How you can decide whether a free trial or freemium offer is the right approach for your SaaS business FAST (without losing millions)

1. FREE TRIAL OR
FREEMIUM?
How to decide on the right approach for
your B2B SaaS business.

2. Both models help your potential
customer evaluate your product but...

3. Why use one model over the
other?!?

4. Free Trial Argument

5. First off, Free Trial Definition
A free trial is a customer acquisition model
that provides a partial or complete product
to prospects free of charge for a limited
time. Typically, a free trial runs for 14 or 30
days.

6. Two Types of Free Trials
(one you like & one you probably don’t like)

7. Meet
Opt-In & Opt-Out Free Trials

8. The big difference between the two...
Opt-In Free Trials (the one you
like)
❏ No credit card required
❏ You need to sign up at the
end of the trial to use the
product
Opt-Out Free Trials (the one you
don’t like)
❏ There is a pay wall that
requires you to give your
credit card details before you
see the trial
❏ If you don’t like the product,
you need to “opt-out”
❏ Chances are you’ll probably
forget to cancel your
subscription… (or am I the only
one)

9. Opt-In Free Trial Perks
(the option you already like)

10. #1 Little to no friction = more signups (YAY)

11. #2 You add to the trust factor.

12. #3 You avoid accidental free trial-to paid
conversions (meaning less refunds and
angry users).

13. “Free trials which don’t require
credit card information show a
higher end-to-end conversion
percentage compared to their
counterparts.”
-HT: Totango’s report

14. That means more $$$ in the bank.
#winning

15. The Golden Rule of Free Trials
(aka don’t do opt-out free trials)

16. Here’s why you shouldn’t use an opt-out model:
1. It’s hurting your brand.
2. It most likely is costing you a lot of potential
revenue - do the math for yourself here.
3. Even a $1 free trial is a really bad idea.
4. People don’t like this option so your conversion
rate will suffer.

17. Still not convinced?

18. Luckily, venture capitalist
Christopher Janz dealt with a lot of
stubborn folks and put together a
great model for you to check
whether an opt-in or opt-out model
will work best for your business.
See for yourself

19. Wait, where does freemium fit into the mix?

20. Good question ;)

21. Freemium Argument

22. Freemium Definition
Freemium is a customer acquisition model
that provides access to part of a software
product to prospects free of charge,
without a time limit.

23. TL;DR > Essentially the same as a free trial
but no time limit.

24. Freemium is like a Samurai sword:
“unless you’re a master at using it,
you can cut your arm off.”
- Rob Walling

25. Freemium Perks
(for those that get it right and keep their arm)

26. #1 Powerful Acquisition Strategy

27. #2 You can test upgrade levers at scale.

28. #3 You can turn free users into a consistent
referral source.

29. This all sounds amazing but...

30. Freemium usually only works when your
organization is up against a few factors such
as...

31. #1 A large addressable market (ie people
who listen to music)

32. #2 Low costs to service each new user.

33. #3 It’s easy for users to start with your
product and get value out of it.

34. I hate to be real with you but...

35. Most times the freemium model just doesn’t
work with B2B SaaS companies.

36. After all...

37. Giving away your product for free without
having people upgrade isn’t a robust go-to-
market strategy.

38. You’re not building a charity,
you’re building a for-profit business.
- Lincoln Murphy

39. If you still think freemium might work, we’ve
got lots of questions for you.

40. Questions to ask yourself when considering freemium
1. How much will it cost to sustain a large segment of free customers?
Is a freemium model scalable for your business?
2. Can we provide enough value for users to realize product benefits but still
limit value to entice them to pay for a subscription?
3. How difficult is it to get started with the product? Does it require technical
integration and broader organizational approval?
4. How will we nurture and prioritize freemium users that are ready
to purchase?
5. Are we attracting the right kind of customer (i.e., a customer in our target
market with a real need, an urgency to purchase and a desire to expand
the subscription)?

41. When to choose a free trial or
freemium model?

42. Here’s a fancy chart from the CEO of
Aptrinsic (smart man)

45. Now, think to yourself…

46. What well-known companies fit into each
box?

48. Starting to make some sense now?

49. Now, let’s make it a little more
complicated, shall we?
(sorry)

50. “Just because a product is
considered “easy-to-use” and
inexpensive does not mean you
HAVE TO HAVE FREEMIUM”
-Yours truly

51. Why?

52. Complexity of a product is contextual.

53. Give two people the same accounting software
Sam the concrete guy Miss Bitcoin

54. One finds it easy & the other doesn’t know
how to login to their account.

55. You NEED to know your audience and
constantly do user tests with them.

56. Maybe even drunk user testing...

57. In this case, sometimes it makes sense to
not have a free trial or freemium offer.

58. But, when should you NOT consider a free
trial or freemium model?

59. #1 If your entire company follows a top-
down marketing approach.

60. (ie you’re targeting the VPs, C-level, and
good ole Mark Zuck)

61. They are not “doers” in their organization.

62. #2 Your product is a complex and your
target audience requires some “hand
holding”

63. #3 Your product is very expensive and would
max out most company credit cards each
month.

64. Hence, avoid free trials and freemium
models when...

66. Used for dramatic effect… Woah!

67. The Conclusion

68. Free trials and freemium models work if
you’re marketing to “doers”

69. Demos work great if you’re going after
business owners & execs and follow a top-
down marketing approach.

70. Free trials and freemium models foster a
bottom-up marketing approach.

71. But, can you use a hybrid strategy?

72. Why yes you can!

73. But, that’s for another slide deck.
(Spoiler alert)

74. But, if you still
have
questions...

75. You should
probably chat
with someone
weird (like me)
who’s generated
over 130,000 free
trial users to see
what option is
best for you (no
strings attached).
Book 15-minute meeting