Subscription trial offers are often the most debated and discussed topic at a subscription business. Opinions range from offering a free trial, a paid trial to no trial at all. The important thing to remember is, no matter how much experience you or anyone else has on your team, no one has the experience and data on current products and prospective customers to know the perfect answer. Typically, surveying customers on what your offer price and the package does not yield accurate results because survey respondents do not respond in a way that will accurately tell you with confidence if they will actually pay and what price.
The best you can do is start with a well-informed plan based on the questions outlined below – then test, test, and test some more, to confirm your assumptions and optimize your results.
- Should You Offer a Free Trial?
- Should You Require a Payment for a Free Trial?
- How Much Should You Charge?
- How Long Should a Trial Be?
1. Should You Offer a Free Trial?
The first question when you’re considering a trial offer is whether you should be offering a free trial in the first place. Even if you find the answer is “no,” that doesn’t mean you can’t still offer a trial. It just may have to be a paid trial of a small amount instead of a completely free trial. Consider these questions as well:
a) Do you already offer lots of free content?
If you do, you probably shouldn’t give a free trial. For example, newspapers that offer free online content won’t want to offer a free trial if their content is already available for free online. A newspaper like the Guardian actually gathers subscription revenues through its iPad, iPhone, and mobile apps, proving that you can have subscription revenues even if you’re free online, but you shouldn’t be giving a free trial to those subscription apps.
b) Do a lot of people try to only use your information for a short period of time?
A good example of this is ConsumerReports.org, which has a lot of reviews and product recommendations listed on their site, but they keep the actual scientific ratings behind the paywall. A site with this setup shouldn’t offer a free trial when they’re already giving so much away for free. The problem here is that trial participants will just sign up for the free trial and then cancel right after they obtained the information they wanted. It certainly isn’t conducive to getting a lot of paying subscribers.
c) What about offering free samples to compel people to convert from free to paid?
A good example of this is Testing Mom, which offers 100 questions in exchange for just an email address. By obtaining an email address, they can then market other offers and potentially upsell you into a paying subscriber. A best practice to remember is if you’re giving access to one singular piece of content, you shouldn’t also be giving away free access to your entire subscription site.
d) What about offering a “light” version of your subscription to get people hooked so they’re going to want to pay for full access over time?
A good example of this is the subscription site Fast Case, which has a free iPhone app and a couple of other mobile apps for the Android and for the iPad. Because of this, it doesn’t make sense to just offer free access to their site on top of everything. Visitors can get a “light” version of Fast Case’s content for free through the mobile applications, and if they’re really interested in the service, they’ll pay for full access through the site.
e) Is your content or service unusual enough that it’s hard to explain to a newbie?
In some cases, letting visitors experience your subscription could be an easy way to get people interested in your product. A really great example of this is A Story Before Bed. A Story Before Bed records a grandparent or a parent reading a children’s story out loud. The site allows visitors to record a story for free with 19 available titles to record. Then they market to those people who have recorded for free to get them to pay to record other titles.
f) Are you in a highly competitive marketplace and you’re not really dominant?
This may be the time to offer a free trial. A good example is MorningStar, which offers information and databases regarding stocks, bonds, and mutual funds. This is obviously a very competitive marketplace and MorningStar, while being somewhat well known, is not a dominant brand like Financial Times, Forbes, or even the Motley Fool. So they offer a two week free trial to their premium service.
g) Do you have a refer-a-friend program built into your trial offer?
If you do, you may want to offer a free trial because you’re obviously going to get more leads that way. A good example of this is Dropbox. When Dropbox sends an email to someone who signs up for their service, they have an offer to get extra space for free. The offer is actually a link to refer-a-friend. For every friend referred, you get more gigabytes of storage space on Dropbox. Your friend who accepts the offer is sent an email where they can also receive 250 megabytes of bonus space. This is a great way to generate leads, generate word of mouth, and draw more people into your free offer and then try to sell them into your paying subscription plan.
h) Are you in a highly budget-conscious market?
A good example of this is Education Week, which markets to school principals and people in the education sector who are deciding policy, a very budget-conscious market. They offer a 2-week free trial. They also have a lot of free newsletters they use to try and get paying subscribers.
i) Is your content or service so engaging and segmented into chapters that almost once people get started, they’re going to want to keep going?
A really great example of this is Lynda.com, where they offer Google analytics essential training. If you go to the table of contents for the Google analytics essential training, the blue lines of text are videos that anybody can view for free, whereas the gray lines of text require a subscription.
Obviously, if somebody wants to learn Google analytics, they’re going to want to watch a sample to make sure that the content is the type that they can understand and is worth their while. If they’re really invested in learning Google analytics and they find that those first few videos are really great, they’re obviously going to be hooked and are going to want to continue into a conversion so they can get the full breadth of content.
2. Should You Require a Payment for a Free Trial?
A credit card number at sign-up should always be required to automate the process of charging for a subscription when the time arrives. It also psychologically conveys the idea that your content is worth money and they are signing up for something that will eventually be converted into a paid service.
Avoid charging a preauthorization hold, which is a minimal amount like a dollar or the monthly subscription amount, held until the end of the trial. Those sorts of charges are getting a lot of pushback from the credit card companies, so it’s advisable to wait until the end of the trial to actually charge somebody’s credit card.
One option is to implement a paid trial for just a dollar. When you implement a paid trial, you’re getting a much more qualified lead of somebody who’s willing to pay for your service. If somebody is willing to spend a dollar, it’s highly likely that they’re also going to spend more money on your site.
The exception to the “always get a credit card” rule is if your trial is a light version of your service. An example of this is Highrise. If you look at the very bottom, they have a free plan for 2 users and 250 contacts. They are offering a light version for free, which is effective because people who may not need more advanced services can first get accustomed to the site. Then as their career blossoms or as their business grows, they will probably upgrade. Another interesting move is how they bury the trial. There’s no big “Free Trial” button, which allows people to choose from their subscription plans first.
As for processing the first charge, it’s advisable wait until the end of the trial, or to give a little bit of a grace period. For instance, if someone signs up for a 10-day trial, wait until day 12 to charge their card, as they may cancel on day 10. The more chargebacks and refunds are minimized, the better. A grace period tends to minimize all the dreaded payment processing snafus.
Providing written confirmation of the charge either by mail or by email is a must. An email will usually suffice, and when the account is charged, make sure that your merchant account, or the account that’s listed on your customer’s credit card statement, is your site’s name and not that of your parent company (or educate that the parent company will be billing). This may require setting up separate merchant accounts for each of your sites, if you have different sites. Making it very clear to your trial members about what they’re getting will minimize chargebacks. An unfamiliar name on a credit card statement is a surefire way to have people start questioning those charges and possibly issue a chargeback.
3. How Much do You Charge?
It is advisable to just go as low as 99 cents, which seems to be working really well in the newspaper industry for metered paywalls. Testing is key along with measuring the conversions and the lifetime value by test group before beginning. If you have a rather expensive business-to-business (B2B) subscription plan, you could make the case that a $99 trial for 14 to 30 days might help with your customer base.
4. How Long Should a Trial Be?
Many sites vary the amount of time they devote to a trial. Seven, 14, and 30-day trials are the most popular amongst B2B and B2C sites. 30 days is usually too long, and unfortunately, most subscription companies don’t test their trial length. Testing will really help to determine how long your trial should be. Here are some questions to ask to help you get to a starting trial length:
- How long does it take someone to become fully engaged in the service, so much so that leaving your service would be painful for them because they’ve gotten so accustomed to it?
- How long does your new user education process take? If you have an email series that offers first steps and then follow up emails to get new members on board, how long does that usually take?
- How long does it take for them to forget that they got the service entirely?
A high amount of churn due to trial cancellations can be a sign of a trial period that is too long. Shortening the length of a trial will cut down on people who sign up for the trial, get access for free or for a dollar, and then leave.
As with any offer, you will need to test all of your assumptions. Many subscription businesses simply do not do enough testing in this area. One of the reasons is low traffic, which means it will take a long time to get enough data to be statistically relevant. And that’s with an understanding of the upfront conversion of your trial offers! You will need to track each test group through trial conversion to customer their first renewal anniversary and even long-term, understanding the full lifetime value of that customer!
