“So,” the product manager looked at Emily, “What do we do now?”
Emily is the marketing strategist of her company. She’s a pro, at distributing content, community management and executing compelling campaigns. But it wasn’t enough. The C level wants to hit the jackpot for their product, by getting a free trial of the product out in the market. With zero investment.
Needless to say, Emily has her work cut out for her.
We get it, Emily. Navigating through free trial models can be a little exhausting.
Following the launch of any product, almost all product managers like Emily always find themselves at their wit’s ends.
Arriving at a final decision for the free trial model is catch 22 – giving away too much functionality may prevent users from upgrading to the paid tier of service while giving away too little will prevent users from understanding how the product can deliver value through integration into their working practice.
When it comes to selecting the right free trial model for their product, Technology Service Providers need to choose between the devil and the blue sea.
Emily has to learn the ropes of intricate, complex chains of analytics to arrive at a decision that will churn out the maximum number of registrations for her. Let’s take a quick look at some Gartner Statistics.
- Currently 5% TSPs offer Free Trials. By 2020 it will become 20%
- On average, only 25% of SaaS trial users convert to subscribers, and many companies struggle with conversion rates, on a daily basis.
From the above numbers, one thing’s clear. Enterprise software providers are increasingly using free trials as a means to drive demand.
However, that’s only the tip of the iceberg. There are numerous risks attached to this technique that will significantly impact the result. Emily’s approach to evaluating, planning, and implementing a free trial plan may make or break the success rate of her product. There are corporate realm is stuffed with stories of free trial tragedies.
Many product heads are often attracted to the glamour of a free trial offer, but fail to understand that their complex, team-based products are not a good fit for the model. They don’t always evaluate against the various criteria for success to find the most suitable freemium model. Usually, all decisions regarding a free trial are driven by a single person. Brands need to realize that it requires an effective cross-functional team to be successful.
Think of this blog post as a text and image version of Charlie’s Angels to all Product managers like Emily.
We’re here to help her out. All that she needs to do, is to follow this Gartner approved, four-step process to get on the path to success.
Emily has to ask four important questions:
- Is your product fit for a free trial?
- Which model is best?
- What team will execute it?
- How do we optimize?
Question 1: Is Your Product Fit For A Free Trial?
Flash news. Not all products fit into a free trial model!
While all brands are obsessed with pushing their products out through free trial offers, most of them end up in nasty disaster failures, for numerous reasons. There are some important criteria to evaluate your product fit for a free trial model.
Simplicity: Is your product easy to use? Does it have a simple value proposition? Is the adaptation fluid, or does it require tedious change management for the client to onboard their employees? How many users does it require? If your product has a violent disruptive impact on current practices and needs more than three users to demonstrate full value – perhaps it’s not the best fit for a free trial model.
Time to Value: While this might seem pretty obvious, it’s one of the most common mistakes that brands easily overlook when they offer a free trial. You see, a free trial comes with an asterisk. Your product can be consumed for free, for a limited period of time. Keeping that in mind, if it does not have a quick time to value, then you’ll be suffocating the users by wasting their time in migrating data, getting around to acquiring the skills needed to use the product – all of which will eventually choke up the conversion to paid ratio.
Pricing: Your product pricing should be simple, and transparent. It’s important that the users are aware of the actual price of a product. If your pricing is not clear, then you need to have a value proposition that is compelling enough to make up for this. We’d still recommend to all TSPs considering a free trial model to clearly display your pricing plans on the website so it’s easy for your users to understand where they fit and what to expect immediate and as they grow.
A few other important attributes that help evaluate if your product is fit for a free trial are responsive support and natural path to paid. You must create a free trial that provides value to drive conversions to paid subscriptions or licenses. It’s also important that you can’t have users in critical need of support and your team is not there to solve the issues immediately.
Question 2: Which Model Is Best?
The path that your user takes from a free trial ideally has to turn into a paid conversion. There are two techniques currently used. You can either limit the capability of the free trial product or you can limit the amount of time it can be used.
Capability Limited: Also known as the “freemium” model, where the free version of the product is limited in some aspect of product capability, such as seats, storage, utilization or advanced features. The use of the product should naturally drive users to paid subscriptions.
A good example of a Capability Limited Free Trial would be Tableau.
Opt-In Time Limited: The free version of the product is offered for a limited period say, for 30 days. At the end of the time limit, the trial simply ends, and the product is no longer available to users. They’ll have to get in touch with the support team and upgrade to the
Atlassian is a brand that successfully executed an Opt-In Time Limited model of free trials.
Opt Out Time Limited: Finally, we have this bulletproof model where The free version of the product is offered for a limited period. Also, the user is required to provide a validated payment method in advance. At the end of the time limit, the free trial converts to a paid subscription automatically.
A good case study to learn about Opt out Time Limited is Moz.
Free trials are an excellent sales strategy. The inherent risks are minimal. They pave way for customer satisfaction. They reduce the need for aggressive selling. And all of this begins with selecting the right model for your
Question 3: What Team Will Execute It?
Although the risks attached to offering a free trial are bare minimal, understanding the intricacies of the roles and responsibilities of each team involved. Identifying accountability when it comes to executing free trials is very simple.
The accountability is cross-functional. A free trial offer for a product can successfully convert to paid and generate revenue if and only if there’s a cross-functional plan in motion. Marketers like Emily needs to compile a team that represents individual roles.
For example, the product team should be responsible for providing a free and premium product with an easy path to paid. They’ll have to carefully select the capabilities to limit in the free trial, and take great care in ensuring that the free and premium versions of the product do not diverge too much. The marketing department has to outline the entire purchase – from lead generation and education to building trust and communicating value.
The support team must ensure that customer support is buttery smooth. A brand cannot afford to have lagged in response to issues in the free trial product. The customer support has to be responsive, easy, and accessible.
The sales and operations team have important contributions too. They need to make sure that they have the right tools that enhance and improve the chances of adoption for the free trial. The finance team can help analyze the marginal costs required to implement the offer.
Question 4: How Do We Optimize?
This final step will continue throughout the life of your free trial. Emily will need to have measures set in place to validate the decisions you took. After you get something working, you want to continue to monitor your key metrics.
Begin with the number of free trials. Is it growing, shrinking or staying steady? How does it align with your assumptions when you selected your free trial model? How is the conversion rate doing? Are the renewal rates healthy? Monitor customer churn. And, while you are executing all this, are you sticking to the cost quoted at the beginning?
With these four questions, Emily should be able to build and market a successful free trial for her brand’s product.
Gaining competitive advantage in a cutthroat market scenario is very important. Technology product marketers are ravenously hungry for ways to optimize the buying cycle. There is a tedious demand for new tactics.
Free Trials are certainly one of the jackpot answers if implemented carefully, as guided above. With free trials, listening to your customers and focusing on the customer experience will be much more efficient leading to greater success.
After all, Customer is King.