You see it everywhere – online, in print, on TV and radio.
The free trial offer has been around forever. And for certain products or services, the free trial will always have great appeal. Here’s why:
For consumers, the free trial offer provides would-be customers with a low-risk or no-risk opportunity to try a product before handing over any cash.
While no payment is required upfront, consumers need to be aware of the commitment they are making.
For marketers, the free trial offer helps to engage a larger volume of potential customers with the hope and expectation that a large percentage of those trials will convert into paying customers.
This is a classic two-step sales process that needs to focus on two sets of metrics – trial acquisition (number of trials) and paid customer acquisition (number of conversions).
But not every free trial offer is the same. Sometimes the difference is substantial and obvious; sometimes it’s small and subtle.
But even the slightest changes in the conditions of the offer will change the offer expectations for both the marketer and the consumer.
A brief history
The free trial has a long history of use by publishers selling newspapers and magazine subscriptions.
The idea is very simple: if you can give people a chance to try your product – to read a few issues of your magazine or newspaper – they will begin to see how valuable it is … and they will happily subscribe.
Simple, straightforward, clear and entirely risk-free.
But publishers wanted more – and many found that this model produced a lot of trials, but not enough paid conversions.
The negative option free trial
Soon, the free trial evolved into a very different offer – one that said “try out a few issues for free, but when the trial is finished, you will automatically be put on as a subscriber and you will receive an invoice. You can always cancel, but if you fail to notify us, you will be responsible for the purchase.”
This was known as the negative option trial offer. Compared to the original free trial offer, the negative option trial offer produce fewer trials but higher conversions.
Understandably, anyone who read the offer carefully could see the catch and chose to not respond. Of those who did respond, many never bothered to read the details or didn’t pay attention when the invoice arrived – and soon found themselves stuck with their purchase.
It’s difficult to know how many paid subscribers were willing participants and how many were simply victims of their own inattentiveness.
Enter the credit card
As the credit card became more prevalent in mail-order buying, publishers were able to push the negative option a little further to their advantage.
The newest trial offers required a credit card number with the promise that the customer would not be charged until the trial was finished.
Once again, some customers converted with the full understanding of their purchases, but others became paid subscribers without even knowing it.
The credit card also eliminated the slow payment and bad debt problems that were substantial with the negative option when subscriptions were only paid by check.
Now, when payment is due, the credit card is charged and payment is made immediately. Good for the marketer. Convenient for the consumer. But a little riskier for the consumer too because canceling a subscription isn’t always easy.
One tactic marketers have used to manipulate the free trial offer has been with the use of premiums, or free gifts in return for action. Here are two different ways to use premiums in your free trial offers:
Try four issues for free and get our FREE video. If you decide to cancel your subscription, keep the video.
Try four issues for free. Then get our FREE video when you become a paid subscriber.
See the difference? In one case, the video is used to increase trial subscribers. In the second, the video is used to increase conversions to paid subscribers.
It should be noted that both of these “free trial with premium” scenarios are going to make renewals more difficult. This is even more problematic when the premium has a higher perceived value than the product itself.
Many years ago, Sports Illustrated offered various videos – such as Super Bowl highlights and sports bloopers – as a premium for paid subscriptions to their magazine. For many of these paid subscribers, the motivation was more the video than the magazine – and this would clearly hurt them when it comes time for renewal.
Beyond the publishing world
Today, we see free trials being used for all sorts of products and services.
Offline, there are health clubs, storage facilities, dinner deliveries, child care and dating services.
Online, free trials have really taken off.
On the B2C side, there are movie services, book clubs, coffee clubs, shopping services, online games, dating services, family ancestry research services, personalized credit services.
On the B2B side, there are subscription-based services for many kinds of software platforms for sales, marketing, human resources, payroll and a host of very specialized, niche-focused services.
These companies try all types of free trial combinations to get customers on board.
Some require a credit card, while others do not. If you watch carefully, you’ll notice that more and more companies are emphasizing the fact that no credit card is required. It has become a major selling point. Recently, the credit service company, Credit Karma, has been using TV commercials to position itself as the only credit bureau that offers a free trial without a credit card.
Some provide very generous time periods for their trials but usually with conditions. For example, Constant Contact, the email service provider, offers a 60-day trial period but the trial ends immediately once your email list reaches a certain level. In the early days, that level was 100 subscribers. Now that minimum level has been reduced to just 10 subscribers in an apparent attempt to move customers more quickly into a paid plan.
Some charge for their trials. Aweber, another email service company, doesn’t offer a free trial, but instead charges $1 for a trial. A dollar isn’t very much money – so in many ways, it’s like a free trial – but by charging $1, you eliminate those who aren’t serious about using the service (which, by the way, only costs $19 per month). Clearly, Aweber is more interested in conversions to paid customers than in a large volume of trial users.
Best practices for the free trial offer
As you might expect, the free trial is a very appealing strategy for online businesses.
And the negative option provides additional advantages, but you should know, it is the subject of close scrutiny from the Federal Trade Association (FTA). For good reason. The negative option is also a very popular strategy for unscrupulous marketers.
If you are using a negative option, make sure your conditions are very clear and forthright. Your marching orders should be full disclosure, transparency and accessibility. To that end …
- Don’t hide the offer details in your Terms and Conditions. Bring the important details out front and make sure they are seen before anyone clicks the SUBMIT button.
- Don’t pre-check the consent box. This is a terrible trick that has put more unwanted software on my computer than I can count.
- Be clear about your cancellation process. Explain up front what it will take to cancel the subscription or membership. And don’t create overly burdensome hurdles for the customer.
- Don’t hide the link to your cancellation page. This is a real sign of bad business practices. You may have a cancellation page, but if you don’t help people find it on your website, what good is it?
Above all, treat your customers with respect and fairness. Too often, businesses see their customers not as people, but simply as a source of revenue. It’s important to change that mindset.