Approx. reading : about 5 min
SaaS companies often use free trials as a marketing tool to attract new customers. This method allows them to offer prospective customers the opportunity to try out the features of their product before actually buying it. However, it is important to ask yourself whether free trials are really profitable for businesses.
This article will explore the advantages and disadvantages of this practice in the SaaS industry, and the strategies that companies can use to make the most of it and minimize risks.
Free trials are an effective way to get new customers. They allow potential customers to try out the product before buying it, which could give them an idea of the tool’s value. Free trials can also help customers understand how the product works and to determine if it is easy to use.
In addition, one of the main advantages of free trials is that it allows SaaS companies to build trust with potential customers.
When the potential customer tries out a product and realizes that it meets his needs, he will be more prone to buy it and to keep using it in the future. This trust-based relationship can also help retain existing customers, as they have already had a positive experience with the product.
Free trials can also be a way to generate references for SaaS companies. If a prospect customer tries out a product and is satisfied with it, he can talk about it to his colleagues and to people around him, which can lead to new customers trying out the product.
Free trials offer several advantages to SaaS companies, to accelerate the acquisition of new customers. Here are some of the main advantages :
One of the main obstacles of acquiring new customers is the cost. Potential customers may be hesitant to spend money on a product that they have never used before and that they are not sure that they need. In this context, free trials provide a solution for SaaS companies because they allow potential customers to try out a product before buying it.
Free trials can eliminate this entry level barrier of the cost by offering a risk free experience to prospect customers. This way, customers can try out the product without having to engage financially and be able to evaluate if the product really meets their needs or not. That way they can be sure that they will get value for their money if they decide to continue after the trial period.
Prospective customers often have a hard time understanding the advantages provided by a program, especially if they have never used a similar product before or if they haven’t fully understood its utility until now.
Free trials provide customers with a hands-on experience of the product, which allows them to better understand its features and advantages. Customers can therefore get a more accurate idea of the value of the product and of its functionalities.
Free trials have a limited duration which consequently creates a sense of urgency in prospective customers. This time limitation urges customers to get the most out of the product during the trial period to fully take advantage of its features before the trial period is over.
The sense of urgency created by this trial period of the SaaS program can motivate customers to subscribe to the program after said period is over, because they do not want to lose what they have already done with the program. This can also encourage them to explore all the features of the product to determine if it really meets their needs.
Free trials also provide SaaS companies with the opportunity of getting users feedback. Customers can give their feedback about the product, allowing providers to understand the strengths and the weaknesses of the program. This feedback can help companies improve their product to meet the needs of their customers better by adjusting their sales strategy and their features.
This also boosts the brand’s image, the more positive feedback you get thanks to a high quality trial version, the more the product that you offer will make itself a place among the competition.
In order to maximize the efficiency of the trial period, it is therefore crucial to ensure that it is immersive and that it provides customers with a complete experience of the product. This will allow them to fully understand the advantages and the features of the product to determine if it meets their needs or not.
In addition, it is important to provide prospective customers with all the necessary information to get the maximum out of the trial period. This can include a user guide, video tutorials and online resources to help them explore all the functionalities of the product.
Dotsha is a SaaS management and monetization platform that lets you quickly launch free trial offers and measure their success with minimal effort and technical development.
Contact us for a demo of the platform.
Even if free trials offer many advantages to SaaS companies, they also present many disadvantages.
Here are the disadvantages that you should take into account if your choose to offer free trials in your SaaS company :
One of the main disadvantages of free trials for SaaS companies is that customers can choose to not commit any further after the free trial period. Since they haven’t invested any money in the product or service, they may not feel obliged to use it or to take it seriously. This can make it challenging to determine the real value of the product or service for the customers. It is important to provide consistent support and guidance throughout the free trial to make sure that customers find genuine value in it and are motivated to upgrade to the paid version.
Free trials may attract a large number of potential users, but that doesn’t guarantee that all the users are qualified to use the product or service. SaaS companies can encounter users who are not part of the target market or who are not willing to pay for the product or service after the free trial period. This could result in loss of time and money for the company.
Even if free trials are often considered as an inexpensive marketing strategy, it can actually be quite expensive for Saas companies. The cost of marketing to attract new customers can be very high. In fact, to attract prospect customers, companies must invest in advertising campaigns, promotions and special offers, which can quickly become very expensive.
In addition, if many of these customers do not upgrade into paying customers, the free trials can have a negative impact on the profitability of the company. This can happen if the customers use the free trial simply to try out the product without having the intention of buying it or if they are not satisfied with the features offered by it. Businesses should therefore be aware of this potential cost and put in place strategies to maximize the rate of conversation of their free trials into paying customers.
By offering free trials, SaaS companies provide prospective customers the possibility of easily comparing their product with the different products that are available on the market. This could mean that if your product does not meet their needs, the customers can easily turn towards an option that is less expensive and more effective. To avoid this, it is very important to ensure that your product is actually useful for your customer, by offering a high quality product and user interface. It may be a good idea to add new features and improve the interface from time to time, to make it easier and more user friendly than that of the competition.
In addition, it is also important to offer a personalized follow up during the free trial period to make sure that prospective customers get the most out of your product and that they are encouraged to upgrade to buy it once the free trial period is over. At the end, by offering a high quality free trial, you can stand up from the competition and convince prospective customers to choose your product over that of the competition.
Even if free trials have disadvantages, they can also be an excellent way for SaaS companies to attract new customers and to grow their businesses.
Here are some strategies that SaaS companies can use to minimize the disadvantages of free trials :
One of the ways to reduce the costs associated with free trials is to offer free trial periods that are shorter. Instead of offering a 30 days free trial period, SaaS companies can offer a free trial period of 14 days or even less. This will allow you to reduce costs while giving prospective customers enough time to try out the product and to encourage them to continue discovering more of its functionalities.
In order to avoid users that are not qualified, SaaS companies can target qualified customers. This can be done by creating detailed subscription forms that allow the company to pre-qualify users and their needs. Companies can also offer free trials only to those customers who meet certain specific criteria, such as company size, main activity, location.
In order to facilitate feedback submission, companies should set up a space that allows users to share their views and their experience feedback. In addition to providing feedback, this will also help identify users who are more committed and more interested in the product, in order to better segment trial customers and optimize marketing efforts.
Dotsha is a monetization and management platform that enables you to quickly deploy free trial offers and to effectively manage them with minimum effort and technical development.
With Dotsha, you will be able to use our paywalls to make online registration to your free trials easier. Our platform allows you to easily track trial customers, manage expiration dates and use our workflow tools to communicate proactively with them in order to encourage them to convert their trial into a paid subscription.
This process of converting trials into paid subscriptions is further facilitated through targeted offers that you can personalize using our pre-configured paywalls.
Do not hesitate any longer and take advantage of your free sandbox or contact our sales teams.
Approx. reading : about 8 min
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