I am a huge fan of the unlimited (duration) free trial. How many of us sign up for something, poke at it, forget for a few weeks, and then go back again more seriously? I'm sure I do it all the time. By the time I remember, I am most of the way through a trial period and haven't actually evaluated wether the product is a good fit for me or not.<p>Regardless of how long your trial runs, people really need to bake in resource limits. I assume most SaaS companies have offered (or will offer) tiered rate plans based partially on consumption, so if you are starting as a free-only beta, why not bake in some sane resource limits from the start? Some ideas for this might be:<p>* maximum podcast size/duration (10 min or 3MB free?)<p>* 4 free uploads, then you pay<p>* Retention period - free accounts only store data for 30 days from upload<p>Sure, you are still technically paying for the free folks, but you greatly limit the cost damage while providing reasonable motivation for people to move to a paid tier when they are ready.
I'm struggling to see why bandwidth is costing you so much. We have a dedicated server with 10tb bandwidth on 1gbps port for under $100 a month.<p>Also, if the podcasts are failing they can't be using much bandwidth? I think this is cognitive dissonance, you're complaining about free users costing you a lot of money in bandwidth yet apparently they are all failing (very few listeners?)
I'm currently thinking that for my next SAAS project it's going to be pay up front with a 30 day money back guarantee. I've done freemium and 30 day trials and the data I got early made me think that people would convert and they didn't even though they would use the product every day. Maybe my pricing was bad or my sales technique was terrible. I don't know.<p>What I do know is if you price something up front you'll know right away if your sales pitch works and if your pricing is remotely reasonable.<p>I know the conversion rate without a free trial won't be maybe as high, but when you are looking to just validate a product and a marketing strategy, you need to know if it will turn into real sales. You don't have to have a free trial to sell a product.
I agree that your free trial was at the very least much too long, and that the money back guarantee makes a lot of sense for a bootstrapped SaaS company [Jason from WPEngine strongly recommends this as well]; however, I would interpret some of your data a bit differently.<p>50% of your signups never uploaded a podcast, but once they did, 80% uploaded more than one. Your takeaway from this should be that you absolutely need to do everything you can to onboard the user and get them to upload their first podcast because once they do, they are much more likely to continue using the service. I am guessing that now that you have a money back guarantee your average customer will be more motivated than before, but you still need to work to build processes that help users get started and continue using the service, otherwise your churn is going to be horrible.
The only problem I see here is that yours: You wanted customers to discover bugs but you didn´t think that this would cost you money.<p>As I see it, paying $400 a month for a "bug discovery" service is not that bad if it helps to improve your product. It is your expectations that are not in line with yours actions.<p>It is true that "people Don’t Value Free Things", but it is equally true that you don´t value your customer´s time.
Anyone know a good collection of SaaS articles like this? We're about to launch our first SaaS service and would love some battle hardened good practices.
Whatever you do, just make sure that cancelling really is easy if you expect them to give you their credit card because consumers beware of scammy 30 days moneyback guarantee that are designed to make you jump through so many hoops that most give up, or worse, continues billing you until you manage to.<p>An example, eFax: a black hole of pure evil when it comes to cancelling: anyone who ever tried wants to murder kittens afterwards. Whatever you do, never ever <i>ever</i> signup for that thing. Seriously. (At least in the U.S. there is the chat and twitter options, but in Europe, you're basically screwed unless you cancel your credit card).
About to launch a Saas here as well and have been struggling in regards to the free trial thing.<p>I think it depends on the market and the business tastes of the founders/owners.<p>I've ran a couple of businesses, and I tend to agree with Derick that I'd prefer to get my money now, rather than at some point in the future.<p>This can be off-putting for some potential customers, but then again this depends on the market.<p>If I'm creating a vertically integration Saas in a very niche market, I think it's appropriate.<p>If I'm doing a social app, then you basically have to give it away to increase user acquisition, and book the cost of the new user as part of the user acquisition cost equation.
It really depends on the market. My prior project went well with 10 day free trials. People installed it, it did what they wanted, so they kept it.<p>Current project...trials are popular, but getting people engaged in the trials is tough. Lots of engagement diet day..then it drops sharply off,many no amount of emailing bumpsup the return rate about a percent or two.<p>I think it depends on the market, the product and the price point. I think for free trials to work, the person has to have a recurring use for the product, and can easily get value after a short and simple install/initiation session.
SaaS business is not based on some random failed example, but A/B testing, marketing, product development, and more. Any business come with risk and SaaS is the same.
The problem about drawing any broader conclusions here is it appears to boil down to "Don't offer a 90 day free trial in the podcast hosting business because most customers run their course in 56 days" Not sure it really tells us anything about the effectiveness of a free trial for x days and pay vs a charge now with a 30 day money back guarantee
I think the big caveat here is that the <i>space</i> you're in makes it particularly dangerous to offer a free trial.<p>In other words, there are spaces where those costs are far more negligible, such that you could certainly afford 500+ abandoned free trials to convert 1 paid customer.
Well, that was interesting. Now my thoughts.<p>What is he offering? Podcast hosting service? That's commodity. Of course it doesn't make sense to offer free trial if you are selling commodity-based service. How many hosting companies are there offering free trial? Hint: Not many.<p>However, if you are offering a service with lots of added value which has strong lock-in effect (it's difficult for customers to switch), then do free trials by all means. If you don't, you will eventually do anyway. Let me explain...<p>When your startup acquires first customers, you really want to be selective about who your first customers should be. Ideally you want to find "zero-maintenance" customers who just use your service, pay monthly and never really bother you so you can concentrate on growing your startup.<p>It's true your conversion rate will decrease when you do free trial because as a new product, your free trial will suck so much that hardly anybody will make it through (think 5% if you are lucky) but those that make it true will be the most forgiving and the easiest customers you will ever have.<p>If you charge up-front, many people who would normally drop off during free trial will try to make your product work by making various compromises. They have all the incentives to do so because that will avoid them hassle of trying to cancel their subscription and get refund.<p>But I'm afraid this will also kill your little startup. Now you will get needy customers who are not completely in love with your product, made certain compromises and basically hate you for tricking them into using your service and they will make you work hard for a few dollars they are paying you. Not to mention, your churn rate won't be anything to write home about.<p>You need to work hard to acquire new customers, and hardly work on supporting existing ones. Your startup can't afford your existing customers to be pain in the neck when you are the most vulnerable.<p>By the time you have a lot of customers, your free trial on-boarding process will improve so much that you won't even think of charging up-front anymore.
It's interesting that this was a "failure" because it was supposed to be a customer acquisition strategy/business plan. I wonder how the math would shake out if you looked at it as a market research expense.
Has anyone found any good ways to force free users to upgrade to paid? i have a SaaS with a freemium option that has led to 2500 free users and only 1% conversion to paid. The support costs of the free users far outweighs the paid revenue. My guess is most of those free users won't upgrade, but has anyone had success in cutting the dead weight/forcing upgrades?
I once used a SaaS—or whatever you call the abstraction on top of that—and ended up paying $80 for a “sample” EC2 instance of theirs that was just idling, after I had activated it a month earlier.<p>Soured me on trying out new platform services pretty damn hard.
The salient point: author has replaced free trial with money back guarantee and his signups did not decrease!<p>Anyone has similar experience with removing free trial? I wonder if it's actually a trend or a single occurrence.
I think he was right to offer the trial and then right to change strategies after the product got more refined. Can't jump to the top of the mountain in one leap. Still interesting data point!