As I’ve settled into my quarantine routine, I’ve started trying a lot of new digital products and services–from dipping my toe into grocery delivery with Instacart, to trying a new online workout class, to finally using my free year of Apple TV+. These new elements of my routine are all due to the fact that my daily routine looks a little different these days. But they also have something else in common: I did a free trial for each one.
When I think about my new habits, they’re not really new at all. As consumers, we like to try things out before we buy them. We test-drive cars, try different foods at the grocery store, and enjoy free samples of new beauty products. It’s human nature. And while users of business software differ from someone shopping for a car or their weekly groceries, it makes sense why offering a free version of a product is effective.
The appeal of free
One of the best ways to build awareness of your product is to engage people through the product itself. For product-led companies, this is true at many points in the customer journey–from onboarding and education to expansion and renewal. Offering a free version of your product lets users try it out before they purchase it, giving them the chance to see the product’s value and the problems it can solve for them.
The challenge? Product managers need to make sure this first experience and impression of the product are so good that users will ultimately want to pay for it. And as the title of this article suggests, there are many different ways to go about “free.” Once you’ve decided you want to leverage some form of a free product, the next step is to determine which approach is right for you.
Breaking down the options
In theory, “free” has a straightforward definition. However, it’s important to understand the different types of free product offerings. Maybe one stands out as the clear choice for your organization. Or maybe, it makes sense to do a combination of multiple forms of free. The right approach will ultimately depend on your product, your users, and your overall business priorities.
A freemium product gives users access to part of the product for an unlimited time. It doesn’t include the product’s entire feature set or functionality. You don’t want to give away too much or too little. The goal is to offer enough to clearly show the product’s value, but still leave users wanting more. More importantly, you need to be clear upfront about what users can expect from the experience.
There are different ways to approach the limitations of your freemium product. They include:
In this scenario, users only have access to certain elements of your product. Companies often choose to offer the foundational components of their product for free, saving more advanced (and valuable) functionality as a reason for users to upgrade.
This tactic works best when there isn’t a direct alternative that users could turn to instead. Many news websites utilize this approach, where readers can access a certain number of articles for free per month. Otherwise, they have to pay for a subscription. Another way to limit usage is by the number of monthly users allowed to access your product.
Another way to limit access is through your support offerings. Freemium users may only be able to utilize self-service support options. Paying customers, on the other hand, receive a customer success manager and access to a certain number of hours from your professional services or training team.
One of the biggest benefits of using a freemium product is that it puts less pressure on your users. This way, they can experience your product and (ideally) see enough value that they are inclined to purchase the paid version. Additionally, users might not need your product’s full functionality when they first sign up for freemium. But as their company grows and their needs change, your product can offer solutions without requiring a switch to an entirely new option.
Make it easy to upgrade
If you have a freemium product, think about how you can offer upgrade options at natural points in users’ workflows. For example, if the free version of your product limits the amount of storage space users have, you can use in-app notifications to notify them when their storage is almost out, and provide a direct link to purchase more. In-app guides are also useful for letting users know about an upgrade option they might not be aware of.
A free trial lets users experience a product’s entire functionality for free, for a limited period of time. The time limit helps create a sense of urgency, driving users to convert to paying customers so that they don’t lose the value they experienced in the trial period. This is also known as the fear of loss. Humans typically feel the pain of loss as a multiple of the joy from an equivalent gain. So, when a product’s value is easy to experience via a free trial, users don’t want to give up something they find beneficial to their personal or professional lives. The power of a free trial isn’t necessarily that it’s free of cost. It’s more that when it works, it encourages active, long-term usage of the product.
Users may also be more likely to convert since they are exposed to the entire product during a free trial (especially if you require a credit card to sign up). OpenView Partners found that the median free-to-paid conversion rate for free trial products (14%) is roughly twice the conversion rate for freemium products (7%).
A less-obvious benefit of a free trial is that it doesn’t require you to support users who aren’t generating revenue for your business. Once the trial ends, they either purchase the product or stop using it. Not to mention the users that do end up converting from a free trial are likely highly engaged since they have already found value in your product.
Leveraging in-app messages to convert trial users
If you’re looking to proactively convert your free trial users to paying customers, one of the best tools at your disposal is your product itself. First, look at your product data to try to uncover any patterns among those who convert to paying customers. Once you’ve identified which features or workflows drive conversions, you can set up in-app walkthroughs to steer users to those particular features or actions in the product.
When a free trial isn’t the answer
While free trials can be extremely effective, there are still some downsides. Here are some reasons why it might make sense to skip a free trial offering (or augment it with other options):
- Users can’t find value in that short of a time. Some applications require longer usage before users see value. An example is if they need to build up their data collection before being able to analyze it.
- The product is too complicated for a trial. Ideally, you’ve set up an effective in-app onboarding flow to introduce trial users to your product. However, in some cases, complicated integrations or configurations can’t be completed during a trial period or without proper training.
- The free trial gives away all the value. If users come to your product to complete a single task or action once a year (or even once a month), it might not make sense to give this away in a free trial.
A product tour offers a guided walkthrough of your product that prospective customers can access at any time. The experience is limited to the functionality that the tour offers. However, it can be an effective way to expose people to your product without asking for any sort of commitment. One way to remedy this is to create multiple product tours, each focusing on a different element or functionality in your product. This way, people can not only choose the tour(s) that are most interesting to them, but you can show more areas of your product without overwhelming someone in a single experience.
Here are three tips for creating an effective product tour:
- Show a logical workflow. Rather than jumping from feature to feature in no clear order, design your tour to showcase a logical way of navigating your product. It can be helpful to choose a specific task. Ideally, select something that will show the value of your product. Then, walk prospective users through the steps, pointing out the benefits and ease of use along the way.
- Be concise. Every product tour requires complementary text to help explain what’s being shown. Still, you don’t want to risk turning people away by making them read too much. Focus on keeping any text as concise as possible, clearly articulating the steps of the tour without distracting or adding confusion.
- Provide a next step. Once someone completes the tour, what’s the ideal next step? Think about where you want to lead viewers, whether it’s to another tour, more resources about your product, or a place to request a full demo. Then, create a clear call to action that will keep people engaged with your business after they’ve completed a tour.
Combining product tours with other forms of free
If you already have a freemium product or free trial offer, product tours can be particularly effective in upselling those users by exposing them to additional parts of the product. To make the experience more personalized, you can tailor any content you provide (videos, customer success stories, etc.) to the user’s role, account type, or use case. And, be sure that any relevant pricing or purchasing information is easily accessible (for example, by linking to these resources within the demo).
No matter which form of free your team chooses, be sure to set goals, track your data, and keep a pulse on user satisfaction. Best of luck on this exciting new stage of your product-led journey.