which incentivize your users to invite others. This mix of Word-of-Mouth and network effects kick-starts the growth flywheel which will attract even more users. Rinse and repeat.

Eventually a small percentage of your overall user base converts and upgrades to a paid plan.

Hundreds of large-scale companies followed this exact playbook. Given their success it should be a no-brainer to follow this strategy as well, correct?

Despite the aforementioned upsides there are also clear downsides to this approach. Having more users usually translates into more customer support requests your support staff needs to handle. In addition to that it's tricky to get the math right such that you can use the revenue you generate via your paid plans to finance the resources and infrastructure necessary for your free trials.

There isn't a clear, definite answer whether you should offer a free trial or avoid it at all costs. At the end of the day it all comes down to the type of product you sell and the audience you're serving.

Regardless of the way you acquire new customers there's one metric you should monitor closely when onboarding new users: User engagement.

The core problem with free trials

Low user engagement is at the very core of problems related to free trials.

Given that one only needs an E-Mail address and a password to sign up for your product it's an easy decision to take the leap and give it a try. Testing it is free after all and who doesn't like getting something for free?

The issue is that finding the time to sit down and "work with it in the next couple of days" usually never materializes. Life gets in the way and sooner rather than later the trial expires and your users are locked-out, never to be seen again.

Sure, this isn't always the case but more often than not people just don't get around testing your product enough to uncover the benefits they'll experience when using it in their day-to-day to solve their problems.

Free plans and "asking for the credit card upfront"

One solution to mitigate this problem is to offer a limited, "always free" plan. This way users will have enough time to tinker around and assess whether your product is worth its money. But this only kicks the can down the road as you'll likely face the same issue of low user engagement as before. In addition to that you open up a can of worms because now you have to deal with all the other challenges a free plan entails:

  • Even more customer support
  • Figuring out what to offer in the free plan and what to put in the paid plans
  • Ways to incentivize powers users of your "always free" plan to upgrade
  • Increasing spent on infrastructure and other resources
  • ...

Another common strategy to solve the free trial dilemma is to "ask for the credit card upfront", meaning that users have to put in their credit card information when they sign up but they won't be charged after their trial expired. While asking for credit card information is a good way to filter out users who might never convert into paid customers it comes with the sames problems we just discussed.

Offering an "always free" plan or asking for the credit card upfront still doesn't solve the issue of low user engagement.

How to solve the user engagement debacle

Now that we know why free trials and free plans are a tough sell it's time to tackle the underlying issue: Low user engagement.

Basic human psychology tells us that human beings value items more if they've spent money to acquire them. Think about the last time you got something for free vs. the time you spent money on a similar item. Chances are that you've used and valued the item you paid money for more.

This discovery can be used to inform the way how you can design your trial version to eventually convert more users into paying customers.

Rather than offering a free trial which expires in 30 days offer a paid version of that exact same trial.

Yes, you read that right. Turn your free trial into a paid trial.

The benefits of a paid trial

Offering a paid trial comes with a couple of major advantages:

  1. Only users who are seriously considering your product will sign up for the paid trial
  2. It's more likely that your users will find the time to test your product because they paid for it
  3. Your users value your product more compared to your competitors who offer a free plan / free trial
  4. Your users are more committed to get the most value out of your product during the trial
  5. Another huge point of friction is already removed from the conversion process (asking to put in the credit card information and subscribe to a paid plan)

In fact, I learned about the power a paid plan can have from a personal experience. Given my growing interest in SEM, SEO and marketing in general I did some research to figure out what tools the market has to offer in that space.

In particular I was looking for a tool which would help me conducting Keyword Research, Backlink analysis and SEO monitoring. What I stumbled upon was the well-known tool Ahrefs.

However what struck me was that compared to their competitors their pricing structure was different. There was no "Free trial". I had to pay 7 USD to get access to the tool for 7 days. After some hesitation I decided to give it a shot and try it for the next 7 days. In fact, I spent a significant amount of time upfront, learning and researching everything I could about their toolings to figure out if their paid trial would be really worth it.

Needless to say that I used Ahrefs every single day during that week. The felt "pressure" to get the most out of the 7 days in combination with their excellent, educational E-Mail sequence helped me to explore all the values their tool has to offer. I'm absolutely certain that their conversion rates from paid trial to paying customer aren't too shabby.

Ahrefs 7-day trial for $7

Your challenge

Do you have a free plan, free trial or are thinking about introducing such a plan in the near future?

I'd challenge you to take a step back and think about offering a paid trial instead. Your paid trial shouldn't be too expensive but it should be enough that your users are incentivized to explore your product in more depth. Combine your paid trial with a helpful, educational E-Mail onboarding sequence and check-in with your users every now and then to understand what their problems are and to help them succeed.

I'm certain that this will help you tackle any conversion-related problems you might be facing!

Conclusion

Converting users you've attracted via a free trial or a free plan to become paying customers is hard. There are a couple of issues one has to be aware of. It's tough to get the math right and take the profits you made from your paid plans to offset the costs you'll introduce by offering a free plan / free trial. While it's highly likely that you'll get new users using your product you'll also experience an increase in customer support requests and an almost guaranteed low conversion rate.

One of the underlying core problem with all this is a lack of user engagement. Paid products are valued more than free ones.

You can use this fact and offer a paid trial which incentivizes your users to take action and explore the values your product has to offer. Having a more engaged user base helps you tackle the conversion-related problems you might be facing.

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