There are many benefits to having a Free Trial VS Paid Trial. With a free trial, your users get a test ride of your product with a low barrier to entry. “No credit card required.”
They also have a sense of urgency to explore all of your features in the number of days you give them. Whether you decide between 7 or 14 depends on how long you think it takes for your users to hit their ‘Aha! Moment!’.
You are making your product as accessible as possible and can acquire a large userbase very quickly.
This works until word spreads like wildfire and you have more people in your free trial than paying customers. Then the strain on your customer support and servers begins to eat away at your ARR.
Switching to a paid trial maintained their revenue growth and changed their brand positioning for the better.
Should your company take advantage of a paid trial model?
This article will discuss the benefits of switching to a paid trial and go over when it applies to certain business cases. We will go over each offering’s pros and cons and dive deep into the cases of Ahrefs and Surfer. In the end, you will find tips on how to move from Free Trial to Paid Trial and the onboarding tactics you need to convert trial users.
Table of Contents
- What are the benefits of a free trial vs. a paid trial in SaaS?
- Examples of successful paid trial companies
- Tips for moving from free to a paid trial
- How to Create a Great Product Experience for Paid Trial Users
- Wrapping things up
- The main benefits of a free trial over 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 new users stretched their customer 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, 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.
What are the benefits of a free trial vs a paid trial in SaaS?
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 during the trial period. 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
We are all guilty of it. Signing up for a free trial or freemium service without any intention of buying. Most of us just wanted to watch the season finale of Breaking Bad, but in SaaS, people want premium service for as little as possible.
Offering a free trial 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.
Let’s see how implementing a paid trial can eliminate this phenomenon.
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. 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?
Next, we will go over two companies that found success by implementing a paid trial model for their products.
Examples of successful paid trial companies
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.
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 for 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 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 providing great experiences to paying customers
- Ahref’s additional costs on services were eliminated, and ARR revenue growth stayed the same
Why Did SEO Surf Switch to a 7-day trial for $1
SEO Surf 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 on 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 very rapidly thanks to a free-trial that didn’t require you to enter 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, last year Surf implemented their $1 for a 7-day trial, and the rest was history.
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 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 user behaviors between those 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-than 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
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 at 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 with a blank screen 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 for 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.
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 un-intimidating 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.
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 by 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.
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.
We do the same with our own product adoption school. It is filled with all the product growth insights you need to keep testing which experiences resonate with your userbase the most.
Wrapping things up: free trial vs. paid trials
The main thing to remember for free trial vs paid trial is that it is very rare for companies to launch products with a paid trial.
There is too much inherent risk to charge for a SaaS product when not a living soul besides your team and your mom knows what it is.
Free trials or even freemium offerings are business models to test if there is a product-market fit and prove that people will purchase a subscription. They work among numerous other factors to spread the word very quickly about your product, so people actually sign up and try it out.
Paid trials work best in the Surfer and Ahrefs case studies mentioned above. You are already profitable, have a free user abuse problem, and are ready to try something new to reach that next growth stage.
When should you have paid trial vs 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
When should you have a free trial vs 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 have 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.