Subscription growth hack (by PayKickstart)
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While free trials are commonly perceived as a good idea (hence you see them everywhere), there is no obvious consensus as to how effective one-dollar trials are.
Are you trying to decide whether a one-dollar trial is a good idea? Obviously, no article will ever offer a definitive answer because it always depends on your unique circumstances (your niche, your product, your customer relationship management strategy, etc.) but her are a few things to consider:
Marketers have long been using the power of free. Human beings simply cannot resist “the idea of something for nothing”.
Dan Ariely, Professor of psychology and behavioral economics, has done an extensive study on the allure of “free” when it comes to consumer decision-making. He has found that human beings tend to overvalue “free offers” and tend to lean towards them even when it is not economically logical.
Hence free trials are more effective at generating leads. People might even opt for a free trial when the end price is higher.
Besides, people may be cautious when having to provide their payment details which is unavoidable when they need to pay – even if that is just one dollar or 99 cents – to sign up for your trial offer.
So if you switch to a one-dollar trial, you are sure to see much fewer sign-ups. This is the most obvious outcome that you are likely to expect anyways.
Free trials are not easy to convert to paid customers though, so your best bet is to test for yourself.
One of the most cited benefits of one-dollar trials is their ability to pre-validate those leads.
Instead of spreading your efforts to convert free-trial users (the majority of whom have probably signed up out of curiosity or simply because they clicked the link to your landing page), with a one-dollar trial you can focus on those leads that took some time to consider your project and are serious about moving forward.
More focus means higher efficiency and ultimately better ROI. Handing a hundred leads a week is easier than handling 1000. You need few employees, you can personalize your lead nurturing strategy better and you can really build your relationship with them and turn them into believers and brand advocates.
Committing to a paid trial your customers will be more likely to take it more seriously. While the majority of free trial users are likely to never really give your product a serious try, one-dollar trial users will feel more invested with your product, so they will start using it right away.
Switching from a free trial to a paid trial is a bold step but you can pretty easily roll back to a free model if you feel like things are going in the wrong direction.
The main thing is that you need to do some fundamental work before switching. Ahrefs has a nice FAQ section detailing their paid trial. It is a good one to use as a template:
They also have a nice guide on making the most of their paid trial
To give you even more information to consider, here are two great – albeit conflicting – studies on free trials versus one-dollar trials:
Whichever option you end up using, PayKickstart has features to help you set up your shopping card. With PayKickstart tools, you can choose to set up a free trial with or without a credit card requirement as well as a one-dollar trial.
Furthermore, PayKickstart subscription management tools will allow you to keep your customers always aware of how much and when they will be charged. The tools include:
PayKickstart offers tools to set up all kinds of payment models and lead generation methods:
In a nutshell, free trials are easier to “sell” but harder to convert to paying customers while one-dollar trials are harder to sell, yet you are likely to see more of those sign-ups to stick around and upgrade (if you do your job right).
Whichever you choose, keep in mind that the most important thing is to build a transparent funnel where your customers know when and how they are going to be charged. That is the only way to build a strong brand, protect your reputation, and decrease your chargeback and refund rates.
Your subscription relationship strategy as well as your company’s unified communications are key to your business success regardless of your specific lead generation tactics and payment models. Luckily, PayKickstart can handle your full set-up: From creating to managing your sales funnel.
Ann Smarty is the Brand Manager at Internet Marketing Ninjas, as well as co-founder of Viral Content Bee. Ann has been into Internet Marketing for over a decade, she is the former Editor-in-Chief of Search Engine Journal and contributor to prominent search and social blogs including Small Biz Trends and Mashable. Ann is also the frequent speaker at Pubcon and the host of a weekly Twitter chat #vcbuzzRead More About Ann Smarty