Free Trials: Are They Worth Investing In?

Free trials are a marketing strategy implemented by businesses to achieve their goals, such as increasing sales. A more technical term from the accounting perspective is “sale on trial or approval.” In this scenario, the buyer receives the goods or employs the service for a specified period before deciding whether to pay for the item. We often encounter free trials on applications and programs. Amazon has AWS Free Tier for their cloud services. Netflix had a 30-day free trial for their streaming services. Canva provides a 30-day trial for a premium account called Canva Pro. However, is it worth it to offer free trials for your business? This article will discuss how a free trial benefits or sets you back.

Pros for Free Trials:

1. Publicity

As the selling entity, the purpose of the free trial is for the customers to know what your product or service offers. You are making your existence known to the public and attracting customers. Also, people who use your free trials are a great tool to spread the news through word of mouth. This may be a great way to have more subscribers and, eventually, loyal customers. 

From the buyer’s perspective, they invest their time in getting to know your product. This allows them to make informed decisions. Before purchasing a product, consumers can use it for free to get a feel for how it works, learn about its features, and choose whether it offers the correct value for them.

2. Avenue for Improvement

Since a free trial is like a test run, you can get feedback from your potential customers on improving the product or service. It’s like a give-and-take situation for both seller and buyer. Also, collecting customer data can help your business make decisions and predict market trends and customer behavior. 

Cons for Free Trials:

3. Costly

Every business decision is a risk, incurring cost and time, and implementing free trials is no exception. If it goes well and your profit increases, then congrats! However, it is still a risk for it being an opportunity cost. The money spent here can be used for other investments, which may be more profitable than this activity. Free trials do not guarantee that the people who avail of this are automatically turned into your customers.

4. Cheating is Possible

The existence of deceitful individuals is inevitable, and they may also target and abuse your free trial strategy. If you remember, Netflix offered a 30-day free trial before, and you can cancel it anytime before your 30 days run out. A lot of people avail of the free trials and cancel their subscriptions right before it expires. After that, they make a new profile with different information from the last one and avail of another free trial. This is one of the factors that made Netflix remove its free trials.

Conclusion

Being new to the industry may be very frustrating as there are many ways to make your product known. When considering whether to offer a free trial, always take into account if the advantages outweigh the risks mentioned above.

You might want to consider some things in implementing a free trial. It would be best to decide how long the free trial lasts before a customer pays for the service. Also, it is enticing for the customer to have special offers or incentives at the end and emphasize how much more value they would receive from the paid or premium version.

The time and money you have invested in marketing will pay off if you master the art of turning free trials into paying customers. 

Bottomline, this is only a strategy. What makes a customer stay loyal to your product is its excellent quality. Focus on how you can make the best out of your product by meeting the demands of your potential and existing customers.