How to Effectively Convert Free Trial Users into Paying Customers in SaaS?

Converting free trial users into paying customers is the biggest challenge most SaaS businesses experience.

SaaS startups, more than most tech companies, have been in love with the free trial for years, if not forever. It’s easy to see why. Getting a demo into the hands of a potential user before you ask them to part with any hard-earned dollars seems like a no-brainer. Sure, you might get some folks who will sign up, take the tour and then disappear forever – but most customers can be convinced to stay, right?

When implementing a free trial, free users can sometimes feel limited. This lack of freedom may cause them to un-subscribe due to disappointment. But this shouldn’t happen if you know the right way to run your service– here are some insights you need to take into account if you run a SaaS Business.

In SaaS, What Is The Best Free Trial To Paid Conversion Rate?

Experts find real free trial conversion rates in SaaS business ranging from 1 to 15%, depending on the sector and market.

For SaaS startups, when measuring the success of a campaign that tries to convert free trial users into paying ones, the first key metric is the conversion rate which is the number of users that go from free trial to a paid plan divided by the total number of users in the trial period. Let’s say that we can successfully convert at least 10% of all our free trial users into paying users, we should be satisfied with the conversion rate.

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How Long Should A SaaS Product’s Free Trial Last?

SaaS businesses may set their trials for various lengths of time – you may have come across 7-day trials, 14 or 15-day trials, and even ones that last a month.

And, while it may appear to be a good idea to offer your users more time so they can better understand the value of your product, 30 days may be too long for certain companies.

There’s not a single accepted answer to this question. Some companies offer a free trial that lasts for 24 hours. Others, like Spotify, will let you try their product for free for 30 days. This begs the question: does it matter how long your trial period is? It depends on the type of product you’re selling and what your goals are.

The best way is to experiment with different lengths to find which one best suits your audience.

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What Are The Main Reasons Why Free Trial Customers Do Not Convert?

Conversion is one of the most important metrics for SaaS businesses, and it’s also a difficult metric to master. But what is it that holds business owners back from converting free trial users?

Experts believe that it typically comes down to one of three reasons:

  1. Broken activation experience (so people don’t obtain the real benefit of your product – or they do, but without a habit that will be sustained over time)
  2. Constructing the activation process purely for conversion purposes (instead of building habits in the user)
  3. Inconsistency between what the consumer expects and what the product provides.

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Broken Activation Experience

This occurs when:

  • Users that are testing your product are not getting onboarded – they are thrown into an empty app with no instructions.
  • They are not being properly onboarded.

Constructing the Activation Process Purely For Conversion Purposes

Customer retention is critical for all SaaS businesses. And that is what SaaS solutions should aspire to: to keep customers on board for as long as possible.

It’s fantastic to get someone to join up and make the initial payment, but after that — well, let’s say the ball is still rolling. You must focus on getting into the user’s workflow and ensuring that they develop a long-term habit of utilizing your product.

Short-term upgrades that increase the conversion rate to a paid account will only get you so far. Churn is far more expensive.

Inconsistency Between What The Customer Expects And What The Product Provides

User expectations for digital products are high. When you’re the customer, a product failing to meet those expectations can be frustrating.

In any sales funnel, one of the major pillars is sales and marketing. The bridge between what you promise your product or service to be and what your customer expects it to be is a vital link that ensures your success in the market.

Keep in mind that what your product does and what you say it does must be as consistent as possible.

What Factors Influence A User’s Decision To Convert?

We can be quite sure of one thing: most people will not pay unless they are forced to. So, if you give a full-featured trial with no restrictions, the great majority of customers will pay immediately before the trial finishes.

As a result, it may be preferable to create a freemium plan or a free trial with some use restrictions. For instance, the Radix trial allows you to use the platform for free if your MRR is under $10K.

This is how you can accelerate the conversion. The difficult thing, as experts point out, is designing it correctly.

The time of conversion is also determined by how and when you urge customers to pay. You might be able to speed up the procedure if you recommend paying faster.

Some Tactics to Convert Free Trial Users into Paying Customers

We all know how important it is to get users to sign up to your product during a free trial. But not all of your users will convert. So what are some tactics you can use to increase the number of paying customers coming from free trials?

Keep in mind: The ultimate goal is to ensure that the perceived value of the product is always greater than the perceived cost of the product.

You may try a variety of strategies to enhance free trial to paid conversion. Among them are the following:

  • Optimizing the check out experience.
  • Giving incentives to get people to convert faster.
  • Restricting trial features/usage limits/trial length.
  • Establishing an account-wide notice system when the trial period is going to end.

To wrap up…

There are a dozen ways to turn a free user into a paying customer. The simpler the process and the more value the free-trialing user experiences, the more likely it is that they will go through in upgrading to a paid account. If you don’t give away any of the honey before the bees pay, they’ll bounce before they stick.

Empower your users to take ownership of their final experience by sharing what you can right out of the blocks. The best way to do this is to create a seamless and well integrated flow between customers as they move from an entry level service up to one that provides more benefits.

You can try Radix out! Free Forever For Under $10K Revenue per Month

We can help you boost your free trial conversion rate by 25% by connecting your Stripe and PayPal to our AI tool called Trial Pulser.

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Read More:

How to Win Back Your Lost Trial Leads

Best Practices to Improve SaaS Onboarding

Trial User Onboarding Methods in SaaS

8 Strategies to Increase your Free Trial Conversion Rate

Luis Cordero Schiffmann
Luis Cordero Schiffmann
Digital Marketing Strategist & Web3 Passionate MBA with expertise in Science, Technology, and Innovation. I'm a big fan of the crypto revolution, the internet and business.