How to execute a successful trial pricing strategy for your SaaS | 2024

You’re ready to launch a new SaaS product but have doubts about choosing and implementing a trial pricing strategy.

In today’s article, we’ll put those doubts to rest and explain everything you need to know about implementing a trial pricing strategy from start to finish. 

We’ll cover:

• What trial pricing is
• Why SaaS companies use it
• The different types of trial pricing strategies
• Pros and cons of trial pricing 
• How to implement a trial pricing strategy
• Why having the right tech is key for a successful implementation

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Let’s dive in!

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What is trial pricing?

Trial pricing is a strategy SaaS companies use to let new customers try their product at a low cost or free of charge during a set period. Beyond piquing potential users' interest, this approach doubles as a tool for market research and fine-tuning the product. 

Through trial pricing, companies learn about user preferences, assess how well their product fits the market, and adjust their offerings and pricing based on real feedback and authentic usage data. 

Why do SaaS companies use trial pricing?

Here are five reasons why SaaS companies choose this strategy: 

• Easing users into it: Like dipping your toes into the water before a swim, trial pricing lets users get comfortable with the product, so adoption feels like a natural next step since they’ve already experienced some value in using it. 
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• Simplifying conversions: Convincing someone already into your product is easier and cheaper than wooing potential customers with lengthy marketing and sales campaigns. Show, don’t tell.
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• Spreading the word: Happy trial users will likely talk about their positive experiences, providing free and credible marketing that can reach potential customers more effectively than traditional marketing efforts. 
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• Attracting high-value customers: By analyzing how different users engage with the trial, you can identify those who find the most value in your product and tailor your marketing strategy to attract similar high-value customers.
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• Accelerating feedback loops: The immediate and direct feedback from trial users allows you to quickly spot and address issues and adjust to better meet user needs. Trials help keep the product relevant for those who’ll actually use it. 
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The most popular trial pricing strategies

There isn’t just one trial pricing strategy. Let’s take a quick look at five of the most popular ones, how they work, and why you should consider using them. 

Free trial with a credit card

This approach requires potential users to provide a credit card number when signing up for a free trial. This means you can automatically begin billing once the product trial period concludes without requiring further action from the user. 

Why should you use it?

It's ideal for a seamless transition from trial to paid subscription, minimizing drop-offs at the conversion point. However, be mindful that the need for credit card details upfront may prevent some potential users from signing up.

Free trial without a credit card

This version of a free trial does not require credit card information upon sign-up, allowing users to start using your product with less initial commitment.

Why should you use it?

Removing the credit card requirement lowers the barrier to entry, encouraging more sign-ups and expanding your potential user base. The challenge lies in then converting these users into paying customers, which requires compelling follow-up communication.

Free trial with freemium plans and a usage limit

This means offering a permanent free plan with basic features alongside the trial of your full product. This plan comes with limitations, such as reduced features, storage, or usage caps, that can encourage users to upgrade to paid plans if they find your SaaS product useful. 

Why should you use it?

It attracts users by allowing continuous product use at no cost, with the opportunity to convert them to paid plans as their needs grow. The risk is users remain on the free plan without upgrading.

This last point is especially important if your SaaS relies on API calls that you must pay. You want to be extra careful and make sure that the costs of offering a freemium plan to attract users don’t end up neutralizing the revenue that actual paying subscribers bring. 

Free trial with premium plans

This strategy provides a free trial that includes access to premium features for a limited time. After the trial, users revert to a more basic plan but have the option to upgrade to retain the premium features.

Why should you use it?

It's a powerful way to showcase your product’s full capabilities while making the premium features indispensable to the user. This can increase the likelihood of upgrades to paid subscriptions.

Paid trial

A paid trial charges users a nominal fee to access the solution for a trial period. This fee is typically lower than the standard subscription price and can be applied to different lengths of trial periods.

Why should you use it?

This method filters for highly interested users, as they're more likely to be invested in trying and potentially adopting the product. Offering a paid trial can also extend the length of the trial period, giving users more time to experience the value of your product. 

The challenge is convincing users to pay upfront for a product they haven't used yet. Crystal clear documentation and onboarding material are crucial to convey the value of your solution before customers get hands-on with it. 

Pros and cons of trial pricing

Let’s break down the pros and cons to see if the trial pricing model fits into your growth strategy:

Pros

• Hands-on experience: Offering a free trial lets potential customers get a feel for your product, increasing their trust and confidence in its ability to meet their needs. It's about showing, not telling.
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• Higher conversion: A well-crafted trial experience can be the nudge customers need to convert from curious onlookers to loyal users, providing a clear pathway from trial to subscription.
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• Valuable feedback: Trials are a goldmine for user feedback, offering insights into how real people use and perceive your product. This feedback is crucial for iterative development, ensuring your product fits your target customer needs.

Cons

• Attracting tire-kickers: Free trials can attract people who never intend to pay for your product. These users benefit from your offer but contribute little to your business growth. Going with a free trial with a credit card strategy is one way of preventing this. 
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• Delayed revenue: Offering your product for free means you won’t see any revenue from these users during the trial period, which impacts cash flow. This wouldn’t be the case if you opt for a paid trial strategy, but it does come with its own set of challenges. 
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• Risk of churn: If customers don’t see the value in your product by the end of the trial, they may not sign up for a paid plan, leading to high churn rates. It’s vital to showcase your product’s value early and often. Freemium trials are a viable workaround for this problem.

How to implement a successful trial pricing strategy

Let's take a look at eight implementation tips you should follow if you want to make your implementation journey easier. 

#1 Identify the right model

The first step is determining which trial model best suits your SaaS product. The most common options are free trials with or without a credit card, freemium models with usage limits, and paid trials. 

Whichever you choose, you should always consider the type of SaaS product you’re offering, who your target customers are, and your business goals. 

For instance, free trials without a credit card may attract more signups but have lower conversion rates, while paid trials demonstrate higher customer commitment but not everyone might want to pay upfront. 

Weigh out the pros and cons according to the factors mentioned above before committing to a strategy. 

#2 Determine the trial length

This is a sort of balancing act — you want to give potential customers enough time to experience your product’s core value, but not so long that freeloaders take advantage. 

Most SaaS companies find that 14 to 30 days is an ideal range, but you can experiment to find what works for your particular offering. Shorter trials around 2 weeks are good for simple, low-cost products, while complex solutions may require 3 to 4 weeks for proper evaluation.

At the end of the day, it’s all about how you can reduce your solution’s time-to-value and make your users click with your product within a reasonable timeframe. 

#3 Define clear goals

Establish specific objectives for your trial strategy upfront, such as increasing signups by 25% or improving conversion rates by 10%. 

These concrete targets will help determine the model, length, and marketing approach and provide a benchmark to measure success. You’ll want to monitor your KPIs and see how users interact with your solution to gauge if you’re getting there or not.

#4 Know your audience

Understanding who your potential customers are is crucial for tailoring your trial experience to their needs. Create user personas to capture the typical characteristics, pain points, and goals of your target audience. 

For example, suppose your SaaS product is a project management tool. In that case, your audience might include project managers in small to medium enterprises who are looking for ways to streamline their workflows.

By knowing this, you can highlight features like task automation or collaborative spaces during the trial to directly address their needs. 

Remember: Personalizing the trial experience in this way is a great way of increasing the likelihood of conversion.

#5 Provide real value

For the best results, ensure trial users can experience the core value of your SaaS product. Give them full access to your key features, not just a superficial glimpse. The more they derive real benefits during the trial, the more likely they are to convert to paying customers. 

You want them hooked on how your product solves their problems or improves their workflows. All previous recommendations apply, so you can tweak this according to your specific needs, too! 

#6 Make sign-up quick and easy

The fewer barriers to entry, the better. A lengthy or complicated sign-up process can deter potential users before they've even had a chance to try your product. Aim for a sign-up process that requires minimal steps and information. 

For instance, Slack’s sign-up process is a good example to emulate; it requires only an email address to get started, making it almost frictionless. 

Remember: The goal is to get users into your product and experience its value as quickly as possible.

#7 Communicate effectively

Effective communication throughout the trial period is key to conversion. This involves not just sending reminders about the trial expiration, but also providing resources on how to get the most out of the product. 

Take Dropbox, for instance: During their trial, they send out tips on features users might not have discovered yet. 

Tailor your communication strategy to educate users about your product's benefits and features, offer help, and guide them toward conversion. This can include targeted emails, in-app messages, and access to customer support or a knowledge base.

#8 Measure and evaluate

Closely monitor how your trial pricing strategy performs. Track key metrics like signup rates, feature usage, conversion percentages, and customer feedback. Look at what's working and not working to make changes and optimize the trial experience. 

With regular evaluation and adaptation, you can achieve the goals you set out and gain valuable insights to fuel continued growth. 

However, don’t be afraid to switch strategies altogether if you aren’t getting what you need out of a particular trial pricing strategy. As long as you communicate changes with transparency, you shouldn’t run into any issues that could harm your customer relationships. 

Leveraging technology to streamline your trial pricing strategy

Implementing a successful trial pricing strategy requires more than just an attractive offer; it needs a solid backbone of technology to manage it with as little friction as possible. 

This is where a sophisticated billing system like Orb comes into play, streamlining the management and customization of trial pricing strategies with finesse. Orb is a billing management platform designed specifically for SaaS companies that aim to grow through strategic pricing and monetization. 

Orb simplifies the intricate details of managing trial pricing strategies, allowing you to easily adapt offers, track usage, and convert trial users into paying customers — all without writing an extra line of billing code.

Some Orb features that can help when setting your trial pricing strategy:

• Seamless management and customization: Orb’s platform lets you tweak your trial offer with precision, tailoring it to fit your chosen strategy. Whether you adjust the trial length or set usage limits, Orb makes these changes straightforward and practical.

• Usage-based insights: With Orb, you get detailed reports on your customers’ usage patterns. This information is vital for refining your product and pricing strategy, turning metadata into actionable insights that drive growth.

• Accurate and clear billing: One of Orb’s standout features is its ability to provide clear and precise invoicing, even down to fractions of a cent. This accuracy guarantees that, when trial users convert to paying customers, there’s no billing shock; only transparency.

• Control over price changes: Are you planning to roll out new pricing? Orb supports plan versioning, allowing you to manage and schedule price changes with total control so that updates are always smooth and customer-centric.

Next steps

We’ve shared our deepest insights on the subject of trial pricing strategies, and now it’s your turn to make the call. 

Will you go the hard route and set up your own in-house billing system? Or are you ready to let Orb handle billing for you, so you can focus on growing your business?

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Check out this demo and learn how Orb can solve billing for you.