Newsletter #4: The Trap Named Free Trial

Newsletter #4: The Trap Named Free Trial

Hot take: Free trials kill growth.

In this newsletter, we share where free trials start to go wrong, the following problems, and alternatives to offering free trials for the wrong reasons. But first, let's look at how free trials are expected to work.

Short Intro to Free Trials

A free trial is super attractive. Potential buyers prefer to sign up for free trials because they are a very low-commitment way to test a product, and no speaking to sales is required. From the company's perspective, a free trial is attractive because if trials convert to business, it indicates that the product can sell itself. The logic that can follow is that there is no need for a sales team, and a sales team's free P&L statement is quite an exciting proposition.

So, an influx of leads comes in, and no money goes out. Perfect!

In this scenario, the very high-level buying process is something like this.

Prospect finds the product → Free trial starts → Prospect converts to paying customer independently

Of course, this is much more complex in real life, and many things need to be done right for qualified leads to find the service and the user experience so great that trial users stick with the product and become paying customers.

What we are describing here is product-led growth. The product sells itself, and this is a great way to grow. Free trials do not kill growth; they enable it in product-led growth!

Danger Zone

The danger lies when there is a mismatch between product and model to grow. There are certainly more scenarios than these, but here are the ones I have learned the hard way to avoid.

  1. A free trial is implemented to attract more customers without sales involvement: “A free trial is an easy way to sell to small companies.”
  2. Growth relies heavily on the sales team's activity. A free trial is implemented to help sales with inbound leads: “Prospects want to have free trials, so we will get more leads in.”
  3. Because the competition offers a free trial: “We don’t even get a chance as prospects test competing products first.”
I have personally been saying all these three things above. And I have been wrong.