There’s no such thing as a free trial!
It’s long been standard practice among software companies to offer a free trial. Fifteen days is the norm.
But how free is free?
Trialists need to configure the product, possibly connect to other services, invite colleagues and so on. Only then can the trial really begin—trying out features, performing sample transactions, checking connectivity, response times and support quality, and perhaps penning a quick review for peers.
Truth be told, it’s not unusual for a trial to cost two man-days of effort. That’s at least $500 in anyone’s money—not FREE, that’s for sure.
From the software company’s point of view, trials can also be expensive. Typically, an investment in paid marketing will entice users to your site. A small percentage will sign up for a trial and an even smaller number will, for the reasons stated above, truly engage in it. In fact, the cost of an “engaged trialist” can equal three months revenue from the product.
And that’s just the beginning.
The SaaS business model is front-loaded with costs. Trialists don’t know the product, maybe don’t know the features that matter most, will require mail and phone support, may need product familiarization sessions via video chat and more—all while no bill is raised.
A typical SaaS company will have spent six months’ worth of revenue to attract a new customer.
What’s the real cost? $500 to the customer and at least $500 to the supplier. That’s as much as $1,000 of FREE!
So the next time you look at a trial, be sure of only one thing: it’s anything but FREE—for either party! A free trial is not something the customer should take lightly; it costs. And a supplier who doesn’t realize the scale of a potential customer’s investment, added to his own costs, will likely join others in the SaaS graveyard.