Free Plan or Free Trial?
Hi, Indiehackers! I am Andrei, founder of Clippulse. I’m trying to decide between having a free trial or a free plan, but it’s a pretty hard choice because they both have pros and cons. I’d love to hear your take on it!
A bit of context
Clippulse is a SaaS platform that helps people create promo videos for their products, without needing any video editing skills.
Since I launched it, about 5 months ago, there have been some changes to the business model. Initially, it had a pay-per-use model where people would only need to pay when they wanted to export a video. Everything else was free, which meant users could access all the features, without having to pay, unless they were satisfied and wanted to export their video.
While this model made some revenue, about a month ago, after looking at the data, I realized that the business wasn’t sustainable, so I decided to switch to a subscription model. At that point, I completely removed the free plan too.
The results weren’t as bad as I would have expected:
- MRR went from $0 to $102
- Total revenue made after those changes was $266 (in a bit over one month), which is more than it was before (the average was ~$100/month)
I took those numbers as a confirmation that I am on the right path here.
But still, with this approach, ~90% of users who sign up bounce after hitting the paywall, so it requires constant traffic and consistent marketing, which is something that I can’t afford to do at this point because I am a solo founder, having to deal with everything myself: coding, marketing, customer support. Also, the product is relatively new and it still needs a lot of improvements. It’s becoming clear that I have to allow users to try out the product before making a purchase.
Right now, I’m considering 2 options and they both have their pros and cons.
Option 1
A limited Free Plan with watermark exports, and limited features (basic animations, limited customizations, etc.)
Pros
- Would likely increase the visitor → user conversion
- It could be a free marketing channel because of the watermark exports
Cons
- Takes longer to implement
- Might result in high costs (because of the rendering costs)
- Could encourage users who are just curious and not really interested in the product to sign up, which could increase costs without a clear ROI.
Option 2
A 7-day free trial with the CC upfront, that can be cancelled at any time.
Pros
- Takes less time to implement
- The CC upfront could potentially filter out the users that are not really interested.
Cons
- Might discourage conversions for users who need just a few videos done quickly as they can just create and export them within 7 days.
What do you think?
Right now I’m leaning more towards the free trial, mainly because the current structure allows it to be done in less than a day. But I’d really like to hear some external opinions on this as well.
The free trial makes people more connected with the product as they have limited time.
The free plan makes people use your product less during this period as they will look the alternatives to combine with the abilities of your product and use it together.
As an entrepreneur, I would better choose a free trial.
Good point! Thanks!
I would do some A/B testing for your product with every different technique for a while, but I feel like that for this kind of SaaS there is a good chance that will get it right with a free-trial model.
Thank you! That's what I'll most likely do, starting with the free trial!
Here's a third option - a money-back guarantee, either 7-day or 30-day (you can play around with it).
If you were to get 1,000 users for free but who never paid, then your MRR has still not changed and you are not (necessarily) closer to building a viable business. I made this mistake early on as well, my goal was getting users. I realized though that users at all costs don't get me closer to building a sustainable and growing business - the value lies in knowing what type of users are willing to spend money, and what features do they value (which will likely be different from your free users).
Personally, I lean towards a free trial with a credit card at signup or a money-back guarantee.
Thank you for sharing! This is super helpful!
That's what I'm currently running: a 7-day money-back guarantee (it's my bad, I completely forgot to mention it). A lot of people bounce when they hit the paywall after the signup (probably because people think twice before entering their credit cards), but I also have to agree that the traffic and the signups haven't been so high since I introduced this. So the actual question here is whether I should replace that with a free plan or a free trial with a CC upfront. But I think you are right: changing it just for the sake of getting more users wouldn't necessarily mean I'm getting closer to building a viable business.
Maybe I could just keep the current structure and make the money-back guarantee clearer somehow? Or even offer some incentives like discounts that expire 10 minutes after signup for example?
No problem, glad it was helpful!
Those sound like great ideas - either clearer messaging or throwing in an "extra".
Depending on your business/audience the "freebies" will change. I am in a similar boat and offer free onboarding + setup to appeal to an audience that otherwise might be hesitant to buy (I'm in a B2B space, so this makes sense).
If you find with more traffic that your funnel still is not converting well, I'd swap to a credit card upfront free trial and see how that works. The fortunate thing is that these are fairly easy things to change, so I'd try to get a baseline for what your funnel looks like now and whether it improves with any changes you make.
How and where do you advertise the free onboarding + setup. I'm looking to do the same for Cater-Buddy currently. But I'm not sure where to advertise this best.
In the Ads, on the website, before singup, after singup? I also had a lot of people check out the app and try it out and then never came back, I believe the biggest issue was, them being lost what to do or how to do it.
Definitely mention it on the website, though if you have users who sign up you should be emailing them to offer it as well. Depending on volume, it could be manual or automated, but make sure to mention it there. Maybe an in-app notification as well? Lots of ways, think about how to deliver it on multiple fronts to new users (and probably bring it up in multiple ways as people are likely to miss it).
Great question!
I'd opt for a free trial here
Those paying for your product will offer better feedback and be more serious about using it on a consistent basis
Big plus but on a technical side, I've written these applications before where you have to limit functionality based on whether a user is logged in or not, and it sounds like with your type of app this will be sooo much longer to manage the experience for different types of customers... for a solo founder it's really worth just focusing on providing a great experience for paid customers
Thank you! The technical side is giving me headaches just thinking about it. The only thing that makes me consider the free plan is the marketing done via watermark exports, which may or may not be worth it.
I think you could probably do it how Supademo does this, providing a small "Made with Clippulse" in a corner without being obstructive to the content
That's what I had in mind for a free plan, but I don't really think it would be appropriate for a free trial though.
Tbh, I think if you do it so that it doesn't look like advertising it could work but I completely understand the reluctance to do that, as it doesn't feel very premium.
And I think the benefits of giving a free plan with the watermark are far outweighed by the amount of technical and CS effort required to maintain it.
As a compromise given that the watermark seems to be your main concern, you could have an in-app offer to some existing customers of a small discount on the product if they allow your watermark to be present. Wouldn't be technically difficult either, would just be a column in your DB for each customer. Just a consideration!
That's a good idea! Thanks a lot for taking the time to go through this!
Free trial. Try first, if you want it let's take it. If not give your seat to another one!
Looks like the free trial is a clear winner based on the replies here!
I think the free trial is better in this case. But you should pay special attention to the promotion: let your target audience know the product is PAID and the free trial is just an additional benefit.
That's a good point. It would be clearly stated. Thank you!
free trial is your best imo, because you will get users who want to pay but they want to try the product and you will filter out users who are looking for a free service
That's what I am thinking as well! The only thing that makes me consider the free plan is that free marketing via watermark exports (which may or may not work).
I'm also split on this topic. You will hear both sides and both have good points but at the end of the day, I decided on a free trial. Mostly because I want to avoid users who never plan on paying
That's one of the reasons pushing me toward a free trial too. The fact that each video export has a cost is an even stronger signal that a free plan with many exports might be a bad idea. But some free marketing via watermark exports sounds tempting too.
Thanks for sharing!