Are you feeling bummed because your free trial conversion rates aren’t soaring like other SaaS rockstars?
Well, here’s the thing…
Don’t expect your SaaS free trial conversion rate to match another software’s.
- Slack converts 30% of its freemium users into paid subscribers.
- Netflix’s trial conversion rate is 93%.
- Vimeo found that more than 60% of its free trials are converted.
When it comes to conversions from free trials, the same numbers may tell *entirely different* stories.
For one, your conversion rate heavily depends on your SaaS trial model. Simply comparing without considering the trial structure will lead to misleading conclusions.
In this post, we’ll truly understand SaaS free trial conversion rates. We’ll look at the different types of trials, benchmark reports, and conversion metrics you should be tracking.
To get started, let’s cover some basic concepts.
Contents
Understanding free trial conversion rates
Your free trial conversion rate is the percentage of users who become paying customers after trying your product or service for free.
A high conversion rate proves that your free trial compelled web visitors to try your offering and converted them into paying customers.
Likewise, a low conversion rate may indicate a poor product-market fit, sub-optimal messaging, or unoptimized trial user experience.
Formula for calculating free trial conversion rates:
The formula for calculating free trial conversion rates is relatively straightforward.
It is calculated by dividing the number of users who converted into paying customers by the total number of users who started the free trial. Multiply the result by 100 to express it as a percentage.
Mathematically, it looks like this:
Free Trial Conversion Rate = (Number of Paying Customers / Number of Trial Users) * 100
Let’s say you had 500 trial users, and 100 of them converted into paying customers in the end.
Then your SaaS free trial conversion rate would be (100 / 500) * 100 = 20%. Thus, 20% of trial users became paying customers after signing up for a free trial.
Why is it important to track and understand your conversion rate?
Tracking your free trial conversion rate is crucial for understanding your SaaS business’s performance.
Here are 3 important reasons why:
- It gives you an idea of how well your SaaS product resonates with potential customers. It can provide insight into whether your product is meeting customer needs, what your customer’s pain points or even the areas of your product that need improvement.
- It impacts your business’s bottom line. And it can help you identify bottlenecks in the customer journey, such as complicated registration processes or confusing onboarding.
- With a clear understanding of this number, subscription businesses can make rational decisions on pricing, product development, and marketing strategies. A classic example is Netflix removing its free trial option.
The 3 different types of SaaS free trials
As mentioned earlier, the type of your SaaS trial models greatly affects your trial conversion rates.
Let’s look at them closer:
- Freemium
- Limited free trial – Opt-in free trial or Opt-out free trial
- Reverse trial
Freemium
The freemium model is one of the most popular types of free trials in the SaaS industry.
This model involves offering a basic forever free version with limited functionality. Users can access and use the product indefinitely without a time limit.
However, to unlock all premium features and added functionality, free users are required to upgrade their plan.
It’s an excellent way to attract a large number of users. The downside is that you also risk attracting freeloaders with NO plans to buy. That’s why the ideal freemium conversion rate is lower, 2% – 5%.
A big SaaS company that employs this trial model is Mailchimp.
As a free user, you’ll have an email send limit of 1,000.
You’ll need to upgrade to their paid plans if you need more. Also, premium features like A/B testing and email scheduling are locked for free users. Some other restricted features include:
- Pre-built email templates
- Reporting and analytics
- Customer support
Do you need to create automated customer journeys for your Mailchimp subscribers? Try Encharge’s integration with Mailchimp. Encharge is the marketing automation platform to help you deliver a personalized experience for your Mailchimp contacts.
Limited free trial
A limited free trial model gives users a time-limited trial period to explore the full range of features and functionalities offered by the SaaS product.
The timeframe varies in duration, but the common ones are 7 days, 14 days, 21 days, or 30 days.
An example of a SaaS that gives a free 30-day trial is Balsamiq Cloud, a tool used for wireframing. Users have unrestricted access to the complete set of features during the time limit.
And here’s the trial expiration email they sent me after trying them the tool for 30 days.
It’s worth noting that there are two types of limited free trials.
Opt-in free trial
In opt-in free trials, visitors who signed up for the product share their registration credentials alone. No credit card is required. This model is best for those who want to test the capabilities of software yet maintain control over the buying decision.
A perfect example here is Encharge which offers a 14-day free trial (all features included) without requiring you to enter payment information.
And here’s what you’ll see if you still log in with an expired account.
Opt-out free trial
In an opt-out free trial, users who sign up for a free trial are also required to key in their credit card information.
Users are informed that the trial will convert to a paid subscription unless they proactively cancel or “opt out” before the trial period ends.
This trial type usually filters out leads that aren’t likely to commit to paid plans. In short, it’s a good model to turn away unqualified leads early on.
When asking for payment information upfront, users are more likely to explore the product and take the trial more seriously.
Take Semrush as an example. Registering for a free trial doesn’t end with you sharing your email address. They’ll ask for your billing information too.
Reverse trial
The reverse trial is a model that combines elements of both the freemium and free trial models.
With this model, users gain immediate access to the full range of paid features and functionalities as soon as they sign up for the trial.
However, once the trial period expires, users are transitioned back into freemium mode once the trial period expires, where certain features or capabilities are restricted. It’ll only get unlocked again once they upgrade to a paid subscription.
This model gives users a taste of the product’s premium offerings from the get-go, so they’ll pine for it when it’s no longer accessible.
Avokaado is a SaaS product that uses this hybrid approach. Here’s the email they sent when my free trial of full access was about to expire.
Other factors that influence SaaS free trial conversion rates
Besides the SaaS trial model, the following can also affect your trial conversion rates:
Length of the trial
Of course, this is only true for SaaS without the freemium plan. Longer trial durations (like 21-30 days) give users more time to explore the product, understand its value, and decide.
But you can also benefit from shorter trial periods that make people feel pressed for time, prompting them to take action before the trial expires.
This intranet software offers a 30-day free trial.
While Shopify, the e-commerce platform, does offer only three days.
You might be asking, what is the perfect trial period? As with most other things, it depends, and it’s best to experiment and find the answer for your business. That said, as we have explored in previous posts — longer time period doesn’t lead to an increase in trial conversion, so it’s best to start with a 7-day or 14-day trial (or even a shorter period if the business model allows it). If you need more inspiration, check out our post on the perfect trial length, where we asked 18 SaaS experts to share their thoughts on the matter.
Onboarding experience
A well-designed and executed onboarding process coupled with a positive user experience can significantly increase conversion rates. 86% of SaaS users are more likely to stay if they have a good onboarding experience and receive continuous training.
Here are some factors that can influence your onboarding experience:
- Pricing perception. The pricing structure, affordability, and perceived value of the SaaS product influence trial users’ decision to convert. If your product is expensive, users may hesitate to convert, even if they find it valuable. If your product is too cheap, users may question its quality. So find the sweet spot!
- Customer support and success. Customer support, like chatbots and live chats, is another factor that influences SaaS free trial conversion rates. During the free trial period, users might encounter problems with the software. A responsive and helpful customer support team can help users resolve them quickly, and it sometimes becomes their deciding factor.
- Communication during the trial period. You can always stand out from your competitors via a personal approach. Regular communication during the trial period (and beyond!), including product updates, reminders, and personalized engagement, can maintain users’ interest and encourage conversions. Improving your communication during the trial is one of the lesser-known strategies SaaS marketers use to boost trial conversions.
Metrics for assessing free trial conversion rates
Here are the 4 essential conversion metrics for assessing your SaaS free trial conversion rates.
Metric 1: Visitor to Free Trial
The first metric to assess your free trial conversion rate is the percentage of web visitors who sign up for a free trial. This metric tells you how effectively your marketing efforts drive visitors to your website and convince them to try your product.
Low conversion rates here mean you may need to optimize your website or marketing strategy to attract more potential customers. But a high visitor-to-free trial conversion rate indicates that your messaging, value proposition, and user experience are compelling enough to drive users to take the first step in trying your SaaS product.
Metric 2: Free Trial to Paid
If you’ve successfully measured the number of attracted visitors to sign up for your free trial, the next metric to monitor is the conversion rate from those free trial users to paid customers. Yes, this metric is the percentage of trial users who upgrade into paying customers calculated at the end of the trial period. And this reflects the effectiveness of your trial onboarding process.
A high conversion rate for this metric means your product delivers value to your customers. If the rate is low, it may show that either your onboarding needs to be optimized, your product didn’t meet expectations, or the value that you were offering wasn’t properly communicated.
Metric 3: Visitor to Freemium
The third metric is the conversion rate of a visitor to freemium. If you offer a free version of your platform, it’s important to track the percentage of visitors who transition from the web visitor to the freemium version. It provides insights into the appeal of your freemium offering and its ability to capture users’ interest after the trial period.
As the conversion rate increases, users are more inclined to stay and upgrade to the premium version. You may need to revisit your freemium offerings if you notice a low conversion rate.
Metric 4: Freemium to Paid
You want to track the percentage of freemium users who upgrade to a paid version. It reflects the effectiveness of your freemium model in nurturing user engagement and enticing users to unlock additional features or capabilities through a paid offering.
A high rate indicates that your free tier is an outstanding value proposition, and the premium features and benefits are worth the upgrade for users.
Industry benchmarks on free trial conversion rates
Industry benchmarks provide a clear picture of where your company stands against your peers. As we already discussed, each SaaS is different, and this is not an end-and-be-all assessment, but you can use it as a guiding point to understand where you need to focus.
In this section, we compiled free trial conversion benchmarks from
Here are the critical insights.
Openview product benchmarks
Total responses to the survey: 458
This report follows the path called “the new user journey” — from discovery all the way to scaling.
| Free trial | Freemium | |
|---|---|---|
| Visitor to signup rate | 3% | 6% |
| Sign up to Paid Conversion Rate | 17% | 5% |
FirstPageSage SaaS Free Trial Conversion Rate by Free Trial Type
Total dataset: 86 SaaS companies — of which 71% are B2B and 29% are B2C
This is data from the agency for widely used for free trial conversion metrics. It’s further categorized into three different SaaS trial models: Free Trial Opt-In, Free Trial Opt-Out, and Freemium.
Note: We only listed those from free traffic sources.
| Free trial | Freemium | ||
| Opt-in | Opt-out | ||
| Visitor to free trial | 8.5% | 2.5% | |
| Free trial to paid | 18.2% | 48.8% | |
| Visitor to freemium | 13.3% | ||
| Freemium to paid | 2.6% | ||
That’s a high conversion rate for the free trial to paid for the opt-out model, right? Remember, it’s only from the 2.5% of visitors who sign up for a trial.
Makduku small sample and quick analysis report
Data representative: 9 SaaS companies
This report rather categorizes by the number of days it takes to convert, and it looks like this:
| Company | Free Trial Length | Days until 80% of free trial customers convert | % Customers converting during free trial |
|---|---|---|---|
| A | Freemium | 130 | N/a |
| B | 30 | 46 | 47% |
| C | 30 | 45 | 43% |
| D | 14 | 36 | 40% |
| E | 14 | 40 | 37% |
| F | 14 | 21 | 52% |
| G | Freemium | 43 | N/a |
| H | 30 | 33 | 77% |
| I | 30 | 34 | 74% |
| Trimmean | 40 | 51% |
And one conclusion is that it takes around 40 days for 80% of SaaS conversions to happen.
Tips for improving free trial conversion metrics
Here are some tips to help you improve your free trial conversion metrics and turn potential customers into paying users.
1. Publish informative and engaging content that captures and educates potential users about the value and benefits of your SaaS product.
2. Display testimonials, reviews, and ratings from satisfied customers on your website or within the product to build trust and credibility, influencing potential conversions.
4. Ensure that the sign-up process for your free trial is as easy as possible. The fewer steps there are, the better. You should also ensure that all the information you require from potential customers is clearly marked and easy to find.
To prove this, here’s one of the 33 SaaS marketers who shared the secrets to converting free trial users:
“We used to ask for a credit card, but later we dropped that request and immediately saw a 71% increase in users wanting to try our software which were previously dropped on the payment screen.”
Udit, Founder & CEO at Firstsales.io
5. Make sure the onboarding process is frictionless and user-friendly. Simplify the initial setup steps and guide trial users through the key features and functionalities of your SaaS product. Break down complex tasks into manageable steps.
6. Set up a cross-functional team consisting of product, marketing, and customer success members who will take ownership of the onboarding process. This team can collaborate to optimize the trial experience and drive higher conversion rates.
7. Implement behavior-based onboarding. You should leverage user behavior data to personalize onboarding messages and provide targeted guidance based on user actions and preferences to avoid sending the wrong emails at the wrong time.
Marketing automation software like Encharge can help boost product activation by letting you send behavior-based onboarding emails. This personalization ensures that the emails your trial users receive are relevant and timely.
8. Consider using specialized SaaS onboarding software tools for email automation, walkthroughs, or product tours to streamline and automate the onboarding process. These tools provide a range of features and functionalities that can help you deliver a personalized and engaging onboarding experience for trial users.
8. Offer interactive guided tours, video tutorials, or tooltips within the product to help users navigate and understand its features and functionalities.
9. Emphasize the unique value proposition and benefits of your SaaS product throughout the free trial. Clearly communicate how your solution solves the user’s problems, improves efficiency, or drives business results.
10. Provide responsive customer support during the trial period to address users’ questions or issues, helping them overcome obstacles and feel supported.
11. Ensure your pricing aligns with the needs and expectations of your target audience. Test different pricing plans to find the best balance between value and affordability.
12. Once the expiration date for your free trial approaches, be sure to give ample notice to your customers. This way, they can decide whether to convert to a paid subscription or cancel their account before they are charged.
Helppier sent this email two days before my trial ended.
13. Design a post-trial nurture campaign to stay connected with expired trial users and re-engage them with your SaaS product.
14. Continuously track and analyze user behavior and metrics. Ask for real feedback from real users months or even years after the trial. With this, identify potential bottlenecks or areas where users drop off and make data-driven improvements to enhance the user experience.
This is LastPass software years after I signed up for its trial.
Interested in a more comprehensive list? We recommend reading our article about the 28 SaaS free trial best practices to supercharge your growth in 2023.
Are you within the industry benchmarks of trial conversion?
Remember, understanding your numbers means understanding your customers. Understanding and optimizing your SaaS free trial conversion rate is crucial in evaluating the success of your SaaS.
Take a look at the metrics applicable to your SaaS:
- Visitor to free trial
- Free trial to paid
- Visitor to freemium
- Freemium to paid
And remember that the numbers tell their own story. Freemium plans may get more visitors to users because they’re…FREE. But then, you’ll see a higher conversion from opt-out trial users since we’re talking about a smaller, more committed group willing to share their credit card details.
Apply the tips above and see how your trial conversion increase. But if you need to optimize your trial conversion rate today, start with tailoring your communication based on user email activity.
Ensure the right emails get into your user’s inbox at the RIGHT time. Use Encharge to deliver advanced behavior emails so you guide your users to value faster. Drive more conversions with Encharge.
