We all love SaaS products like Spotify, Trello, MailChimp, etc. But how many of us use the paid version of them? Well, not many individuals use the paid version cause these brands monetize on the enterprise version of the app.
But, what if the brand offers a SaaS tool only for B2B professionals? A freemium model is not the go-to option for each SaaS company. Also, unlike these well-established brands, it is hard for most SaaS brands to get users to try their products and become paid customers.
Netflix India had the hardest time converting users into paid customers. Many other SaaS products, especially new SaaS companies face the same issue. Let us look deeper into the issue first.
Types of Free Trials
There could be a couple of reasons that your free trial users are not converting. Firstly, let us look into the types of free trials:
Freemium Model- It means offering a set of features for free forever and charging for certain premium features. Example: Trello
Opt-in Free Trial- It offers the user a free demo period of 14-30 days without any credit card information, in exchange for the email address. Example: Salesforce
Opt-out Free Trial- It is similar to an opt-in free trial with a limited period of the demo but demands credit card information. Example: Netflix
The difference in the model also impacts the free trial conversion rate. It is generally noticed that conversion is maximum for an opt-out free trial. However, it is hard to get more sign-ups for the same. Nonetheless, what are the reasons that users pull back after trying your product?
Why Free Users Do Not Convert Into Paid Customers?
High User Expectations
There could be a gap between the user expectation and your product offering. The user might be looking for some specific features which are not USP for your product.
The user might have a better alternative that solves the problem at a lower price or gives better performance. For instance, many companies prefer Slack over Microsoft Teams. Microsoft teams might be a cheaper alternative but Slack offers better integration and usability.
Bad Boarding Experience
Another reason that drives users away is an inefficient boarding experience. A smooth onboarding process means sending onboarding emails, tool setup & personalized demo, and providing an onboarding kit. Brands often miss multiple touchpoints to impact the users which affects the conversion rate.
The product does not solve the user's problem
If your product does not solve the user’s problem and acts as additional friction or workload, conversions will drastically decrease. However, there are times when the best products can not convert as they are unable to communicate and highlight their value or lose points in customer management.
Here are 12 strategies that would help you increase your free trial conversion rate.
12 Proven Ways to Boost the Free Trial Conversion Rate
Conversion is not just about bringing more features or improving your product. The best-in-class product could also perform variably low due to mistakes like poor onboarding process, too much friction, complexity in product set-up, or lack of incentive. Below are 12 tactics that can enhance your trial to paid conversion rate.
Easy to Use Product
Your product might not have all the advanced features but if it can solve the users' problems with ease, it will definitely get more paid users. Ensure that your product is easy to use and does not add up to the workload. It should have enough guidance to move around and use the product smoothly. Alternatively, there are many other ways to fill in the gap in case of a complex product.
Offer Personalized Demo
Sometimes the products are hard to understand and require assistance initially. In those cases, a personalized demo is a great way to highlight the use cases and make the user thorough with the product. Also, a dedicated team that helps onboarding with setup and a demo works exceptionally great to boost trial to paid conversion rate.
Create Resource Centre
Another way to tackle the issue of a complex product is by creating a resource library that the user can refer to as and when required. You can have a separate center on the website or within the product integrated into different places. Also, this is a great place to highlight case studies for your product and tap into any customer queries.
Some brands fail in communicating their USP and hence lose a big margin to their competitors. What stands you apart from 50 other products available in the market that might be cheaper or more expensive than you? Identify and communicate this through your content throughout platforms and sales pages. It can help you cross the bridge if you have various close competitors.
Provide Conditional Offers
Apart from conveying brand USP and features, providing an incentive works as a great way to offer premium features and get paid customers. Something like this offer by Grammarly.
It gives a 50% off which is only available till midnight. They help in attracting more paid users. Once the users opt-in for the paid version, it is generally noticed that they don’t unsubscribe from it.
Choose Opt-out Trials
Opt-out trials are a great way to increase your trial to paid conversion rate. Since it requires credit card details, it helps qualify users beforehand. It has the highest conversion rate of 30-60% for many brands. However, a SaaS brand that is new in the market shouldn’t opt for it as it wouldn’t get great results. It is great for brands with an existing brand foot in the market that wish to scale.
Leverage Email Sequences
Emails can play a major role in conversion if leveraged smartly. Firstly, setting an onboarding email sequence in place is really important. It smoothens the process of onboarding and keeps the users hooked to the product.
Secondly, using emails to send reminders about the end of the trial period is another way to use emails. Lastly, they are a great way to get customer feedback or voice any offers/features.
Ease the Upgradation Process
The process of moving from a free to paid version should not be a hassle for the user. It should include collecting credit card details + only necessary information. Also, It should not be complex for users to find a portal to upgrade to the paid version. The installation and upgradation should be effortless.
Provide Personal Support
Chatbots are a great way to handle customer grievances promptly. Chatbots or dedicated sales person could act as a team to solve queries for the users and create a better understanding of the product. Also, mark down the common queries that you get and eliminate/ simplify those elements to reduce friction.
Limit Number of Paid Features
As crucial as it is to show what the paid version of the tool can do, it is advisable to restrict the number of paid features. Only provide limited premium features depending upon the product usage and customer pain points.
Alternatively, offer premium features for a limited time or number of times. For instance, limit a particular feature, let us say integration with Google Suite for up to two times only.
After this, the trial may continue but those premium features are exhausted. This again boosts the free trial conversion rate. Also, try and limit the demo period to 14 days at maximum. It gives enough time for users to try the product and get clarity about it.
Optimize User Journey
A user journey is crucial for a business to understand how the user uses the product, where it lags, and what is the key to better performance. You should optimize this user journey by first analyzing it well with the help of heatmaps and then filling in gaps.
Start by holding a consistent narrative across platforms. Also, establish credibility in the niche with the right type of content and PR. Each user interaction should solve a goal for the user and add value to it. Aim to remove any unnecessary friction and ask for minimal details.
Use Heatmaps and Activity-based Triggers
Heatmaps are a crucial tool for SaaS brands to understand user activity. Not only do they help in understanding the user journey but also assist in optimizing the product for conversion.
You can use activity-based triggers that incentivize and ease product usage. HubSpot uses Activity-based Triggers efficiently to maximize conversion. Look at the email below:
It uses activity-based triggers, communicates value, gives an enticing offer, and highlights USP.
These strategies can be a great starting point to understanding the loopholes and fixing them up. But how much should a business aim for as a free trial conversion rate?
A standard benchmark for free trial conversion rate is 4% across all the types of free demos offered and industries. Apart from these more defined conversion rate benchmarks based on the model of the free trial are:
- Freemium- Below 10%
- Opt-in Free Trial- 5-25%
- Opt-out Free Trial- 30-50%
This shows that the opt-out model is great to convert users but is generally advisable for brands with goodwill that wish to scale further. The Freemium model offers the lowest conversion rate and hence is adopted by companies that make money by selling to enterprises.
If your product has lower rates, look into the loopholes and fix them with mentioned strategies or some other solution. However, there are cases in which companies outperform these standards, such as Slack with a 30% conversion rate.
What does “Free trial conversion rate” mean?
The free trial conversion rate means the percent of users that convert to paid customers after a free trial over a defined period.
How to calculate your “Free trial conversion rate”?
Paid customers after a free trial/ Free trial sign-ups x 100. For instance, if your tool gets 35,000 sign-ups in a month for a 14-day trial. Out of these 7,000 users convert into paid customers. Then, the free trial conversion rate is 20%.
What is a good conversion rate from free to paid?
15% to 20% is considered a good conversion rate.
How do I convert my free trials to paying customers?
Offer demo, highlight your USP, provide excellent customer support, and provide exciting offers.