The need to increase demo and trial conversions in SaaS is one of the biggest issues that the sector faces on an almost constant basis.
Indeed, conversion rates from free trial-to-paid is one of the most important metrics that a SaaS company can track – and yet, many are struggling to improve the numbers.
The need to increase demo and trial conversions in SaaS is one of the biggest issues that the sector faces on an almost constant basis.
In 2016, Totango conducted an industry survey to get a view on the figures, the results of which were published in a SlideShare.
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The survey found that of the SaaS companies that depend on demos, free trials and freemium versions of their product to acquire customers, only one in four (27%) derive more than 25% of new business from them.
(Image source: slideshare.net)
What's a Good Free Trial Conversion Rate?
Many SaaS companies use demos and free trials as a means to entice people to fall in love with their product.
However, as we can see from the figures above, it’s a tough old game to get right.
Notejoy’s Ada Chen Rekhi conducted research for a LinkedIn article last year, and found that demo and free trial and conversions in SaaS ranged from between 1-10% to as much as 40-50%, depending on the business, the target customer base, and the “try before you buy” model.
The three models considered were freemium, a model that allows users to utilize the product for free while incurring charges for additional features; free trial without credit card, where users can access a demo without providing credit card details upfront; and free trial with credit card—i.e., the collection of credit card information before users can access the demo. In evaluating these models, a key focus was on how to increase free trial conversion, ensuring that free trial users seamlessly transition into paying customers.
(Image source: adachen.com)
It’s a mixed picture, for sure. Though it does seem – from this research at least – that collecting credit card details up-front does increase demo and trial conversion rates in SaaS.
Generally, however, we would agree with Lincoln Murphy from 16Ventures, who says that any SaaS company with a free trial-to-paid conversion rate of less than 25% needs to work on optimising for conversions.
How to Increase Demo and Free Trial Conversions in SaaS
Low conversion rates of course impact your bottom line. But, even if yours are above our unofficial 25% benchmark, there’s always room for improvement. Indeed, even a small increase can result in a big revenue boost.
Let’s consider some options for how you can increase demo and free trial conversions in SaaS.
Should You Collect Credit Card Details?
There’s no right or wrong answer for this.
The results from Rekhi’s research above suggests that asking for credit card details up-front will increase demo and free trial conversions in SaaS. However, Totango’s benchmark data tells a different and slightly more complicated story.
The reason is that asking for credit card information in the first place reduces the number of free trial sign-ups you can expect. In fact, SaaS companies that don't ask for credit card information see an increase in the number of visitors signing up for free trials – rising from 2% to 10%. This approach aims to optimize free trial conversion rates by improving the process to convert free trial users more effectively.
However, for those SaaS companies that do ask for credit card details, the free trial-to-paid conversion rate is 50%, compared to 15% for those that don’t.
But the plot thickens even more. The end-to-end conversion rate – which covers those who signed up for a free trial and are still a customer 90 days after converting to paid – doubles for those companies that don’t ask for credit card information up-front.
(Image source: totango.com)
Overall, this suggest that it is a better strategy not to ask for credit card information.
And this is supported by separate research from Invesp, which suggests that not asking for credit card info will increase demo and free trial conversions in SaaS by two times.
(Image source: invespcro.com)
However, with such a wide variety of results, the only thing you can do is to run some tests with your own product to see what works for you.
Limit Trial Time
Does your free trial period last for 30 days?
Likely it does. For some reason, this arbitrary number has become the industry standard when it comes to free trial duration.
However, 30 days may well be too long.
The reason is that most people who sign up for your free trial will take just 2-3 days to decide whether or not there is value in your product for them. This rapid evaluation period is crucial for both free users and paid customers. Ensuring a swift and positive experience during this timeframe is essential for converting free users into paying customers. It also underscores the importance of effective communication and support from your sales team to address any queries or concerns promptly.
Most, of course, won’t convert. Indeed, there will be large group of people who are only mildly interested in your product and will sign up for your free trial, have a little play with it, and never look at it again.
However, a small but crucial group of people will see the value in your offer and may be willing to pay for it if you act quickly. The fact of the matter is that if you let these people go a whole month before making contact with them to ask how they are getting on with the product and if they have any questions, many potential new customers will have gone cold. This is particularly true for opt-out free trials and free trial signups, where timely engagement is essential to retain their interest and potential conversion. It's crucial to reach out promptly to those who have opted for free trials or signed up for them to ensure a higher likelihood of conversion and customer retention.
You will need to consult your free trial user data to come up with the perfect number of days for your free trial period to last. Every SaaS product is different, and will require more or less time for users to discover its true value and functionality.
But, in order to increase demo and trial conversions in SaaS, you need to identify who your serious prospects are quickly, and to reach out sooner rather than later.
Here’s some sound advice from Close.io.
(Image source: blog.close.io)
Personalised Content Marketing
Once someone has signed up to your free trial, you will naturally have captured important user data, which you can then use to launch a personalised content marketing plan.
Personalisation is key in 2018 and beyond, and if you want to increase demo and trial conversions in SaaS, you need to be embracing the discipline to make meaningful connections with your potential customers while they are freshly engaged with your product.
Data-driven marketers will know exactly who it is that’s trialling the product, and will be able to determine exactly what they will need to make a purchase decision.
And personalisation is more than just using the prospect’s first name in email correspondence. In addition, you should be tailoring your content marketing offers by demographic, firmographic, and user-behavioural data.
Consider how-to videos, blog posts that highlight the most innovative functionality of your SaaS product, or case studies that demonstrate the value that existing customers have extracted since signing up.
Over to You
In summary, to enhance demo and trial conversions in SaaS, it's essential to consider key factors. Running tests can help determine the effectiveness of asking for credit card details up-front. Additionally, evaluating the duration of your free trial period is crucial. Embracing personalized content marketing is another valuable strategy to educate your prospects over the purchase line. These measures are vital not only for optimizing the free trial process but also for seamlessly converting trial users into paying customers.
If you need help with your strategy to increase demo and trial conversions in SaaS, get in touch with the high growth experts at Incisive Edge today.
