Trial Version: Free or Almost Free

In this article, we discuss trial versions for paid subscriptions. We’ll examine the benefits of trial versions, the different presentation options, and which option offers the best performance.🚀

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1. When to Offer Trial Versions

A trial version is a way to acquire new subscribers. It’s especially useful during the launch phase when there are no reviews or opinions published online yet. It allows prospects to experience the service firsthand without any commitment or financial risk.

It’s only appropriate to offer a trial version if the service is intended for the long term, such as antivirus software for continuous protection.

However, if the core value of the service can be delivered through a one-time purchase, users may perceive the trial as a way to get the service for free.

Therefore, it’s important to evaluate the marginal cost of a subscription before offering a trial version. Ensure that the trial involves minimal operational costs or resources to deliver. If the primary purpose is access to a web service, such as video streaming, the costs remain low.

Even if the business is mature and the pressure to acquire new subscribers decreases, continuing to offer trial versions may still be beneficial, particularly to remain competitive.

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2. The Different Types of Trial Versions

There are several types of trial versions; it’s the payment process that really differentiates them.

a. The Free Version

This is a full, free subscription for the usual duration. These versions are common in the industry, though often confidential, and are typically offered to journalists and influencers.

They are not intended to be converted into a paid subscription.

b. Limited-Time Free Trial

This is a full-featured, free subscription, but with a very limited number of subscription days, for example, two weeks. At the end of the trial period, the user is prompted to “renew.” In reality, they will be making an initial purchase through a renewal experience.

c. OEM Free Trial

An OEM (Original Equipment Manufacturer) product is a full-featured, free subscription for the usual duration offered by a third party. For example, Windows is pre-installed on PCs and offered by the manufacturer. No monetization is expected.

d. OEM Limited Trial

This is a full-featured, short-term subscription offered by a third party. Very common in the software industry, this includes all software pre-installed on PCs and free for the first month. The user has the option to convert their free software into a paid subscription.

e. The opt-out trial version

This is a full-featured, free subscription for a limited time, which requires a payment method to activate. Unlike the limited-time free trial version, conversion to a paid subscription will be automatic unless the user cancels it beforehand.

Technically, it’s similar to a deferred payment purchase. Canceling the purchase results in a zero refund since the amount has not yet been paid.

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3. What is the best option?

No option is better, since they all meet a different need. However, we can distinguish between free and paid conversion.

As mentioned at the beginning of the article, the trial version is an acquisition tool. Thus, the goal is to determine which trial version offers the best performance in acquiring new subscribers.

a. The free trial version

This version requires neither a payment method nor any commitment from the customer. Delivery will be optimal and customer satisfaction will be highest. However, conversion will be minimal since it requires user effort. This is also the most expensive version because the risk of abuse will be higher.

b. Opt-out trial version

This version requires a payment method, and the customer knows they might forget to unsubscribe. The user must trust them enough to provide this credit card information. Delivery will be much lower, and customer satisfaction will be lowest.

On the other hand, conversion will be optimal since it benefits from user passivity: forgetting to unsubscribe and automatic billing.

c. Which one should you choose?

It depends on the KPI that defines success. If you want to widely distribute the offer to raise awareness, then the trial version is the best option.

If success is measured by the number of new subscribers, then you should focus on the number of activations and the conversion rate.

Indeed, opt-out versions have a lower distribution rate but a much higher conversion rate. Now, the number of new subscribers is defined as:

Number of subscribers = number of activated trial subscriptions x Conversion rate

Let’s take, for example, the case where the opt-out version decreases delivery by a factor of 10 but increases conversion by a factor of 15. We obtain:

• Number of subscribers (trial) = number of activations x Conversion rate

Vs.

• Number of subscribers (opt-out) = (number of activations / 10) x (Conversion rate x 15)
• Number of subscribers (opt-out) = (number of activations x Conversion rate) x 1.5

In this case, the opt-out version generates more new subscribers, albeit with potentially lower satisfaction. It would be wise to conduct A/B tests to determine the impact on activation and conversion rates to make an informed decision.

Note: Subscriber satisfaction plays a crucial role in the retention rate in subsequent years.

A CLV calculation will tell the best option.

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👉 Key Takeaways 👈

The second-year retention rate for subscribers acquired through opt-outs is generally lower than average. Indeed, subscribers who become subscribers through carelessness are more likely to unsubscribe the following year. ⚠️

Trials are used to leverage retention techniques to acquire new subscribers. The user interface must be tailored to the needs of the user.

Opt-out trials are generally the best option for increasing the number of new subscribers.