5 top reasons to give a Free Trial Pricing plan for your product
Saas industry is growing rapidly. We all saw the new normal workplaces while we were working from home. Our dependency on softwares like a tracker, productivity manager, attendance, etc went to our fingertips.
As a product owner of any SAAS business, it is very easy to find competitors in the market trying to share the visibility. Everyone is able to offer a solution to industry pain points with software. How would you as a product owner come out of the box and convince your potential customers to try your SAAS? Offering a Free Trial is the answer. This strategy of pricing is seen very commonly with a lot of web applications. Why should you consider this in your pricing strategy?
In this blog, we are going to share our experience of adding a Free trial plan to SAAS business that assists in business growth.
Let’s know them.
5 Reasons to have a Free Trial pricing plan
Here are those golden reasons. Before we explain them in detail, it is important to note that having a free trial pricing plan is not necessary for every saas business. For example, if your business offers custom solutions that need pre onboarding implementations, or complex technical integration then having a free trial plan would be a pain. Alternatively, you can give free demos or schedule meetings before the deal is made.
But, what if you find yourself eligible for a free trial pricing strategy? Then, here are your reasons to add them to your pricing table.
- It acts as a qualified lead generation process.
- Allow Decision-makers to become validated customers.
- Best way to obtain feedback.
- Long-term commitment fear gets reduced.
- Improves your marketing goals.
Well, we can brag about more reasons but they all will narrow down to the above 5 reasons. Let us understand these 5 reasons in detail.
1. Generate Qualified Leads
A lot of visitors who check your pricing page, would never go ahead and try your software if you add a payment gateway link between your landing page and software signup. You can reduce this by adding options like.
- Some X days money-back guarantee [ * No question asked ]
- 1 month free on quarterly or annual plans.
- Showing a demo using scheduling the same.
But in reality, people don’t have time to understand how you are trying to be benefited. They are in search of a solution to which they can quickly try and relate their needs to your features.
When you offer a free trial pricing plan, you are inviting them to have a look at what you had built for them and how it can solve their problems.
At this stage also, you will see customer retention deteriorate a little because most of them would be at the decision stage but they end up sharing themselves as a lead to your business.
When such leads are generated, it is easy for your sales or marketing team to automate or do a manual follow-up with them. Assist them at places where they got stuck or alternatively create some online course platform or academy to teach them about your SAAS working and usage. A lot of saas businesses that created SAAS tools are using this academy strategy to generate qualified leads who would potentially be interested in buying their software post learning how to use it.
Anytime you can use these leads for marketing and remarketing and use this as a process to build brand value among your niche audience.
2. Allow Decision makers to become validated customers
In the previous block of the article, we understood that a lot of your website visitors would be in a decision stage where they would be searching for different alternatives to relate needs with key features.
These decision-makers are your direct customers. If your landing pages and demos are convincing, they will sign up for their software and give it a try. Here, if you don’t give a free trial to allow them to learn about your innovation, you would lose out on your customer.
Hence, reducing the multistep checkout process to a quick free trial will allow your business to acquire decision-makers inside your business which will eventually pay for upgrading if found value for their business operations.
3. The Best way to obtain feedback
A lot of SAAS businesses believe in following the lean startup method to scale up. In this process, they test their MVP [ Minimum viable product ] with a limited audience in order to match their plan with a random niche audience. This helps them identify if their roadmap is going as planned or not.
Building MVP also comes at a cost hence to be in a more profitable state, it is important that you take feedback and keep building. When you push a free trial pricing method in your strategy, it not only gives you some early adopters but gives you an opportunity to get genuine feedback from real users.
You will find a lot of marketplaces asking for a customer list and then push emails to them to leave back feedback/review in return for some amazon gift card etc. This doesn’t give legit feedback.
Adding a free trial and taking feedback from early adopters will give you the right reason to make changes in the roadmap and build the perfect product in the market for your customers.
4. Long term commitment fear gets reduced
Let’s explain this with an example. Mr. Roger was looking for HR Software. He searched for a lot of alternatives and finally filtered two HR Softwares. Here was the pricing for both of them.
[It is assumed here that both the HR Softwares are renowned once in the industry]
HR SAAS 1 – It had a pricing of 4 USD/employee if paid monthly and 3 USD/employee if paid on an annual plan with no trial offer but 30 days money-back guarantee with no questions asked policy.
HR SAAS 2 – It had a free trial for up to 10 employees and beyond that, it priced at 4 USD/employee when paid monthly, 3 USD/employee if paid quarterly and 2 USD/employee if paid annually.
Mr. Roger will be happy with a pricing plan like HR SAAS 2. Reasons?
- Buyers get the flexibility to choose.
- They get a chance to explore their adaptability to the technology.
- It is affordable for small size businesses.
It is like a two-way benefit. The customer gets the flexibility to adapt and the product owner gets a chance to get feedback or generate leads of potential buyers who can pay for a long-term commitment.
So, if you have a doubt about having a free trial in your plan, recall the story of Mr. Roger narrated above.
Let’s get down to the last reason for having a free trial pricing plan.
5. Improves your marketing goals.
When you do saas marketing, there are a lot of goals that you set to track the user journey. You shall be doing email marketing and improve subscribers, run ads to build brand awareness, perform SEO to improve website traffic but in the end what matters is the revenue that your business is generating.
All saas marketing strategies need a good conversion. Having a free trial pricing plan will boost your marketing goals. The SEO that you do, the ads that you will run, etc strategy will push users to your pricing page. If you offer a deal like this, it is very obvious that your business will win more customers.
Final Thought
This blog has emphasized on the best reason to have a free trial pricing plan but this is important to keep in mind that it will not be applicable for all business. Also, if you are offering a premium tool or what to give the sense of some premium-priced or purely corporate clientele then you can avoid having a free trial but make sure that your marketing strategies are aligned with your audience journey of choosing something similar like what you are going to offer.
Author bio:
Snehil Prakash
Snehil Prakash is a digital consultant working with businesses globally, serial entrepreneur, author, saas, and coffee addict. He loves talking about growing business online and writing about subjects that have brought results for him. Apart from these, you will always find him playing with books, music, and the coffee mug.
