Offering a free trial is one of the effective product-led growth strategies that can attract users with a low entry barrier and a sense of urgency to explore your product.

However, as seen with companies like Ahrefs and Surfer, having more free trial users than paying customers can strain customer support and servers.

This article delves into the benefits of a paid trial model, explores when it’s suitable, and provides insights from cases like Ahrefs and Surfer. It also offers tips on transitioning from a free trial to a paid one and effective onboarding tactics for converting trial users.

Summary of free trial vs paid trial

• The main benefits of a free trial over a paid trial are the low barrier to entry, the inherent virality of free offerings, and letting new users discover the full value of your product with a sense of urgency.
• The main benefits of a paid trial are eliminating low-quality leads and people with no intention of buying. They also attract more quality customers who already understand the value of your product.
• Ahrefs and Surfer found the main con of a free trial was attracting a majority of users who had no interest in becoming customers. These free customers stretched their support and servers too thin. So they implemented a paid trial and maintained revenue growth while freeing up support.
• You can A/B test if a paid trial would be right for you on a new user segment of educated leads. People who sign up through a blog post or a feature page.
• The three steps to providing a great product experience for paid trial users are: make the time to value as short as possible, create engaging product discovery experiences, and don’t ever stop being a resource to your customers.
• A free trial vs paid trial is a better growth tool and should be used when testing the product-market fit, for products dependent on outside capital, and with a small userbase.
• Switching to a paid trial is best once a company reaches the mid-market level and needs to focus more on retention than acquiring new users.
• Want to optimize your conversion rate and determine your ideal trial period? Book a Userpilot demo today!

What are the pros and cons of a free trial in SaaS?

Below we’ll go into the advantages and disadvantages of free trials in SaaS, understanding how they can propel growth but also pose challenges when not managed strategically.

Free trial pros

The magic of a free trial is in the name: free! Well, actually, it’s not entirely free. You still have to give your credit card number or at least an email to start using the product in most free trials.

But the customer doesn’t have to commit to anything. They can cancel at any time before the free trial period ends. Here are the options available when deciding which free trial to use:

• Free 7-14 Day Trial with a credit card number and email
• Free 7-Day Trial without a credit card and only email
• Free Trial with a certain usage limit W/O credit card number
• Free Trial that automatically upgrades to premium plans

These methods are great to widen your net for potential paying customers in the long run. Once users get inside your product, they see the value upfront (well, of course, depending on your onboarding).

All the features are there for them to play around with, and if they hit your activation points there is around a 14% chance they will upgrade to a premium plan.

You are building trust with your new users, and your product can grow very quickly as a result. However, free trials can also limit growth once you hit a certain point in your company trajectory. Let’s see how below.

Free trial cons

Offering a free trial and free tier is great at attracting users, but your business will become dependent on converting them into customers. Depending on your operational costs and conversion rate, you may lose money as you have to service all these free users.

If you have a simple product for a common problem, this makes sense. If you have a complex product for a specific job function, you could be losing potential customers because they think your solution is just another free option they can exploit.

So you probably need to implement a paid trial if you want to eliminate this phenomenon.

When should you have a free trial vs a paid trial?

• When your primary driver of acquisition is paid traffic, you still have to educate new users about your value.
• When you are still growing and haven’t acquired a substantial user base for your product yet.
• When you are still having trouble converting free trial users into customers, the median conversion rate for free trial products is roughly 14%.
• When you want to define your brand as a viral “low-cost” solution in a red ocean market.
• Still considered a small business and has to rely on promotions and discounts to attract new users.
• Heavily dependent on venture capital and outside investment. Has to meet growth expectations.

Want to convert more free trial users? Get a free product-growth consultation today by booking a demo.

What are the pros and cons of a paid trial in SaaS?

Before deciding if the paid trial is right for you, it’s important that you know all the disadvantages and advantages that come with it.

So below we will explore the pros and cons of a paid trial before examining why this model has proven successful for certain companies.

Paid trial pros

The immediate commitment of money means that you are more likely to attract ‘qualified’ leads than those looking for ‘freebies.’ These are people who already know what they’re after, and if your product works, they intend to stick around.

You may be decreasing your accessibility, but you build a base of users who are much more likely to become product advocates and willing to help you continue to improve your product experience.

If you have high operating costs or need a burst of revenue, you are at least making some money on the users you acquire with a paid trial. This will decrease your CAC and will allow you to continue to increase your revenue sustainably. How much you charge depends on your product and financials. SEO Surfer charges $1 for 7 days.

It seems the best option is to create a price that seems insignificant but still requires commitment.

Paid trial cons

The biggest downside to offering paid trials is simple – most people don’t want to pay for something – no matter how cheap – they’re not sure they’ll keep it. That is why the main con of a paid trial is you will always generate a lower number of trials.

Too much commitment early on can be very intimidating for most customers and discourages them from taking the trial, dismissing your product, however perfect it may be. It’s like being told ‘I love you on the first date – too much, too soon.

So, with a paid trial, you have a lower influx of users but a higher conversion rate to long-time customers. Product positioning plays an important role as well. Are you a high-level solution that people should pay to test out? Or a low-cost option trying to acquire market share and grow quickly?

When should you have paid trial vs a free trial?

• When you have already found product-market fit, gained some traction, and users land on your homepage already knowing the value you offer.
• When your user base has a higher percentage of free users than paying customers, think 2:1 or 1.5:1.
• When your customer support team spends more time attending to your free users’ needs than actual customers.
• When a significant portion of your budget goes to server upkeep, you aren’t converting users fast enough to meet the rising costs.
• When you want to define your brand as a “premium” solution.
• A Mid 7-8 figure business with high YoY growth
• A boot-strapped business that is in control of its own business trajectory

Examples of successful paid trial companies

The strategy behind trials can make or break a company’s growth. This is exemplified by industry leaders like Ahrefs and SEO Surfer, who, after experiencing both free and paid trials, found success with the latter.

Why does Ahrefs charge $7 for a seven-day trial?

In 2011 Ahrefs was just a website with a free backlinks explorer search option. It was a small fish in a “red ocean market”-meaning there was an opportunity but blood in the water with two big sharks Moz and Majestic.

Source: Ahrefs.com

However, there was nothing stopping people from visiting their website and using their tool. Over the next 4 years, they grew very rapidly (They also created amazing content to bring more people in).

In those four years, they developed a much more complete product. Soon they followed most SaaS companies’ trends by offering a 14-day free trial. Users got full access to only entering their credit card numbers.

Despite the positives of having the free trial, about 8 months into its launch, they noticed massive abuse.

Of their entire user base, they had 8,000 paying customers and 16,000 free users. The free users kept creating accounts under new emails, flooding their database and bloating what their payments processor had to handle. However, the free trial abuse proved to be a critical stage in their growth because it turned their product viral.

More people than ever before heard about Ahrefs through their free trial loophole, and the company still posted revenue growth and converted customers during this period. Although, all good things come to an end because this growth wasn’t sustainable.

To alleviate the pressure on their servers and support team, they decided to switch their 14-day trial to 7 and charge $1 per day.

The results

• The number of trials dropped and the freeloaders left
• The conversion rate for trial users to customers increased. Their trial users were more educated about the company’s value because they had to commit $7
• A more evenly distributed user base. More time for customer support to provide great experiences to paying customers
• Ahref’s additional costs on services were eliminated, and ARR revenue growth stayed the same

Why did Surfer SEO switch to a 7-day trial for $1?

Surfer SEO started as an in-house tool to help an SEO agency that the founder, Michał Suski, worked for.

They developed a methodology for competitor analysis, and the product was built to speed up the process of gathering and analyzing data. After seeing the success internally, they decided to make the product public and scale.

The main value proposition of Surfer was to save SEO specialists time in gathering data for which keywords to rank for and how to beat the competition. They also built a huge knowledge base from running so many queries with their product. They discovered a few hundred ranking factors that almost guaranteed a page to rank above competitors.

The product was a smash hit compared to their main competitor Cora who was less user-friendly. They grew rapidly thanks to a free trial that didn’t require entering any credit card information.

Problems began to occur when the time came for all these new free users to pay up. Since they joined without any intention of buying, they dragged their feet once they were asked to enter any credit card information. They requested changes and service from customer support that spread the team incredibly thin.

So in 2020, Surfer SEO implemented their $1 for a 7-day trial, and the rest was history.

The results

We asked Michał ourselves what he thought were the biggest impacts.

In the next section, we will go over the exact use cases to implement a paid trial offering for your product.

Tips for switching from a free trial to a paid trial

By now, you should be able to decide if your company is ready to test a paid trial offering.

So how do you do it?

Well, unless you have insurmountable evidence that a paid trial model will help your business, the best option is to run an A/B test.

One way to do this is to have all the users who sign up for your product organically-meaning from a CTA in a blog post or a product feature page – pay for their trial. These are people who at least have a basic understanding of the value of your product.

Set the price low. $1-$7 like at Ahrefs or Surf SEO seems like a good price point with a low barrier to entry.

You can then track and compare activation data between new users in your current free trial and those who sign up for the paid trial.

If the users in your paid trial reach their activation points faster, engage with your core features, and continue past the trial period more than the free users there is your proof.

Of course, as mentioned before, there will be fewer trial signups from that segment, but they will be much warmer PQLs (Product Qualified Leads) than those users in your free trial segment.

Let’s now look at the product experiences of paid trials and why they are so important to retain the customers who signed up.

How to create a great product experience for paid trial users?

We have gone to great lengths to discuss how to convert free trial and freemium users into paying customers.

Now, let’s take a look at the product experiences critical to showing your product’s value to paid trial users and reassuring them they made the right choice.

Step 1: Make the time to value as short as possible

First, let’s start with Ahrefs. Here is how they greet their new paid trial users.

They have done a pretty good job of eliminating the empty state. Users immediately have access to all of their resources to learn more about the features of their product. They even have a quick video explainer for the users who want to jump right in.

Most importantly, they have a call to action to bring the user to their activation point with “Add your first project”. This is syncing your website with the platform.

They even let the user know how much time they have left on the paid trial.

Also, check out this slideout that comes up when you start exploring the dashboard:

The point is, the user knows exactly what they need to do to start solving their problem. Many companies will leave users blank screens once they sign up and wonder why they never log in again.

To grow your product like Ahrefs, you need to make the time to value as short as possible. This way, there are no regrets about signing up for the paid trial, and users don’t feel overwhelmed by a bunch of features they don’t know how to use.

Of course, Ahrefs has a dedicated team of engineers to create all these experiences. To test the perfect intro for your product without sacrificing time off your roadmap, you can use a product growth tool like Userpilot.

Try Userpilot and Build Engaging Experiences without Coding!

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Step 2: Create engaging product discovery experiences

Now that you have left an amazing first impression on your users, you want the exploration of your product to be engaging as well.

Ahrefs includes a checklist while users connect their accounts. This way, if a user is interrupted, they know exactly where they left off. If they are connecting only for one feature, they know what they have to do to get there.

Since Ahrefs is such a complex product, new users will get constant reminders that there are answers to their questions. It’s almost like they are reading your mind. Every feature includes these tooltips, and it creates a fun learning experience while solving a crucial business need.

Surfer goes a step further by including a welcome modal any time a new user navigates to a feature. This creates an engaging experience for any novice SEO professional and gives them the option to learn more or get started immediately.

If they get overwhelmed or require more information, they always have this slideout in the corner of their screen for reference.

Our favorite aspect of the Surfer onboarding is the dashboard. They include every single feature of the product with a purposely empty state. This motivates users to explore each feature and see how it solves the job they need to be done.

It is also a great way to track their progress through the trial and make sure they hit all their activation points.

You, too, can create a product adoption strategy similar to these with Userpilot. You have the option to create interactive tooltips or checklists to encourage your users to learn more about your product.

You can even create bespoke user experiences that appear based on their behavior or the pages that a user segment visits i.e. create a live demo offer to push conversion.

Step 3: Don’t ever stop being a resource to your customers

The last step to retaining paid trial users is continuously offering your support. Many products will offer one-off resources or a single onboarding email and then call it a day.

You need to create amazing product experiences that inspire users to stay. They shouldn’t have to go looking for the customer help desk or a walkthrough. They might as well sign up for a free trial somewhere else then.

One way that Surfer does this is with a welcome email from their customer success team.

They let the user know that a real human being is waiting to help them should any issues arise. This creates trust and a more personalized user experience.

Ahrefs, among the treasure trove of SEO insights on their blog, offers their own academy to all of their customers. Users can become product experts and eventually product advocates through their courses.

We do the same with our product adoption school. It is filled with all the product growth insights you need to keep testing which experiences resonate with your user base the most.

Or, you can install a knowledge base inside your product. The purpose of these nudges is so that your users don’t have to go anywhere else for their business needs. Everything they could want to know is just a click away.

Conclusion

Free trials and freemium models are common for testing product-market fit and spreading the word quickly. Paid trials, as seen with Surfer and Ahrefs, work best when a company is already profitable, faces issues like free user abuse, and is poised for strategic growth. Therefore, whether you should offer free trials or paid trials only boils down to your company’s growth stage and readiness for experimentation.

Want to track conversion rate and determine your ideal trial period? Book a Userpilot demo today!

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