Back in 2015, an article from the American Marketing Association (AMA) discussed how to keep customers active when they all behave so differently. The paper drew attention to people that arrive at a business via a free trial, as these can’t be considered customers in the same vein as somebody that goes out to buy a product. They also don’t respond to the same marketing tricks as their paying counterparts. So, what makes these customers so strange?
A Favorite Tool
Free trials are particularly common in the software world (e.g. the Adobe suite) but they’re a favorite tool of marketers in lots of different industries. Online, the casino website Betfair offers free play on its latest slot games so that players can “shop around”. These games use dummy cash or tokens as an alternative to real money purchases. It works as an introduction of sorts for players unfamiliar with slots, before they step into the site’s huge range of available real-money games.
Free trials often use a timed model, however, which raises all sorts of questions. How long should a trial last? What features should be available? The answers obviously vary from one company to the next but, in general, the average trial period is around 14 days. There’s a belief that people with longer trials are more likely to buy a product in the end though, simply because it becomes essential to their workflow.
There’s obviously a risk that trial customers could exhaust the functionality of a piece of software within an extended test drive, hinting at a rather delicate balancing act. It’s not a good idea to give everything away upfront (and doing so may overload early users) but keeping key features under wraps may make an application perform way below its potential, scaring off buyers.
Lifetime Value
Returning to the AMA paper mentioned in the intro, the study found that free trial customers have 59% lower lifetime value to a company than regular customers. More recent figures, from the UserPilot website, suggest that the conversion rate of free trials depends on whether a person is asked to give their credit card information at the outset of the trial (“opt-out”) or not (“opt-in”). Put another way, it depends on an early commitment to buy, regardless of whether they intend to follow through or not.
Opt-in users have a low conversation rate of just under 20% while opt-out produces stats much closer to half (48.80%). Inevitably, some of the latter group will end up paying for their new software just because they’ve forgotten to disengage from the trial, in much the same way that gyms earn money from contracted customers that have decided they’d rather do something else – anything else – than go to the gym.
The AMA also mentions that free trial customers are more likely to respond to marketing materials than their paid-up counterparts. Problems such as high recurring costs and lack of information (45% of American users will leave a checkout if answers are hard to come by, according to Forrester) can push new users away. Thus, any evidence that these issues are solved is a boon.
While common, free trials still manage to create an unusual relationship between business and user as they lack the purchase that usually brings the two together. Still, they’re a relatively inexpensive way to build brand identity and shift units.