Everyone loves free stuff! While true, it can easily become a double-edged sword in the business world. Offering a free product or service is a good gesture and chances are many people will like to try out what you have to offer. On the flip side, as an entrepreneur, this might easily tank your profits, even leading to the collapse of your business.
So, are free trials an over-hyped concept or does it work?
Focus on the “Value” Not the “Free”
Most entrepreneurs usually fall for the trap that once they offer their product or service for free, customers will surely subscribe to it or make a purchase. The surprising thing is that there are customers who don’t mind enjoying a “premium” service for free without spending a dime. Once the free trial is over, they go back to the platforms they were using before. Other customers can be “Professional trial users” and might even set up another email address to continue enjoying the free trial.
So, how do you avoid this? It’s best to show your potential customers value rather than the next free thing they can jump on. Focus on tailoring a free trial experience that shows the customer the value of your product—it can even require a commitment from their side. You can have the free trial set up in a way that the customer adds their payment details, shares their opinion through a simple survey or pops up a suggestion inquiring whether the customer would like to experience even more features.
The free trial marketing strategy works wonders for web-based businesses mostly. Two industries in particular, Consumer services and Saas have a high free-to-paid conversion rate of 66.8% and 62.4% respectively.
Let’s take an example of the iGaming industry, which is quite popular in the UK. According to the UK Gambling Commission statistics, about 43% of the population wager monthly. It’s a favoured pastime activity and big business in the country. In 2023, the betting and gaming industry had a record-high revenue of £15 billion.
One of the biggest strategies the industry uses is bonuses and free trials. Promotions will act as “free money” that players can use to try out the games. Online casinos UK are also big on demo or free play, where players can try out games for free, whether it’s slots, blackjack, roulette or poker. The free-play option gives players virtual currency which they can use to place bets and learn all about the game. Once they enjoy their experience, they can proceed to wager real money.
Free Trials Aren’t A One-Size-Fits-All Approach
Before you adopt any free trial strategy, you need to take a step back and visualize how it will work for your business. For instance, there are free trials that are time-based and others feature-based. Even for those that are time-based, would it be wise to have a free trial for 7 days, 14 days, 1 month or more? Is your business primarily a B2B or B2C?
Such dynamics make it clear that businesses are different and their approach to free trial as a marketing strategy should be different. Even though web-based businesses can easily pull off a free trial marketing approach, enterprises with physical goods can still do the same. Just make sure that you’ve had a conversation with your client and that the KPIs and a payment plan are in the works. Otherwise, giving out your product for nothing will make the client value it at nothing.
One of the metrics to measure a successful free trial campaign is the conversion to paid customers. But, besides that, free trials are a great way to spread the word about your business through word of mouth. One happy free-trial user will share their experience with another.
