As a company that aims to be the best credit card processing for small business, Moolah clients run the gamut, from mom and pop boutiques to subscription-based software and services. For the latter, questions often come up for how to approach free trials. Are they affective for my subscription business, and if so, how can I do them right, to ensure that I’m not just throwing away money?
A healthy free trial program should be thought of as a customer acquisition tool. It’s a way to show off your service, and sell them. Most customers really like these trial periods, as it allows them to see the product on their own terms, and not in a sales situation. For many, it’s a crucial part to the conversion process. A recent study done by the subscription commerce software Recurly has shown that free trials are a great way to boost conversion, with average conversion rates upwards of 60%. With tangible products, free trials aren’t as important, because it’s more readily apparent what you’re getting—this is probably why I’ve yet to find a bakery that offers a 30-day donut trial period (if you find one, let me know).
The crucial variable for a successful free trial period strategy is considering the length. You want it long enough to obviously get acquainted with your product. You want people to have enough time to start feeling comfortable with, even attached to, the product. But it can’t be so long that they start taking your product for granted; you can’t give the full value upfront. They need to have something to miss once that free trial is over.
It was also noted that including a coupon or promotional rate at the beginning of that relationship can have a beneficial effect, making customers stay around for a longer life cycle. The same survey found an overall boost of 13% in length of customer lifetime when a coupon was involved in their first billing cycle.
It’s important to not lose track of what you’re trying to accomplish with all this discounting. Free trials generate conversions—that’s it. Any discount needs to be done smart, because the bottom line is serving your client in a way that is profitable for you over the lifetime of the client. This all points to a strategy of keeping clients engaged and happy. Discount won’t mean much to the client a few months in. What are you doing to keep that customer once you’ve got them? Are their preferences and actions changing, and you catering to these changing preferences? The key to doing that well is learning what your customer is all about, and Moolah, purveyors of the best credit card processing for small business, can help. With tons of beneficial integrations, great tech, and wonderful customer service to support you, Moolah is the payment processor that sets you up for success.