Following the post  regarding the Free Trial 3 stages process and as part of the discussion in LinkedIn I would like to share with you the following comment from Michael DunhamVP of Services Engineering, Principal Consultant at the SCIO a web application software consultancy vendor. I found it interesting and giving some more points of view when planning the free trials funnel.

As far as the discussion about confirmation emails goes – I think it is a perfectly valid way to capture emails for follow-up (a good practice, especially with new B2B products) and to weed out the pretenders. Most serious buyers will use their business emails and be straightforward about their interaction. In some cases I think some market information (segment, region, company size, etc) is useful also. I know it raises the friction of a trial, but if it is worded right – it tells the user the vendor is interested in knowing something about their market and why people do or don’t convert to buying the service. 

Frankly, in all the years I have been in software development, enterprise solutions and consulting I have never seen an enterprise sale that didn’t require a trial. A demo just doesn’t cut it for enterprise buyers. They are buying for value and they want to ensure they get it. And – on the side of the vendor – while I might have trial data to test features – I want testers to use the service and input data. Doing that increases “stickyness” because they can see their data working and they can test the business process in their context. that means you want a button to clear demo data and start fresh. If the service works for them, they are going to want to just buy and move on (not lose their input data) 

In many B2B apps – the vendor will want multiple users from the same client to sign on for the trial. In a Intellectual Property solution (for example) you need the entire product legal team to try the app to understand the process implementation and know if it will fit or can be modified to fit their constraints. One of the things I see a lot is B2B apps that are for complex processes but assume one person can evalute the app and buy. You need to be able to invite other company members to the trial to get a concensus in most B2B situations. 

Free trials have an operational cost and can provide a lot of information for the ISP if – the trial users are actually the target market and not “lookyloos” that have no intention of buying. It isn’t unusual to have a requirement for a credit card in SMB markets even though the card won’t be charged unless the prospect converts. This creates some friction but we need to understand that free trials are NOT a substitute for value marketing. If the prospect doesn’t already understand the value proposition when they start the trial, the conversion potential is going to be much lower. Too many people think of the trial as a marketing tool. It must be the last step – the setting of the hook after they have already taken the bait. 

With a good trial system, part of what you can find out is – is the service intuitive? can user become productive with little or no training or effort? Can they validate solution value immediately? Is the service extensible? Can adjacent markets adopt the application with a few changes to the configuration? If you have embedded meeting into the application and the trial, you should be able to answer these questions. 

When the prospect is ready to buy, it needs to be a clean and fast process that gives them the assurance that the ISP is ready to engage. If I have to jump through hoops, if I can’t easily decide if I want to clear out trial data or simple transition. If I can’t buy it the way I need to (credit card, bank transfer, various periods, etc) it becomes a barrier to someone who is already sold. 

The trial process is a critical part of the sales process to understand in SaaS. I’m glad you’re addressing it.

Join my LinkedIn discussion to read more.

Starting with a research on optimizing the SaaS customers’ acquisition funnel, I decided to focus on analyzing the conversion from a visitor to a registered free trial user. I examined about 50 SaaS systems starting from the most known ones, such as Salesforce.

Checkout I Am OnDemand YouTube Channel and rate those 26 free trial jumps.


Software professionals such as product, development and operation managers tend not to give the free trial mechanism the right attention, as the free trial is just a “single simple form”. From their perspective it is part of the product’s marketing website and ins’t part of the whole service. This approach brings some of the SaaS vendors to spend almost all of their planning and development investments on the application. No doubt that this is a mistake, the free trial process has a very important role in the SaaS business life. The free trial mechanism should not be left behind, it is an integral part of the product and must be smart, measured precisely and improved continuously.

Trying to categorize the different “free trial mechanisms” was a bit tricky due to the plenty considerations that should be taken in mind: what is the target market? What model does the system support – B2C? B2B? Enterprise? How complicated are the business values that the SaaS offering present (Social software requires less setup info than financial software)? Etc.

Finally I decided to categorize the products I tested, by the visitors’ effort needed to convert, hence the duration till the new visitor converts to a new user. Categorizing by this feature doesn’t means that faster is better, it is just faster. This segmentation might not fit to all the different SaaS offerings:

  1. Small – Registration straight from the www site homepage, with almost no setup actions.
  2. Medium – The free trial process requires switching through several pages in the “www site” (I use this term to talk about the marketing website of the product).
  3. Large – The free trial process includes jumping to the mail box in order to complete the registration stage and login to the application.
  4. Extra Large – The free trial process doesn’t end with login to the application and the visitor will need to wait for someone to return a call.

Visitor efforts on free trial conversion.png

Most of the applications I tested fit into the 2nd and the 3rd categories. I am sure that some of those vendors can improve the process easiness by stepping up to the 1st category or at least move from the 3rd to the 2nd. There are several considerations in belonging to the 4th like the maturity of the product, some of the young vendors will want to have a personal touch with their visitors on the alpha phase to understand their potential market needs. Some vendors will not want to reveal the application on a free trial due to competition. I also heard some saying that for enterprise software solutions free trial is not part of the customer acquisition process, for my opinion this approach holds a lack of vision.

The free trial 3 steps model

Your visitors don’t want to spend time if the service’s value is not clear and they will not mind spending time if the value presented is clear to fit to their needs. Most of the free trials jumps I tested can be entered into “the free trial 3 steps model” including 3 pages, that the visitor goes through at the free trial sign-up procedure.

> > > > > 1. The WWW homepage

Clarizen Free Trial Button

Make sure that the www homepage presents the application’s basic values in a glance and give an option to drill down to read more. Make sure to know your audience’s needs, not only the specifics you can help them with, and provide an appealing and relevant content. Use graphics creative design to catch your visitors’ eyes and social tools to strengthen the communication with them. There are no limits to the creativity that you can present here, think out of the “Salesforce free trial box” and don’t forget to measure your visitors’ habits.

There are some leading SaaS vendors that designed their free trial process to include the pricing page. The main button on the www site homepage is “Pricing and Plans” button, clicking it forwards the visitor to the pricing page that includes also an option for a free trial. When I am interested in buying something I first want to understand that it solves my needs and only then I will ask for its price. I believe that the free trial button is still essential and I suggest giving an access to the free trial and then the option to check the pricing plans.

Following my free trials research here are a few insights regarding the www homepage –

  1. Put links to your social tools and show blogs’ content.
  2. Use videos to present the application and to show you customers’ success stories.
  3. Content should be dynamic and change according to the visitors reactions.
  4. The free trial button must be unique and available on all website pages. Also make sure that it is visible when scrolling.
  5. Although it sounds obvious, please make sure there are no errors on the page, specifically when clicking on the free trial button.

> > > > > >   2. The Registration Form

Once your customer decided to take the free trial, you should make it is perfectly easy and smooth (I would say fast as well) to start the application trial. When planning the registration form, I suggest to start from understanding that an email and a password is enough to be able to convert a visitor to a user. You should examine carefully all other fields that seem to be necessary to start the trial (URL, number of employees) or any other information you like to get from your visitors (Phone#, how did you hear about us?).

  1. From the visitor perspective the details submission is an instantaneous step before jumping into the application hence he will be fully focused on a quick submission of the form. I found some that show minimal content such as a quote of a happy customer, this is nice but why bother the eyes, the registration form will be enough.
  2. Once submitting the form the visitor should immediately be forwarded into the application. Even for security products a good option to solve identity issues will be by activating specific features inside the application by an email confirmation.
  3. Again don’t forget to measure. For new SaaS vendors I will strongly suggest to go with Multivariate Tests to optimize the registration form.

> > > > > >   3. The Application Landing Page

Once the free trial form was submitted and the visitor becomes a user, the user will be forwarded to the application’s landing page that has a very important role in the free trial jump. The first moves in the application must reveal the user to the benefits and present clearly how those align with the business needs. It is important to control the users’ actions and make sure that they demonstrate the system values, so don’t forget to measure! and improve continuously. Here are some points that you should consider when planning the application’s landing page:

  1. Emphasize basic actions to lead the customer to the main system work flows. For B2B systems an option to check a specific role view and workflows can be nice (check SugarCRM free trial as an example).
  2. Put links to training materials and knowledge. Some systems implant support videos in the landing page to help the visitor get started.
  3. Depending on your customers’ support capabilities, you can put an option to contact a person for an immediate live support.
  4. Make sure that the trial account includes default values so the user will see the application at work.
  5. Suggest and do not force Setup of the account.
  6. Link to pricing and show how much time is left for the free trial.

I found the following presentation and would like to share it with you as it is a great resource for understanding how to design your sign-up process.

Designing For Sign Up 


There is a lot more to consider when planning the customers’ acquisition funnel of a SaaS system: How to increase the awareness of the www site? How does the email to the new user look like?  How to present the pricing plans? How to measure? How long should the free trial be, 15 or 30 days? Although I thought that this subject is mature enough, I found that it is not. The free trial jump is still evolving and I feel that there is plenty of room for new creative ideas, just don’t forget to measure !

To continue the free trial discussion you are welcome to join the my LinkedIn discussion.

Following part 1, here is part 2 including the second half of Waineright’s important lecture:

Waineright starts the revenue generation and pricing discussion, by explaining that a difficult issue for the SaaS vendor is to find a clear relation between the expenses and revenues generated by the subscription fees. He is not elaborating on that point but summarizes it by saying that the specific ISV, as well as the specific industry market, will need to find their way by learning on the go.

I think that there is place to continue investigating this point. I found that SaaS vendors are struggling on a daily basis with calculating and optimizing their low profit margin, obviously this has a clear impact on their business life. Discussing monetization strategies, he presents five ways to generate revenues: subscriptions, advertising, transaction fees (revenue share on the transactions made), digital good and aggregated data (selling information about the customers and industry benchmarks). These options are clearly driven from the economies of scale benefits and in my opinion we must learn them by heart.

“I don’t quite understand it”

The next discussion was about subscription strategies including freemium.”I don’t quite understand it” Waineright says. I can add that acquiring lot of “freemium subscribers” can be a good option for a startup company to prove abilities and value but for an ISV who wishes to generate revenues, the freemium is not an option. The clear conclusion here is that freemium is only a marketing tool that has a cost and that must prove its benefit though there are better tools to achieve a cost effective sales promotion. Waineright says that people expect to get the same service level as if they were to pay for the service (such as Gmail users) and that ..

“there is a huge delta between using something for free and deciding to pay for it as a customer”.

Waineright is adding that there is still the administration cost and that eventually there will be an investment on the infrastructure to support the collection of payments (if the SaaS vendor starts delivering as only a freemium service). For this matter he exemplifies his points using study cases such as Box.net , Malichimp and Intuit. The latter demonstrate a success story  with 60% of revenues that are generated from its SaaS operations.

In the last part of his presentation, Waineright suggests to use a trust advisor that can help with strategic guidance in order to do the right things. Due to the character of this lecture and the lecturer’s nature,a as well as from my personal experience I find this suggestion to be very important specifically for software vendors that are finding themselves “forced” to move to the cloud. SaaS is here more than 10 years and although it is just now starting to spread, you are able to find experts in this industry and they will be able to assist. Waineright is summarizing with the following 5 tips:

  1. Find your prospects – measure carefully your service values and focus on the potential customers’ users that will get the most from the application.
  2. You are a service provider – SaaS vendor does not deliver toolkits anymore but a “working service”.
  3. Pricing model must be kept simple and aligned with the service value proposition.
  4. Simple packaging of the application is important in order to get new customers on-board quickly and continue on with leveraging the upsale capabilities.
  5. Don’t forget to collect the cash!

The end of the presentation includes Q&A . One of the questions was “why are SaaS companies not profitable?” Learn more by listening to the lecture audio. I want to thank SafeNet and IGT for arranging this event as it was very inspiring. I also want to thank Mr. Phil Waineright on sharing this valuable knowledge with us.

Listen to the lecture and check the slideshare presentation

Softletter has just shut down its Pricing, Billing, & Discounting survey; this consisted of 54 questions on this topic with over 100 senior SaaS executives participating.

Click here to check it out

Dear ISV, you developed and made huge efforts to take your applications to the cloud. That is nice but it is only the start, now you will probably stand in front of the following questions – How will you recognize and approach the new markets that are open for you? how will you describe those markets your value? What can be the prospetcs rejections ? and how will you actually conquer in short time and with minor loss?

Click the followings to get more information about Prospect rejections, Pros and cons of SaaS pricing

“The promise of Cloud Computing is primarily the following key technical characteristics:

  1. The ability to create the illusion of infinite capacity; the performance is the same if scaled for one, to a hundred, or a thousand users with consistent service-level characteristics.
  2. Abstraction of the infrastructure so applications are not locked into devices or locations.
  3. Pay-as-you-go usage of the IT service; you only pay for what you use and with no or minimal up-front investment costs. You typically just use the service through a connection and device.
  4. The service is on-demand; able to scale up and scale down with near instant availability. Typically, no forward planning forecast is required.
  5. Access to applications and information from any access point.

But this is only half the story. These technical characteristics can also be found in non-disruptive technology solutions. The rate of change and magnitude of cost reduction and specific technical performance impact of Cloud Computing are not just incremental, but can give a five to ten times order of magnitude improvement.”

Click here and Check this great summary by TheOpenGroup.org

Click here to get information about Windows Azure costs including migration costs, and get a pricing overview.