Marketing Sales Uncategorized

The Effectiveness of Free Trials

The free trial: it’s a business strategy as old as…well, I’m not sure how old it is exactly, but at least since the first time a month’s worth of forging was offered free at Ye Olde Blacksmith’s, businesses have tried to get people through the door by letting customers experience the product before they pay for it. But the question remains: does it actually work? Is the free trial a viable move that actually leads to demonstrable gains in sales?

If you guessed that the answer is “it depends,” you must have read this blog before. Different kinds of businesses do it, but it doesn’t work well for all of them. In fact, I’ve personally found it doesn’t work well for my own business (more on that below). That doesn’t mean it can’t work for yours. The real questions are: when does it work, and why? In the cases where it doesn’t work, are there alternatives?

When Free Trials Work

Certain types of businesses are perfect for the free trial. Generally, these are offline businesses with a real-world location. They sell a service that requires the customer to come to their location, rather than a product or service that’s deliverable. They get paid for this service on a recurring (usually monthly) basis. The free trial is a game-changer for these businesses, because they depend on getting people quite literally through the door, week after week and month after month.

Gyms, yoga studios, dojos, and even cooking classes benefit the most from the free trial. This is because these kinds of businesses can only thrive by convincing people to create a habit or modify their lifestyle. This commitment is understandably daunting, so allowing customers to get started in a risk-free way does wonders for generating sales. The customer tries the service without spending a dime, they build it into their schedule, and most importantly they get accustomed to it.

Ultimately, the customer signs up for the real thing at the end of the trial period. Ideally this is because they loved the service, found it a perfect match, and were so impressed that they couldn’t imagine giving it up. Sometimes, though, the customer has simply gotten comfortable. Even if they’re not blown away by the particulars of the business, people tend to stick with what they’ve been doing.

The free trial brings the customers in. Familiarity, a feeling of community, and simple habit keep them coming back.

Using Free Trials Online

Online businesses are trickier when it comes to free trials. Generally, online service businesses with a recurring payment system have the best chance at converting trials to sales. and treehouse are two prime examples. Both offer training; treehouse is mainly an online code-writing clinic, while offers tutorials in everything from marketing to cooking. Both offer free trials for new users, and both get sales conversions out of it.

To smoothly transition customers from the trial phase and ensure conversions, both sites require a credit card number to begin the free trial, despite there not being anything to pay for at that point. At the end of the trial, the customer is automatically enrolled and the card automatically charged each month, unless the customer actively opts out of the service. This is the best way for an online business to turn trials into sales- by leaving little or no gap, no interruption between the trial period and the real deal.

It’s important to note that this model is not to be confused with free trial scams in which a customer is unknowingly charged after the trial period, or in which opting out of the service is made difficult or impossible. A legitimate arrangement is clearly communicated with the customer from the outset, and cancellation is as easy as a few clicks of the mouse. When using this model, it’s vital to be explicit about the terms and ensure that the customer knows they’re secure.

Our Free Trial Experiment

Of course, I wouldn’t feel qualified to give advice on free trials had I never offered one myself. About a year ago, the $100 MBA experimented with a free trial, and to put it bluntly, it didn’t go well. That’s not because there’s anything wrong with free trials. It’s simply because free trials aren’t compatible with our business model. Mostly, the price structure of the $100 MBA doesn’t really lend itself to getting customers that way.

Technically, it was an “almost free” trial, since we offered temporary access to our programs for $1. For the cost of an arcade game, new customers could get the $100 MBA experience for a week. We didn’t know how it would go, but we knew the analytics would tell the story, and they did: after 6 months, it was clear that it was a dud. We simply saw no significant increase in customers overall, nor could we attribute many of the new signups we did get to the promotion.

While we didn’t get the sales, however, we did get valuable lessons.

The Alternative: Content Marketing

The reason for our free trial’s outcome wasn’t the promotion itself, but the facts of our normal sales model. The $100 MBA is a membership service, but we have a single fee for lifetime access. As mentioned, free trials work best in convincing customers to commit to recurring charges, rather than to making one purchase. Besides that, there was already a better way for customers to find out if our product is up their alley: our content marketing.

Simply put, we already give away free content. Lots of it. Regularly. Anyone who visits our website, reads our blog, or listens to our podcast is already getting a pretty clear picture of what we do. We even offer one of our most popular courses (on idea validation) free to anyone who wants it. At the end of the day, a week of access to everything else isn’t likely to convince anyone who wasn’t convinced already. Combine that with our arguably insane titular price tag, and it’s no surprise that a free trial didn’t send units flying off the virtual shelves.

In the end, the experiment confirmed our belief in content marketing as the best strategy for our kind of businesses. Blogs, eBooks, videos, trial versions of software, and webinars are all great ways to forge relationships with customers. By simply putting the content out there, with zero obligations on the consumer, we build the trust that supports sales. In a way, it’s a sort of never-ending, ongoing free trial that we work to refresh every day, producing new content to draw new members in.

Content marketing is also a good strategy for online businesses that sell physical goods. By constantly sharing their thoughts and ideas on the industry they’re in, or the activities their product supports, online retailers position themselves as people to be trusted, and give their products the stamp of expertise. Combined with a customer-friendly, no-risk return policy, content marketing can make customers feel as comfortable as any trial can.

Whatever your business is, I’d encourage you to experiment with all kinds of promotional strategies, including free trials. After all, if you’re not experimenting, you’re probably not innovating. Not everything you try will work out, but that doesn’t mean it’s not worth doing. The key is to gather and keep data, and use analytics to determine what works best. Give trial periods a…well, trial period of at least 6 weeks, and see what happens.

In the best-case scenario, you earn a significant amount of business. In the worst-case scenario, you learn something you can carry into your next experiment.