With so many businesses operating 100% online these days and the others all marketing and advertising online, it’s led to an increase in the number of SaaS (software as a service) applications to come to market.
This business model is great because it creates more ARR (annual recurring revenue) as it becomes more popular and builds a user base. One of the most popular options to get users signed up is to offer a free trial, and then hope they love the product so much that they continue on as a paying customer.
It’s a business model that has created several seven, eight, nine and even ten-figure businesses. It would be foolish to assume that all of the trial users will convert into a paying customer, so every SaaS company is constantly looking for ways to increase their paid conversion rates.
There are several strategies that you can implement in order to push more free users into paid users, and they can easily be tweaked to work for almost any SaaS out there. As this business model becomes more popular and SaaS products are created in more niches, I wanted to put this list together.
So, whether you have an existing SaaS product or are thinking of launching one, consider this information when mapping out your marketing strategy around converting free trials into recurring revenue for your business.
These will help you convert more paying SaaS users..
Offer all features during the free trail and make converting to a paid user a one-click process.
I see some SaaS products that offer a free trial, but the features are limited and the access it provides doesn’t allow you to give it a real run through. As a customer, it’s really hard to see the value unless you are able to explore all of the features and see all of the capabilities. This results on most of the trial customers abandoning the product and losing interest.
I know that is the case with myself, as I am always giving new SEO and marketing SaaS products a look. If you want to increase the odds of converting trial customers, then you have to pull back the curtains fully and let prospective customers have access to all of the bells and whistles from day one.
How else are they going to know whether or not your product is going to be a good fit for them? If you built something amazing, then you should want every trial customer to experience your best features, so they can’t wait to continue using your SaaS product. If you limit your free trial, you are only hurting yourself.
Don’t require a credit card to start a free trial.
This is another huge mistake that I see so many SaaS launches make. Sure, they might offer full access to all features, but they require a trial user to enter credit card info and select a package before even gaining access to the product. This is a huge mistake that acts as customer repellent and greatly reduces the number of people that jump on your free trial offer.
Even if you say they can cancel prior to the trial running out that still doesn’t work, because most people are uncomfortable entering credit card details or even half-committing to anything that they haven’t explored yet.
Many people think that if they capture credit card details ahead of time it will increase the number of users that roll into paid plans. This couldn’t be further from the truth. If your product is good and the customer loves the trial, then they are going to be more than willing to take out their wallet and sign up. Allowing trial registration without payment details will increase the number of users that take a test drive, which directly results in more paid users.
Give an incentive to switch from the free trial to a paid subscription before the end date.
A lot of SaaS products will do everything right that we have already touched on. They will offer a free trial with access to all features and they will allow this access without asking for any payment method. They will attract trial users, but then they fall off the map and don’t convert into paid subscribers. Why is this?
Well, one reason is that they simply don’t put an offer in front of the trial users right before the free period expires. This is such a simple, yet highly costly mistake. You want to attempt to convert your trial users while they are exploring your SaaS product and in the right state of mind. If you wait until the trial expires, they might have lost interest, so it’s important to get them while their excitement level is at an all-time high.
You should consider hitting them with an offer at the halfway point but make it so irresistible that they bite right away. You could do something as simple as 50% off if they commit to 12-month, 25% off if they commit to 6-months and 10% off if they opt for a month-to-month plan.
Create FOMO near the end of the free trial period.
If you take my advice above and offer an attractive discounted offer long before the trial is over this allows you to run a campaign that is designed to instill FOMO (fear of missing out) for the second half of the free trial.
Emails that remind the user how many days are left of the trial (and the special pricing offer) will keep the offer on their mind, and then if you combine that will intelligent popups and header banners within the SaaS it can create a very powerful marketing punch that will drive more users to convert on that discounted offer.
A little bar on top that will show a countdown timer along with the special savings will remind them that the tool or software they are using will end soon, but if they act quickly, they can lock it in for a period of time at a reduced rate.
FOMO is very powerful and when done correctly, and when paired with a great product, it can really spike your conversion rates. You want to keep it subtle though and not overly in-their-face.
Offer a trial extension rather than losing the user for good.
So, no matter how good your SaaS is, you aren’t going to convert all free trial users into paying customers. They might not have the funds at the moment, or they simply might just need a bit more time or convincing.
One of the hardest things is attracting trial users, so why push them away if they don’t buy right away? Then you just have to spend time and money to go out and lure in more trial users. Rather than turn your back on them, set it up so a trial extension is automatically offered to anyone that doesn’t convert into a paid user in 72 hours.
You should have a reminder message that is deployed after 24 hours, which reminds the user that they need to convert to a paid user in order to continue to use the product. You can also extend the special pricing offer one last time. Give them a couple days to bite, and if they don’t, then offer the extension.
It’s much more cost effective to extend additional trial time than have to rely on getting another batch of trial users. This strategy allows you to build up your trial users, and as this snowballs, your paid user rate is going to naturally increase because of it.
Have multiple pricing options available.
One size doesn’t fit all, especially when it comes to most SaaS tools. Staying within the SEO world, there are several tools that crawl the web, identify links, etc. They all have multiple pricing options, based on use. Some people will need just basic use while others on an agency level will push your SaaS to the max. You need to have pricing options that relate to usage and feature access.
Not only does this help you scale, because you are charging according to use, but it also helps to not exclude any users because you have outpriced them. You might have some potential customers that love your service and would use it if you simply had an option that make sense cost-wise.
You can prevent the small percentage of users that require a lower price point from going to a competitor by offering this, and the opportunity to upgrade them to a higher monthly plan in the future always exists as well.
Send heavily discounted subscription offers to inactive users.
It costs time and money to attract every single trial user, so try to generate some revenue from them even long after they become inactive. They are in your CMS and they were clearly interested in your SaaS at one point, so maybe you can get them to come back to life with a highly discounted offer.
I would set up a 30-day, 60-day, 90-day and 120-day campaign. Each one with a more outrageous offer. You could do something like 10%, 25%, 40% and 60%. At these points in the funnel, the odds of them converting gets lower over time, so if you are able to generate revenue from old leads like this it should be welcomed with open arms, even if it’s highly discounted. This is revenue for your business that you would otherwise not see.
You can even bundle them, requiring them to pre-pay for 3, 6 or 12 months in advance in order to take advantage of the deep discounts. While you are offering a deal, they are committing to long term use, which benefits great products, as the renewal rate will always be high if your SaaS delivers value.
Run a separate campaign for those whose account has been paused due to failed payment attempts.
Every SaaS will have users that eventually fall into the “failed payment” bucket, and often times it’s something as simple as them forgetting to update their billing info due to an expired credit card or being issued a new card number after having their information compromised.
If you don’t have a campaign set up to target these users you are leaving money on the table. It’s going to happen, as it’s part of business. Some people will have their payment method fail because of the examples I mentioned above, while many will simply fail because they don’t have money.
There are so many businesses running with very thin operating budgets, and failed payments are common to them. It just depends on when your billing cycle hits and what their account looks like at that moment.
It’s happened to me in the past because I forgot to update a new expiration date and 3-digit security code after being issued a new card. Once it failed my access was cut, which pissed me off. I would suggest sending out a reminder message for the customer to update their billing rather than just cutting off access, as mistakes do happen. If there is no update for a few days, sure limit service, but not right away. You never want to upset paying customers like that.
Heavily market to your free trial users while they are most active and highlight all of your top features.
If you expect your free trial to sell itself you are dreaming. Yes, the users’ experience while testing it out plays a huge role, you have to understand that most people that will be giving your SaaS a test run have a million other things on their plate.
You need to have a well-designed automated marketing strategy in place that mirrors the average trial users experience. For example, if you have a tutorial that walks the user through the software, you will want your marketing to mirror it, highlighting features that they may have just used.
Don’t be afraid to market during the trial period. If you don’t you will see a very low paid subscription rate. Tell them why they need to convert to a paid user. Constantly show them features and highlight what your SaaS is best at. You need to do this while you have their attention and interest.
Conclusion
It’s very hard to get a consumer to sign up for a SaaS product and pay without giving it a test drive first. There are so many options available, so your best shot at attracting potential users is to allow them to fully test all of your product’s features.
There is no better proof than actual use. Video demos and screen shots simply aren’t enough. Give a trial that provides access to all of the features and let your product do the talking.
If you have truly created something special and the consumer feels that it provides him or her with value, then you are likely to see them convert to a paying customer before the trial period expires.
How many of you own a SaaS product? If you do, are you currently offering a trail period? I’d love to hear what has worked for you in the comments below — and if you have anything to add to the information I’ve mapped out above.
