7-day Free Trial Experiment

Will decreasing our free trial period increase the number of new paid subscriptions?

In Progress

We know that:

It is very important for free-trial users to activate their Groove account by either adding a Shared Inbox or Knowledge Base.

Based on years of data, we know that if free-trial users don’t activate their account within 24 hours, it’s highly unlikely that they’ll convert to a paid account.

We also know that testing different free trial periods is a simple, 101 experiment for a SaaS company to run. In the past, we’ve offered 90, 30, and our current 15-day free trials. During the pandemic, we even offered a 120-day free trial.

Group 31

We believe that:

A shorter free-trial period will increase urgency and make it more likely that a trial user will activate their account, which in turn will increase our conversion rate for trial-to-paid.

We understand that we may get fewer trial signups because a shorter free trial is not as attractive as a longer trial; however, we believe that the signups that we acquire on the 7-day trial will be higher intent and more likely to convert to paid accounts.

Group 32

Therefore we will:

Decrease our free-trial period from 15 days to 7 days, for all new trial signups.

Group 47

Investment vs. Impact:

very low investment

This experiment will require messaging and visual changes on the Groove website and in the Groove app. Overall, the effort of implementation and the cost of the experiment is very low.

Once we’ve made these changes, we theoretically only have to wait seven days to assess whether our changes are working. So this experiment has the added benefit of a quick feedback loop between making a change and seeing results.

medium impact

Our Customer Lifetime Value is high, so increasing our trial-to-paid conversion rate will have a good long-term impact on the business.

Our current trial-to-paid conversion rate is 7.10%. If we can increase that conversion rate by just 1.4% to 9.5%, then we’d get 11 more paying customers each month. If we can maintain that conversion rate, it will amount to an additional 132 paid accounts each year.

In the table below, you can see how the impact compounds. With an estimated Lifetime Value of $11,520 per customer (our Average Customer Lifetime is 5 years), an additional 132 customers means that we’ll increase our revenue by more than $1.5MM over 5 years.

Conversions to Paid Accounts
Trial Customers p/mTrial-to-Paid Conv. RatePaid Customers p/mPaid Accounts p/yearAvg LifetimeAvg Rev. Per User p/mLifetime ValueRevenue Over Lifetime
4407.10%313725 years$192$11,520$4,285,440
4409.5%425045 years$192$11,520$5,806,080

Within one year, we expect to increase our ARR by $304,128 with this experiment. Given that we’re currently sitting at the $4MM ARR mark, this will mean a 7.6% increase in our ARR.

It’s also worth noting that this experiment has the added appeal of reducing time to revenue. Instead of waiting 15 days for revenue to come in, we’re only waiting seven.

Group 48

We will measure:

The following metrics as at March 2023, compared to June 2023:

  • Visitor-to-Trial
  • Trial-to-Activation
  • Trial-to-Paid
Group 49

We are right if:

Trial-to-Paid conversion increases by any margin; however, our target is an increase of 1.4%.

Group 50

If this works, then we will:

Make the 7-day free trial our standard free-trial offering.

Group 51

How this will work:

  1. Change all calls to action on the website to “7-day free trial.”
  2. Change in-app warning of days remaining.
  3. Update the email drip notifications during the trial period.

Home screen
An example of the wording changed to “7-day free trial.”
Billing screen
In-app warnings of days remaining on the free trial, with a button to sign up.
Pricing screen
Changes to the trial period on the pricing page.

Become a member to continue reading.

Members of The Imperfect Startup get premium content like this article and other radically transparent startup growth insights.
Join us — it’s free!