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Transform Free Trial Users into Loyal Customers with These 9 Proven Strategies

Last updated on Tue Dec 24 2024


As the tech world continues to evolve and get more competitive, especially in the SaaS industry, the fight to acquire more customers becomes even more intense. This is why knowing how to turn free users of your software into paying customers is crucial.

If you are ready to take the big step into knowing how to convert your free trial users into paying customers, then you will want to pay rapt attention to this article. This article will provide you with the right tools and tactics to use in order to properly optimize your free-to-paid conversion strategy for customer growth.

While acquiring new paid users can be a hassle, it is definitely not a mystery. With the right strategies, optimizing your free-to-paid conversion rate will be a lever your business can pull at any time to generate revenue growth. But first, you need to truly understand what a free trial conversion rate is.

What Is a Free Trial Conversion Rate?

Free Trial Conversion Rate

The Free Trial Conversion Rate is simply the proportion of free users that get turned into paid users of your product. To calculate it:

  • Divide the number of free users that converted to a paid plan in a given period by the total number of free trials registered in the same period.

  • Multiply the answer by 100 to calculate the percentage.

For instance, imagine your B2B company nets 25 paid users from 250 free trials during the month of June. To calculate the free trial conversion rate for that period:

Free Trial Rate = (25/250) * 100

FTR = 0.1 x 100 = 10%.

The conversion rate is 10%. But take a look at that—does 10% feel like a decent free-to-paid conversion rate? This brings us to our next point of discourse.

What Is a Good Free Trial Conversion Rate?

This question is not a simple yes-or-no answer because it depends on various factors. These factors could include:

  • Your target market

  • Business model

For instance, companies targeting SMBs will have different benchmarks than those focused on enterprise clients.

Key Factors Affecting Your Success

Let us take a look at the factors that could affect your success:

Free Trial vs. Freemium Model

Free trials generally give users access to a free account that provides limited-time access—usually a few weeks to a month. Your business goal is to show how valuable your product is to them before their trial expires to get them to purchase and become paid customers.

Meanwhile, users of a freemium product get access to a pared-down version. Companies create these models to allow users to experience a product’s value. They incentivize users to become paid customers by reserving certain features for paid users alone.

So which is better for a good free-to-paid conversion? Free trials lead to higher conversion rates than freemium models because a time-limited trial creates urgency, driving free trial users to buy.

High vs. Low Annual Contract Value (ACV)

ACV is the annual revenue that each of your customer contracts generates. Higher ACVs often result in lower conversion rates due to procurement friction because the more expensive your software is, the more friction it adds to the procurement process. Easing this process increases conversions.

Sales-Assisted vs. Self-Service

Sales reps assisting free trial users can contribute positively to conversion rates. However, this depends on the product and user needs.

Opt-In vs. Opt-Out Free Trials

Opt-in free trials usually do not require a user to put in card info at account setup, while opt-out models request it right from the start.

Despite opt-in free trials’ easy access to accounts, evidence shows that opt-out models convert better by requiring payment information upfront.

Common Reasons for Low Free Trial Conversion Rates

Common Reasons for Low Free Trial Conversion Rates

If, after trying so hard all these years, you still seem to be getting a low free trial conversion rate, the first thing you need to know is this: It is not a disease! Rather than think of it as a disease, see it as a symptom that shows you there is an underlying problem. Some of those problems can include:

Value Gaps

Users may not understand your product’s value. And sometimes, even after they do understand, your product may not live up to its value expectation. That gap, where a customer’s perceived value of your product is different from what they experience, is referred to as a value gap.

Value gaps are very lethal to your conversion rate. Hence, you need to identify these gaps by surveying users, and then better align your offering with their needs.

Friction

Unnecessary obstacles in the user journey can deter engagement and reduce conversion rates. Removing these obstacles is necessary to enhance your users’ onboarding experience and boost your free-to-paid conversion rates.

Put yourself in your users’ shoes and go through the onboarding process to understand what could be causing friction for your customers so that you can also figure out what needs to be fixed.

Giving Away Too Much for Free

Overly generous trials can reduce the urgency of paying for your product. Shorten your trial periods to create more motivation for your users to upgrade. Do not give away too much of your product for free!

Asking for the Buy Too Early

Just as there is danger in prolonging your free trials or making them too long, there are also dangers in asking too early. It could lead to value gaps, hence the timing matters.

Ensure that your users have experienced enough value from your product before requesting an upgrade. Focus on meeting their needs first.

9 Strategies To Convert Free Trial Users Into Paying Customers

We have looked at what a good free-to-paid conversion rate is, the factors for success, and the reasons for low conversion rates. Now, we will explore strategies you could use to guide your users to the treasure in your product to increase the conversion rate. Let’s dive in!

  1. Identify and Remove Unnecessary Friction

    Review your onboarding process for obstacles. A little friction can make your product sticky in a good way, but too much friction is a no-no as it can frustrate users and increase their time to value. Use user data to refine their journey and eliminate unnecessary steps.

  2. Personalize the User Experience

    People download apps for different reasons. Tailoring the product experience to help users achieve their goals will go a long way in converting them into paid customers. Personalized content increases user engagement, helps them arrive at the value faster, and justifies paying for your product.

  3. Cater to Different Learning Styles

    Different users mean different learning styles. Catering to your users’ learning styles helps them reach their time to value in your product faster. Offer options like guided tours and checklists to address diverse user preferences.

  4. Add a Human Touch

    Do not automate everything. Instead, directly engage with your users through personalized customer interactions to build satisfaction and loyalty. The goal is to spark conversation and be genuinely helpful.

  5. Send Behavior-Based Onboarding Emails

    Use targeted emails based on user actions to guide their journey and encourage upgrades. You do not want to be all in their faces or make them feel like they are being told what to do.

  6. Contextualize Upgrade Prompts

    Your product upgrade goal is to get users to upgrade based on what they’re really interested in. Use prompts to highlight the benefits of upgrading. Help them imagine what their lives will be like while using your product.

  7. Ask for Payment Information Upfront

    While controversial, requesting payment details upfront can filter out less serious users, which can ultimately lead to an increase in conversion rates among committed trial users.

  8. Remind Users About Trial End Dates

    People are usually busy and can easily forget that their free trial is ending. Timely reminders about trial expirations can prompt upgrades. If needed, include personalized assistance to guide them through the process.

  9. Extend Their Free Trial

    Just as we said earlier, people are busy and may need more time to fully experience your product. If users need more time, consider extending the trial while addressing their concerns.

Conclusion

Converting free trial users into paying customers requires a thorough understanding of their needs. With the help of these strategies, your business can improve free-to-paid conversion rates and build lasting relationships with users.