

Ask HN: Does a 60 Day Free Trial Ever Boost Signups? - Concours

We are using a 14 day free trial for our SaaS but I was wondering if a 60 Day free trial would be more appropriate to boost our numbers after reading about a couple of BigCorp doing this (Google).<p>Can share your thoughts ?
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Metatron
Worth a read: [http://www.kashflow.com/blog/the-effect-of-shorter-trial-
per...](http://www.kashflow.com/blog/the-effect-of-shorter-trial-periods-for-
saas/)

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Concours
Thanks a bunch for the link, that's a great reading.

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webstartupper
One way to decide on the free trial duration is by asking yourself - what is
the shortest amount of time that my typical customer will find the "aha"
moment using my software. This could be as little as one day and as much as
90/120 days depending on what the software does.

One benefit of a shorter trial is that it lets you iterate fast - if your
trial period is just 7 days, you could make a change and see its result in 7
days.

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sjs382
I started with a "7 Day Free Trial" and changed it to offer a "30 Day Money
Back Guarantee" instead. I don't have enough customers (nor have I been around
long enough) for my numbers to be statistically significant, but I haven't
seen a decrease in paid signups.

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Concours
I use both right now, 14 Day free trial and "30 Day Money Back Guarantee", I'm
looking for a way to increase my "Visitors to Trial" conversion rate, it's
below 5% at the moment and I'd love to bring it to 5%+ . I think I can keep
myTrial to Paid signups conversion rate high, so the first place to optimize
is the number of people signing up for the trial the trial.

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dqdo
I really depends on your product. The first thing that you need to consider is
the possible strategies: (A) Freemium, (B) Paid subscription with a short
trial, (C) paid subscription with a long trial, and (D) No trial but money
back guarantee.

The first strategy (Freemium) is only appropriate for a very very small
segment of saas applications. This model relies on huge network effects (aka
your product becomes more valueable as more people use it -- think Dropbox)
and often times 1% of the paid users cover the cost of the product. Most
companies that follow the Freemium model often burn cash very quickly and rely
on VC money to stay alive in the first 5 years of operations. This is not a
recommended strategy for most Saas products and should be avoided unless there
is clear evidence that your product benefits from the network effect and that
it is more valuable to monetize later on. The other situation where this
strategy might be appropriate is if you think that there is a high probability
that your users will convert to paid customers in the near future.

The second strategy (Paid subscription with a short trial) is the most common
strategy of Saas products. The reasoning behind this strategy is that it gives
the users a way to evaluate the software at a very low risk for a limited
amount of time. If the user finds value in the software, then they would
convert to purchasing it. For most Saas applications, there is almost no
difference between 14 days, 21 days, or 30 days of free trial. So optimizing
for the time period of the short subscription is usually not the best use of
your time.

The third strategy is the paid subscription with a long trial period. This
strategy is applicable for big business applications where it may take a very
long time to train and get everyone onboard the software. This strategy should
be used in the case where the number of users for the software within an
organization is very large (100s to 1000s). The risk of using this strategy
over the paid subscription with short trial is that you give the users too
long consider the purchasing decision. By giving them 2 months, some users
might forget about the software and why they were looking for it in the first
place. A situation where this strategy is ideal is when there is a very high
cost of switching to alternatives. For example, AWS offers 1 year of free tier
EC2 because they know that once you start using their product, it would be
relatively difficult (time consuming) to move your web product to App Engine
or Rackspace.

The fourth strategy is the money back guarantee. This is effective in
separating the people who truly want your software from the people who are
just shopping around and it makes the buying decision very close to the
beginning of the experience. The risk of this strategy is that some people may
be reluctant to give you their credit card information at the beginning unless
your product is very known.

TLDR: there are four different types of strategies that you can use in this
situation. For more established companies who have well known brand
recognition, I would recommend using the money back guarantee. For most saas
companies, a subscription with a short trial period is the recommended
strategy unless there is evidence to suggest that a longer trial period would
be more suitable for your software.

And finally there is one last thing to consider. Certain markets have existing
expectations for pricing and pricing strategies which you really have no
choice but to follow. The example that comes to mind is the database as a
service market. Both Parse and Firebase (as well as any other saas company in
this segment) offer users an unlimited time free trial. They expect to make
their money after the user's data usage increases which would naturally
convert them to paid users.

One last comment before I go. Remember that "strategy is choosing what not to
do". Out of these four strategies, you will need to determine which bucket
your product fits in and use the appropriate strategy.

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Concours
Thanks a bunch for your help Do , we're using strategy (B) + "30 Day Money
Back Guarantee" and I was wondering if a "60 Day free trial" (from 14 Day Free
Trial) would bring some change but it seems like I should look for something
else to optimize, I'm trying to hit a conversion rate of 5% for site visitors
(targeted traffic) .

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dqdo
A 5% conversion rate for site visitor seems quite high to me. I actually don't
recommend you optimizing for conversion rates -- this may sound
counterintuitive so I will explain.

Your conversion rate depends on the marketing channels that you use to bring
your users to your landing page and how relevant your product offering is for
the customers. You should track the conversion rate of your different
marketing channels to optimize your marketing spending mix (e.g., spending on
X brings Y number of leads per month with Z percentage of them converting).
Different marketing channels and marketing campaigns can bring in radically
different results so you should focus your spending on the ones that bring the
most bang for your buck.

The more money you spend on marketing, the lower your conversion becomes. This
is due to the fact that over time, you start getting lower quality leads to
your website. This is analogous to mining in less resource rich areas. As a
company, your goal is not to maximize your conversion rate (the effectiveness
of your spending) but rather to maximize your profits. If you think carefully,
it may make sense that the conversion rate (effectiveness of your spending)
can decrease while your profit increases. You can find more about this
argument in the economic concept of marginal vs. average cost.

For SAAS products, the most important metrics are: Life Time Value,
Acquisition Cost, and Churn Rate. You just need to make sure that your (LTV -
Acquistion Cost) > Profit + Costs and that your churn rate is not unreasonably
too high. A high churn rate (>5% annually) limits the potential growth of your
company in the long term.

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YOUGAVEL
Freemium model is always more attractive in this competitive market. You
increase leads and get more interested emails in your list. By
www.yougavel.com - All the best !!

