For any business owner, PM, or anyone in the decision-making seat of product, figuring out which strategy to use to when trying to get people to use your product is a tricky balance.
Do you give the user a free version of the app (freemium) from the get-go, or do you make all the app functionalities available for users to use from the get-go? Each of these decisions has an implication for your customer conversion rates.
Encouraging users to try your app for the first time
Have you ever walked into a store and seen a new flavor of your favorite brand of chips and thought “I wonder what that tastes like.” Fortunately, chips are generally relatively low-budget items and therefore the resistance to trying out a new flavor of chips will not be as high as the resistance you may experience to a new cellphone, for example.
Over the years, Marketers have learned that there are ways to get customers to try, and then buy products by decreasing the amount of resistance they feel before making a purchase.
Freemium
A freemium model gives the user the ability to try out the main functionalities of the app. An example of an app that offers this functionality is Dropbox which allows you to access 2 gigabytes of storage for free. Once you’ve used up the allocated storage, you will be required to pay to continue using the service.
The advantage of this model is that users are able to test out your app. The disadvantage, as can be seen in the low conversion rates, is that people may never become paying customers. Dropbox, for example, has been said to only have a 4% conversion rate.
Trial version
Other companies use a slightly different method to get people to try their apps – free trials. Spotify, for example, allows you to try the Premium version of the app for free before deciding whether or not you want to proceed to purchase the app.
In this model, the company bets on the user enjoying the app so much that at the end of the trial period (30 days, 60 days, 90 days, etc) they want to continue using the app. At this point, the user will be required to purchase the app before continuing usage of the app.
As you would imagine, the conversion rates for this model are a lot higher than the Freemium model. I mean, the user has no other choice than to purchase the app, now do they?
The problem, which is also the disadvantage of this model, comes in when you have users like myself despise the all-and-then nothing model that the trial version introduces.
If you will allow me to rant about it for a short while:
As a user, I like to know that I have a fair and equal choice in each activity I make. I feel like Trial versions take away that control. What goes through my mind whenever I’m asked to try a trial is: “shucks! at the end of this trial, if I get attached to this product, I will be obliged to purchase this app. Once I purchase the app then I need to continue using and paying for the product for whatever period (1 year, 2 years, etc).
Thank you for your patience throughout the rant.
Reverse trial
Some companies use a “best of both worlds” approach. Hotjar, an app that allows you to see where users spend time on your website, is an example of this.
After you sign up on the website, you’re automatically put on the higher tier package of the app. After 2 weeks you’re downgraded to the Basic tier that’s free forever.
The advantage of this model is that the user is not informed of an ending trial, and therefore removes the emotional resistance I mentioned earlier. But, it leverages on the advantage of the trial version by allowing the user to try the free version, and potentially fall in love with it before being downgraded to the free version.
That ladies and gentlemen is Psychology 101: Remove the emotional barriers, and leverage the financial benefits. You can read more about creating a frictionless experience here.
