One of the oldest criteria that people take into consideration when making their buying decision is to be able to try a product out and compare it with another one.
In line with this desire, companies have tried to offer free trials that make customers find the value that they are looking for in a product and convert into paying customers for the long-term.
It is a simple yet powerful desire. When people don’t even buy shoes without even trying them, it is highly likely that they will buy a SaaS product that they can try in advance rather than one that they cannot.
So, if I am to give you a crucial tip before even starting to talk about free trials, you should give the utmost importance to your free trials and provide a short time-to-value in your free trial offers to help your users realize that they can find the value they are looking for in your product.
What is a Free Trial for SaaS?
A free trial is a type of “product introduction” that is used by many companies and services. Free trials give the first impression to users so that they can test your products and services to decide whether they will stay with your company. Offering free trials for your SaaS product is one of the most significant determinants when it comes to users’ buying decisions.
As I said, one of the oldest and most common desires that humans have is to be able to try a product out and compare it with another one when buying things. In this regard, when you provide free trials to your potential customers, you will increase the chance of converting those to long-term paying customers.
What exactly is the Free Trial Conversion Rate?
Free Trial conversion rate refers to the percentage of users who start using your product with a free trial and then turn into long-term paying customers.
Today most SaaS companies rely on the conversion of users into paying, long-term customers after a free trial. Increasing the free trial conversion rate, along with reducing churn, improving retention, product adoption, and feature adoption is extremely crucial for overall success. To improve free trial conversion rates, you should take specific measures.
How do you calculate Free Trial Conversion Rate
To calculate the free trial conversion rate, in other words, the percentage of trial users that became paid customers after their free trial, you can use this formula:
Free Trial conversion rate = Free trials that are converted in a specific period of time / the number of trial users in that specific period of time * 100.
Let’s say your product has 250 of your free trial users convert from the overall number of 500 free trial users. In this case, your trial conversion rate would be:
250/500 * 100= 50%
How long should your free trial last?
To improve free trial conversion rates, you should optimize your free trial process in terms of time. The length of the free trial period depends on the company and the product. Many companies prefer to choose one among 30 days, 15 days, or 7 days of trial. You need to find out which one is ideal for your case.
You should set a period that is long enough for your customers to discover the features of your product but short enough to make them feel urgent to go beyond the trial. If you see the need for this, you can try to offer different trial periods to various groups.
Why is the Trial Conversion Rate important for SaaS?
The free trial conversion rate shows you both how successful your product is in instantly providing value to your users and how good you are at helping them find the value of your product.
You may think that your product is great at solving the problems of users but you may still fail to convert users into paying customers. That is to say, no matter how good your product is, success comes with helping users learn how they can reach the value of your product and find a solution to their problems.
In this regard, a high free trial conversion rate suggests that you are good at conveying the benefits of your product to users, whereas, a low free trial conversion rate suggests that either you have to work on the quality of your product or the guidance in helping users making use of that quality.
With that being said, let’s start with one of the most crucial strategies that can help you increase the free trial conversion rate, namely, providing an excellent user onboarding experience.
How to Increase the Free Trial Conversion Rate
1- Offer an effective onboarding process for engagement
After the signup period, many users are left alone to figure what’s going on with your product. That’s exactly the point where you should help them feel like they are a part of the community from the first moment.
You need to establish a bond between your customers and your brand or your product as quickly as possible. Helping your users get to their “Aha!” moments before they lose attention, is highly crucial. If you have an effective onboarding process that provides this for your users, you can gain many customers and fans.
You can design guides and product tours to introduce the value proposition of your product or service. You should emphasize the specific features of your product according to the unique cases of the customers. And of course, you should be ready for your customers if they need help with something.
If you want a real-life example of how an excellent onboarding experience can increase conversion rates, you can read about CitizenShipper’s experience in increasing their activation rates by 25% after providing a satisfying onboarding process to their customer with UserGuding (easy-to-implement and affordable user onboarding software).
Let’s talk about some statistics to further understand why user onboarding is crucial for increasing free trial conversion rate and furthermore increasing customer retention rates:
55% of users have stated that since they didn’t know how they can use a product, they have returned a product. Therefore, offering a free trial is not enough by itself to convert users into long-term paying customers. In addition to a free trial option, you should also provide an onboarding experience that will guide users in finding the value of your product in the best way.
2- Provide content that adds value and makes life easier
What you offer and how you offer can change everything in the eyes of your customers. The quality of your product is the main reason why your customers chose to try it in the beginning. Along with an effective onboarding process, the easiest way to improve the free trial conversion rate is by showing customers that you value them and produce content that solves their problems.
In a data-driven market, companies know their audiences well and positively affect their buying decisions. You should prove that your product can solve your customer’s problems. For this, the media can help you, and you can share videos and stories that emphasize the interesting functions of your product.
It is essential to show that you provide what customers are missing.
Content marketers often feel that they may be too salesy if they talk about their own product in their content. However, this shouldn’t be the case.
You should be able to showcase your product in your content so that the users understand how your product can solve a specific problem that they are looking for.
3- Personalize the experience for higher free trial conversion rates
Personalizing your users’ experience is a powerful way to increase engagement. Personalizing does not mean just sending personalized standard e-mails to your customers. You should behave according to their specific needs.
You should be able to reach the data of your customers through various data collection programs to offer them the features they need. Having a strong and efficient sales team is also crucial to have meaningful conversations with your customers.
Segmenting your users and offering them personalized solutions alongside personalized messages will help you build a much stronger relationship with your customers, and therefore increase free trial conversion rates.
Here is an example of a personalized message with a personalized solution to customers from Clickup:
What is so good about this example is that it has a personalized message to the specific needs of customers who would use ClickUp.
Alongside calling their users their names and building a good relationship with their customers, ClickUp does something great in personalizing their experience.
Here is what they do:
Since ClickUp is a work management tool, they know that the time and energy of their users are important. In line with this knowledge, they provide their users with time and progress indicators so that they are able to manage their schedules better during the onboarding process.
4- Focus on useful SaaS Free Trial Metrics that give a realistic insight
Track the patterns of your product or service because reliable data shows you the way to success. You can analyze various metrics to understand the patterns.
- You should start by focusing on the north star metric, which is the leading metric that shows the core value of your product. Your north star metric reflects the relationship between the problems that your customers have and how your product team is trying to solve them and how the revenue of your business aims to generate by doing so.
- You should check your qualified visitors metric to see if you succeed in converting the users into the active visitors of your pages.
- Consider the onboard trials, which allows you to find out the correlation between the users who have signed up and those who have set your product up, and engaged trials, which is a great way to see the users who have signed up, set up, and visited your page back to take action.
You can also compare them to see the patterns behind the free trial conversion rate. Try to see many metrics so that each of them can help you understand the trial process.
- Free to Paid MRR shows you the monthly recurring revenue that you generate from subscriptions that are moved from free plans to paid plans. This metric also includes the revenue you generate when subscriptions of your paid plans move from a free period to a paid period.
- Free to paid evolution cohort is another metric that you need to track. It shows you the number of customers that move from free to paid in a span of 12 months
5- Get feedback for building a strong relationship
As we mentioned above, tracking the patterns is at the heart of your management process. You should find the point where your users decide to continue. At this point, the ones who leave are as important as the ones who continue. You can get some valuable insights if you try to learn the reason why you are losing some of your users.
There are various methods of getting feedback from your signups, including surveys, personalized e-mails, and incentives like gift cards along with an answer. Do not hesitate to get in contact with your users through one of these ways to understand what they like or where they get stuck.
By considering these steps, you can specify the features of your free-trial process, and you can have an insight into how you boost your free trial conversion rates to gain actual customers. As a result of an effective trial process, you and your customers will be content with each other.
One of the best ways to get feedback from free trial users is to send them a welcome email and ask them a few questions about how you can help them.
The crucial point here is that the email should be brief and clearly put forward that you ask for feedback because you want to provide a better experience for the customers.
Here is a good example:
You can see that it clearly puts forward the goal of the email. Reading this email, the free trial users will feel much better at home and that they are being taken care of.
This way you can build a much better relationship with your users and increase your free trial conversion rates.
Conclusion
Like I said at the beginning of the article, free trials will give your potential customers the opportunity to try out your product and see if they can find the solution that they are looking for for their problems.
Free trials are there to satisfy one of the oldest desires that people have and if you are able to satisfy that desire with a short time-to-value, good communication, and personalization, you increase the chance of converting those potential customers into long-term paying customers.
Don’t forget first impression matters and you only have one chance for first impressions!
Frequently Asked Questions
How do I increase my conversion rate SaaS?
Start with providing a free trial since people want to try what they are buying and compare with another product that is out there. Provide a short time-to-value. Have good communication with your users, inform them about updates. And most importantly, give them a satisfying onboarding experience. A lot of people return a product because they don’t know how to use it.
Why is my free trial conversion rate low?
There can be a lot of reasons for this but the most obvious reason is that you may be failing to help them find the value that they are looking for in your free trial. In this regard, you should make it easier for users to find the value that they are looking for in your product. You shouldn’t think that you shouldn’t give too much to users during a free trial. Yes, there should be differences between your free trial and paid options but this does not mean that you don’t give the value that users should see in your free trial.
