SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Bad Advice on Free Trials from Marketers Who Should Know Better

Posted by Bob Warfield on February 18, 2016

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I just read a post on the KissMetrics Blog by Cody Lister entitled, “More Trial Users is Not the Answer For Your Startup’s Growth.”  It’s not a terrible post.  In fact, some aspects are pretty decent.  Lister basically wants startups to focus on better engagement and the onboarding experience and less on just running as many people as possible through the trial process.  He wants you to be sure you’ve got product market fit before you try to scale out with as many trials as possible.  I have no problem with the latter, BTW, but it is unrelated to the areas I do have a problem with.

Unfortunately, perhaps due to the act of trying to make the point as persuasively as possible, he strays into at least one area where I think his advice is dead wrong.  It’s way too Black and White, and whenever someone gives me a Black and White answer, I instinctively look for the exceptions to the rule.  Let’s put aside that in fact more free trials will help you to grow, it simply may not be the optimal thing for you to be focused on right now (or it may be, it all depends).

Instead, let’s drill down on the area that really got me thinking it was bad advice from a marketer who should know better.  Lister states:

Eliminate Or Reduce Free Trials

What if one day, your team just decided to shut down your free trial accounts that were past 14 days since their sign up date? Would you suddenly go out of business?

No, you’d save money from server costs and force people to make a decision.

It’s only when your free trials run out that you know whether the end user found your product worth paying for.

You need to figure out how to improve the engagement of your existing trial users to convert them to paid users.

ConvertKit and Edgar, which today generate millions of ARR, never offered free trials.

I often come across startups that give away free trials for 30 to 60 days. I just don’t get it.

I could not disagree more with his advice to eliminate or limit free trials to 14-days.  He states it as an absolute to the point that, “he just doesn’t get” why anyone would be stupid enough to offer a 30 or 60 day trial.

He gives only two odd exceptions to his rule:

  • A B2B SaaS offering costing more than $200 a month.  No explanation whatsoever why the arbitrary figure of $200 was chosen.
  • An offering where personal data had to be entered and value received increases proportionally to the amount of data entered.  He argues this creates switching costs, which is worthwhile, but actually misses the point.  What he misses is not only does it create switching costs, but the more data in services like DropBox, the more likely the user is to experience the “Aha” moment that closes the sale.  Switching costs come later, after the user is satisfied and someone else wants to woo them away.

Let’s dig into it with a couple of real world examples that I think will help explain the real reasons why you need to think about your Free Trial in terms of the user experience and not in terms of arbitrary advice from marketers.

Ironically, one of the reasons I tried but did not adopt KissMetrics (the very blog where this is posted) was because I could not tell within 14 days whether it would deliver value. In fact, KissMetrics is a wonderful illustration of the problem with this one-size-fits-all advice.

It’s biggest benefit is a better understanding of your sales funnel. So ask yourself, “How far does a user travel in the funnel in 14 days?” Further, how much of the 14 days is needed to get things set up and to accumulate enough people travelling through the funnel to make things even interesting?

You can now see where I’m going.  It might very easily take more than 14 days to get to that “Aha” moment where I see the value in a product like KissMetrics and I’m ready to pay up for it.  In fact, for my company, it really was longer than 14 days.  This was exacerbated by various aspects of the KissMetrics user experience.  It took the service time to accumulate enough data points to show me any funnel reports.  It took me time to understand the service well enough to get my funnels set up properly.  And it took time given my web site’s traffic to accumulate enough data points to see any kind of picture clearly.  BTW, it’s no small web site, I get 2 million uniques a year.  Pretty good for a small business.

I believe 30 days would’ve worked nicely for my case, but alas, I only had a 14-day trial to work with.  So I moved on.

Let’s try another recent personal example: Drip, the marketing automation app.  I wrote about my experience with them recently.  They had a 21-day trial.  During that time I was trying to:

  • Learn a complex new application
  • Tie in my mature and complex email best practices
  • Develop a new lead nurturing automation campaign far enough to evaluate the product

I felt it was reasonable that my “Aha” moments for Drip would include:

  1. Verifying it could do what my existing provider, Mailchimp, was already doing for my business.
  2. Verify that it could so something that Mailchimp couldn’t via its increased automation features. After all, Drip was going to be more expensive–it should show me some magic relative to Mailchimp during the trial.

As I documented in my write up, I was unable to accomplish these tasks within 14-days despite trying like crazy to get them done.  I had a mixture of problems ranging from product bugs to unclear UX to my own stupid noobie user mistakes.  I could not even get my email newsletter out, despite trying hard for 2 weeks running, so I couldn’t even verify Drip worked as well as Mailchimp, let alone see the impact of its new features.

I wound up sending Drip’s Founder an offer–extend the free trial and work with me until we can make my Drip experience a happy one.  In exchange, I’d buy the product and write about my experiences in places like this blog.  He declined, saying many of his competitors didn’t offer a free trial at all.

Here’s the thing:

If you’re going to offer a free trial, you really should make sure it is long enough that your users can reach the “Aha” moment where they’ve confidently demonstrated your product’s value and it’s an easy choice to reach into the pocketbook and become a paying customer.  Ignore all the other rules of them because reaching the “Aha” moment is the only thing that matters for your Free Trial.  That is its singular purpose.

If you’re not going to do that, why have a free trial at all?  I can’t imagine a reason unless it’s just part of the old bait and switch–get them to commit a little, even just give us their email, and each thing they give up will make the next thing that much easier.  That’s a well-understood marketing concept, and it even works to an extent, but is that really the way to build your successful business?

I can’t believe marketers think so, at least not the good marketers.  Please tell me you’re not in that camp.

Length of trial is something that should be tested, preferably AB tested if you can arrange it. Don’t get too greedy and eliminate your trials before your customers can experience the “Aha” moment that guarantees they will love the product. If you can make that happen in 14 days, great, but don’t just assume that’s the case.  Give them whatever time they need. Even offer to extend the free trial for ANOTHER 30 days if they’re not done evaluating.

You’d be surprised what treating your customers as human beings rather than inventory will do for you.

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