Miserable Free Trial Conversion Rate
I've recently decided to add a 14 day free trial to webtoapp.design. It's a huge success in terms of new sign-ups (roughly +500%), but miserable in terms of conversion to paid customers, even though they need to provide a payment method upfront. In total I get less paying customers than without free trials, because of the following reasons:
- Roughly 50% of people cancel their subscription during their free trial (which is expected and fine)
- Of those who don't cancel their subscription, 20% convert into paying subscribers, the other 80% have their payment method fail for various reasons:
- Insufficient funds (most common)
- transaction declined by bank/card policy
- credit card is marked as "lost"
So all in all I get like a 10% conversion rate from free trial to paid. According to https://firstpagesage.com/seo-blog/saas-free-trial-conversion-rate-benchmarks/ a normal conversion rate would be 48.8% for "opt-out" free trials (payment method provided upfront).
My only idea in regards to what I could change is having a longer free trial so people have more time to get value from the product and maybe less payments will fail then? Maybe a 14 day free trial is unusual and that's why payments fail?
I'm looking forward to your suggestions, thanks :)
Aulig, congrats on getting sign-ups 500% up. That's huge. 👏
Wanted to point out two things:
1/ Regarding the conversion rate benchmark, I'd encourage you to verify if ~50% is a good bar to keep for conversions from "started free trial" to "subscribe to a plan" stages. While not a direct comparison, you can take a look at a benchmark shared by OpenView VC in collaboration with Kyle and Lenny (https://www.lennysnewsletter.com/p/what-is-a-good-free-to-paid-conversion). It says conversion in a free-trial scenario is mostly in the range 8-12%, while the best products command 15-25%. If we are to go by this, the 10% conversion that you've cited is good. Would this make sense?
2/ Having said the above, I see (from the comments) that your product has a manual engagement during the free-trial - of you getting back to the customer with a preview of their app. IMO, this could imply two things:
Also, if you end up giving the preview version a few days after the trial starts, you might want to write to them about a trial extension - it would appear considerate and could give them the comfort of having a few more days to evaluate your product ("Btw, I've just extended your trial by a week, so that you have enough time to play around with the preview. Let me know what you think. Cheers!") This way, you don't have to change your free-trial flow that's in place, just a manual case-by-case free-trial extension with the appropriate message.
Curious to learn how this journey takes shape. All the best. 🙌
Wow, thanks for the detailed answer Matthew! I think the large difference in the trial to paid conversion rates are because some look at trials without and some at trials with payment details provided when starting the trial. In the link you sent they didn't specify it, so I assume that's without providing a payment method.
Contacting the customers manually about their preview could be a good idea though to get the conversation started in case they want to change their app a bit. I used to do that back in the day when everything was less automated and I think that got better conversions.
Thank you for the help!
I think you should go for the 14-day free trial - 14 days is sufficient for a user to test out your product
I'd also add 2 email flows:
Welcome email flow for nurturing new users and building rapport with them immediately
Educational email flows which is like an onboarding flow. You might already have an in-app onboarding flow but having an email flow for that doubles the results and helps the user learn and understand all aspects of your product
You can add in a scarcity based email at the end giving them a good offer if they upgrade before their free trial ends!
That's what I think would work!
how much email marketing you doing to the free trials, do you use amplitude?
When we cultivate a following of "free" minded people, we never tested the "V" in MVP. Viability is about money changing hands. Value innovation in Jamie Levy's book UX Strategy reduces cost by building one thing and increases buyer value by building the one thing missing in the market. Cultivate an audience with a legit problem, and the money will flow. Design Thinking is all about ensuring you're solving a legit problem. "Free" creates a tarnished brand from the start.
Don't think so.
Have you tried a 7-day free trial?
People will opt out even with a 21-day free trial.
Try keeping them at the end of their seats with a 7-day trial.
Also, do you send them emails during the trial period?
If you don't, you should send them a welcome sequence to educate them on the problems your product solves and how to use the product (I can help with this at a small fee).
If you do, have you tried making it better.?
Hi Iveren,
thanks for your feedback!
We need 1-3 days to create a preview of their app since that's a manual process. So 7 days would be too short probably.
We send them an e-mail telling them to wait a bit for the preview, then send another one once the preview is ready and afterwards remind them to check out the preview/start with publishing the app in the app stores, since that's the next step.