Why Offering a Free Trial Might Be Dangerous For Your SaaS Product (And How to Figure It Out)
For some reason, people tend to be equating SaaS companies with free trials.
I find this pretty bad indeed.
It’s true that many software companies see outstanding results with the free trial business model, but it doesn’t imply that everyone should use it. That’s just silly. Every single business is different, and the same strategy never fits all.
Force fitting a free trial system in your business can be really dangerous.
In this post, I’ll cover three of the most common scenarios where a SaaS company should NOT offer a free trial. Take a look through them and see if any describes you.
Scenario #1: The Product Doesn’t Deliver Results in a Reasonable Period of Time
“Do not offer a free trial when your customer can’t get a complete picture of how your product benefits them during a reasonable free trial period.”
– Wayne Mulligan, Co-founder of Crowdability
I couldn’t agree more with Wayne.
Let me explain:
The only purpose of offering a free trial is to remove the risk barrier, right?
Think about it. Companies offer free trials to show their prospective customers the value they’ll get if they decide to buy the product – they just want to alleviate all doubts and help their users make an informed decision. That’s it.
If your product doesn’t show the value within a reasonable time frame, a free trial simply makes no sense.
For example, if the user needs to gather accurate data to measure the value of your software, and he or she can’t get such data within the trial period, then that trial is worthless.
Also, it could be that your customer needs to contribute sensitive data to your system to evaluate it properly. In this case, the free trial won’t be helpful either.
In both examples, the trial period is simply not enough.
Now you might be thinking: “Why not just extend that period?”
Fair question. For some companies, it might be a viable solution. But the truth is there’s no one-size-fits-all answer. It all depends on your current situation and many other factors – like your sales cycle and working capital.
To help you out, I’ve listed below three of the most comprehensive guides on the topic. I’m sure they’ll get you on the right path:
- The Best SaaS Free Trial Length
- How Long Should Your SaaS Free Trial Be? It Depends…
- What’s the optimal free trial duration?
Scenario #2: The Product is Too Complicated
NEVER assume that your prospective customer will even attempt learning how to use your product. If the process isn’t obvious or – at the very least – simple, they won’t see the value.
In simpler words, if your product is too complicated, a free trial will probably not work for you. Why? Two main reasons:
- Without training, enterprise-level software tends to intimidate users, making free trials generally ineffective.
- Complicated processes tend to cost more money. Unless you have deep pockets, getting people to use your product for free might not be viable.
And when I say, “complicated,” I mean your product lies into one of the following categories:
- Your product has a complex integrated process. For example, when you need the help of developers to integrate your product into your client’s website or when people require extensive training to use it.
- Your product involves upfront implementation work.
- Your product needs third party integration to demonstrate a complete flow.
Companies like Marketo and Infusionsoft understand this concept very well. Both companies offer practical solutions, but they understand that people won’t get the most out of their products if they don’t know how to use them properly. So rather than offering a free trial, they offer free demonstrations.
In fact, Infusionsoft goes beyond your “typical” demo. Instead, you can decide whether to explore the product’s key features on your own, reserve a spot for a live webinar and Q & A session, or even schedule a customized tour from a small business expert.
This kind of attention helps you get a clear feeling of the product’s quality and its value.
Anyways, the bottom line is this:
If your product is too complicated or requires extensive training to deliver its full value, try with free demos. This model might work better for you.
Scenario #3: The Free Trial is Giving Away All The Value
Be careful about measuring results by focusing on user acquisition. I mean, if those users don’t turn into paying customers, they’re worthless. Savvy companies always bear this in mind.
If you want to increase your bottom line through free trials, you need to integrate the process in your sales funnel first and measure results by sales, not users.
The key lies in this simple, yet neglected concept.
Marketing expert and evangelist Trish Bertuzzi has worked with many SaaS companies, and she makes a fascinating point in his article on Why Free Trials Don’t Always Make Sense:
“…For some applications, there’s very little value delivered beyond the free trial period. If it’s a solution that helps manage a task done once per year – for example, arranging the annual user group conference – why would the prospect actually pay for the solution once that task is done?
In this case, the SaaS company is essentially giving away the full value of its solution. A free trial can attract users, but not many paying customers.” – Trish Bertuzzi
Her recommendations include:
- Offer a “sandbox demo” – letting your prospective customers try your product in a controlled environment might increase the effectiveness of the demo.
- Create an explainer video – explainer videos are proven to work extremely well for SaaS companies and – sometimes – a clear video is enough to explain the benefit.
- Money-back guarantees – if the free trial model doesn’t fit your business, you can still offer a money-back guarantee to reduce the risk involved in the purchase.
- No-obligation contracts – if your customer doesn’t get what she or he expected from your product, that customer could end the relationship without any problem. This reduces risk and entices more people to buy.
Many startups tend to imitate what other successful companies are doing, but remember, what works for others might not necessarily work for you. If a free trial model isn’t profitable, better rely on different strategies.
Don’t Take My Word For It – Test It Instead
If your business lies within one of the three categories outlined above, a free trial model will probably make no sense for you, BUT it doesn’t mean you shouldn’t try it at all.
I mean, there’s no way to know for sure unless you test it. Every business is different, and your results may vary. So please, don’t follow my advice blindly. I’m not trying to stop you, but to “awaken” you – never do things just because “you’re supposed to.”
The fact you’re running a SaaS company doesn’t mean you should offer free trials nor copy what your competitors are doing. Better trust on your own testing.
It’s the only way to figure it out.
What do you think? Are you going to test it? What other tips do you have? Make sure to share your thoughts in the comments! Brutal or otherwise.
About the Author: Josue Valles is a freelance copywriter, professional blogger, and business writing coach. He’s on a lifelong mission to help businesses find their voice and to turn boring ideas into brilliant stories. If you’re interested in working with Josue, you can email him at firstname.lastname@example.org.