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The Effect of Shorter Trial Periods for SaaS

A couple of months ago I wrote that we were reducing our free trial period for our online accounting software.

To summarise: we have always offered a 60 day trial, one of the longest in our industry. I decided to drop it to 14 days – one of the shortest. The reasoning for this was that of those that didn’t convert into paying customers after the trial, by far the most cited reason was that they didn’t get a chance to take a look.

My theory was that 60 days is a long time, so it wasn’t high on their priority list. Making the trial much shorter would hopefully focus their minds on taking the time to evaluate the software.

The comments on the original post are an interesting read. It might be more honest to say they’re a “scary read” if you’re in my position. The end of the world was predicted. So what actually happened?

Sign-ups to Trial

One of the concerns was how a shorter trial period would affect conversions from web visitor to trialist. We’d recently received a massive boost on this metric from a completely redesigned site and really didn’t want to see it go down.
If people aren’t willing to take the first step to see how awesome our software is then we’ve got no chance of turning them in to paying customers.

The result? Well, nothing really. Reducing the trial period from 60 to 14 days had no noticeable effect on a web-site visitor’s willingness to take a trial. Phew.

Conversion to Paying

This was the biggie. This is the metric the change was designed to improve. And I’m really relieved to say it has. So far we’ve seen an increase of around 25% in conversions from trial to paying. When you have thousands of free trials being taken every month this makes a big difference to the bottom line. It’s still fairly early days – the change was just a couple of months ago – so I’d like to give it a few more months before making a judgement. But I’d be very surprised if in a few months time the change is no longer a very positive one.

Other Benefits

We still contact everyone that takes a free trial but doesn’t convert to ask them why. One of the benefits of the shorter trial period is that they still remember who we are, why they signed up for the trial and why they haven’t yet subscribed. Contacting someone two months after they started a trial often results in a blank look – ‘sorry, who are you again?’

For a lot of the non-subscribers the overwhelming reason is still “I didn’t get a chance to look”, and in those instances we extend the trial for a further 14 days.

It also means that we can more quickly evaluate the effectiveness of marketing campaigns. Yes, with a longer trial period we can get an indication of how it’s going (number of logins etc) and the likely return, but nothing speaks as loudly as cash in the bank.

In Summary

Website visitors don’t seem to care how long the trial period is. Make the case for trialling compelling enough, regardless of the length of trial, and they’ll take it.

With a shorter trial period, you focus the mind of the would-be customer and (assuming your software is brilliant) you get more customers. You also get quicker and more useful feedback cycles.

So, all things considered, I’m glad we made the change. The question now is whether or not I have the balls to remove the trial period completely…!

Duane Jackson - Founder

As Founder of KashFlow, Duane writes primarily about the trials and tribulations of starting and growing a successful business. Having handled KashFlow’s PR internally for so many years he can’t resist writing a bit about that too.

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  • http://www.totango.com Guy Nirpaz

    Duane, great and informative post. The good news is that your business was impacted positively by the change.

    We have ran a free-trial research and learned that 60% of SaaS companies offer 14-30 days free trial, only 2% offer 60 days trail. This doesn’t mean that it may not work for you, however, I do believe in the ‘wisdom of the cloud’.

    The blog post with all the details is here: http://www.totango.com/blog/2012/02/freemium-free-trial-and-pricing-models-in-550-saas-companies/

  • http://Www.crannistech.co.uk Darren Crannis

    Hi Duane,

    Although I was one of the original 60-day trialist, I’d made up my mind within 15 minutes – and this is true to those who I’ve recommended KashFlow too.

    I must admit some people were a little stuck in their ways with old traditional accounting practices or the common “S” product people seem to buy & never use properly – and I’m glad to say that within a 15 minute trial of KashFlow there were hooked (even if their accountants aren’t!).

    I think a 14 day SaaS trial is the way to go – focus’ the mind and ensures businesses will really commit to evaluating the product properly.

    Darren

  • http://www.mattchedit.com/Blog.aspx Matt Chatterley

    Great post Duane – thanks for sharing the results (so far) – looking forward to hearing a bit more on this in a few months time.

    Like Darren, although we had the option of the 60 day trial, we knew pretty quickly that KF was for us. The main reason we were willing to try in the first place was actually the ‘no hassle’ approach – no card details, no rememebring to cancel – just walk away if it’s not for you.

    Thats one aspect of the model which is critical in my view (removes almost all of the barriers and objections to signing up for a trial). The actual duration.. well – as you say – if someone genuinely needs a bit longer, you can always give them an extension!

  • http://www.12pay.co.uk Tom McClelland

    Very interesting Duane.

    Over the years we’ve found tens of KF prospects but very few conversions. Most never even entered their first transaction or customer or supplier.

    The theory that the 60 day trial generates a “back burner” effect rings true. The initial burst of enthusiasm dissipates before the potential client even bothers to try using the software and find out how easy it is. Placing a little time pressure on that is counter-intuitive but in fact sounds correct and likely to lead to more actual users.

  • http://www.saasmash.com Apple Jane

    There are lots of saas products posted in http://www.saasmash.com. Try to visit and see what’s the best range of time is working good. Is it the 60 days, 30 days or down to 14 days?

  • http://www.itatwork.net Daniel Harris

    Interesting – As a prospective customer, something that is preventing me from starting the trial is that I don’t think its long enough to enable us to sufficiently test the KashFlow system. I really want a 6 month trial where I can run it alongside our current systems and work out how much its going to require for us to switch systems.

  • http://www.brightpay.co.uk David S

    I think that the 60 days trial is, perhaps, too long and if prospect customers are interested in the product as they are trying it, they will convert way before the trial period is over.
    Nevertheless, 14 days is too short as a trial period since it’s not enough time to try the software, taking in consideration as well the dynamics of a business.
    I think 30 days is the right length of time to try a product.

  • http://N/a Beardy P

    I wondered why only 14 days trial, now I know. Congrats it takes nuts to do that but I agree. As a freelance procurement specialist I used to find software for clients and only had the 14 days to look at it and make my recommendations. Sorry Daniel but from experience long parrallel trials etc don’t work as they are too resource expensive & hot companies make fast decisions and implementations, but, I have to know/identify the risk issues & solutions for the client before they do it. Your approach: no card details, walk-away, no tie-ins etc. removes nearly all the usual problems and creates an immediate confidence level. But, if I cannot see it and trial it first (for free at that) I won’t recommend it, buying pigs in pokes is for suckers!

  • Harish K

    Its a good experiment :) Hope this works for you in the long run.

    Other question that may be required to be answered or may be you have answers for them already

    Q What about trial extension requests? How do you deal / plan to deal with it.
    (If trial is extended, it defeats the purpose of shorter trial period.)

  • morningtime

    I think the effect of “Free Trail” may be that people sign up for the wrong reasons. In other words: these people will never be paying customers. I’d like to see you continue your experiment by completely dropping the Free Trial. Perhaps you’ll lose some visitor->trial user conversion, BUT, I predict it will have 0 effect on final sales. Instead of wasting time on people who never plan to use your service, you can focus your time on paying customers. I think the Free Trial need is an irrational fear.

  • morningtime

    According to professor Dan Ariely (Duke University) you should never offer a “free” version of something you’re trying to sell. People rather choose a broken free product than a working paid product. In order to curb that irrationality, the only solution is to drop “free trials” completely. You can A/B test that to be sure, but my bet is Prof. Ariely got it right.

    • http://www.kashflow.com Duane Jackson

      ” People rather choose a broken free product than a working paid product.”

      That’s an argument against free-forever trials – ie, classic freemium. This is about time-limited free trials. A different kettle of marine life.

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