Free trials have high customer conversion rate

New data shows 30-day free trials had the highest customer acquisition (32%) and conversion rate (56%) and are shown to be 28 times more effective than free products. However, despite its effectiveness, nearly 3 in 4 ecommerce sellers didn't use the approach in 2023.

Free trials have high customer conversion rate

These findings come from the ‘Optimal Free Trial Length for Digital Products’ study, which was conducted by Whop - all-in-one platform for digital products, communities, and software - to understand how digital retailers can increase customer acquisition and conversion rate by analysing free trials of 3 days, 7 days, 14 days, and 30 days.

Of the four free trial periods, 30-day free trials are the most effective method of paid customer conversions - almost four times (273%) more likely to convert a customer than a 14-day free trial. The second highest conversion rate was the 3-day free trial at 35%, however, this approach only had 2% total signups.

The findings also demonstrate that 30-day trials experience more successful signup rates, 16 times more than a 3-day trial and 1.5 times more than 7-day free trials.

While it is tempting to speed up conversion rates by using shorter free trials, the data shows 30-day free trials are the best for engaging and converting customers. This is because customers have more time to see how a product can create value for them. The longer customers use the product, the more they rely on it, and the more likely they will convert into paying customers - at no cost to the business.

"As it becomes increasingly challenging to get heard as a product or service in a crowded online space, one of the most powerful methods we've identified is offering 30-day free trials. By providing potential customers with an extended period to explore and integrate a product, businesses and digital creators can significantly boost engagement and conversion rates. This approach allows users to fully understand the value a product brings to their lives," said Cameron Zoub, CGO and co-founder of Whop.

"As a platform which gives creators the ability to connect to a global audience, our mission is to empower digital product sellers with the insights and tools they need to succeed. By adopting proven lead generation techniques like extended free trials, creators can drive substantial growth and build lasting relationships with their audience," said Cameron Zoub, CGO and co-founder of Whop.

Why providing a free trial can help your business

As mentioned, more than a quarter of ecommerce sellers used free trials in 2023. But why is the free trial method so popular?

• Free trials can lead to more sales/profit - As our data has shown, free trials can lead to increased sales by converting users who simply may not have signed up for your product in the first place!
• Free trials encourage users to make a purchase - Providing a free sample is known to kick in the psychological aspect of reciprocation. After receiving something for free, people feel obliged to reciprocate, as they want to give back to you after you have given something to them.
• It's a free marketing exercise! - Unlike physical goods that do have a cost, with digital products - especially when you aren't even paying for hosting costs - a free trial actually has zero cost! Whop doesn't charge hosting costs, you only pay a fee when a user buys the product.
   

Why conversion rate matters

So we have established that offering a free trial can be beneficial for your business. But why is the conversion rate so important? Let’s take a look at why you need to be monitoring how many of your free trial users are becoming paid customers.

• You’re giving away something for nothing - With a free trial, you are essentially giving away your product for free. The hope is that this free user will convert into a paying customer, but that does not always happen. 
• Users may play the system - There are some people who may sign up for multiple free trials using multiple email addresses and pseudonyms. There are also users who will sign up for a trial, knowing that they intend to cancel before the payment period kicks in. 
• Increased conversion = increased success - The higher your conversion rate, the more successful the free trial. Are customers signing up for the paid version of your product, or are they ditching it before it is time to pay?
   

So the question remains - how do you improve your free trial conversion rate? The key lies in the length of the trial.

30-day trials outrank all other free trial lengths

We looked at the conversion rate for a range of free trials and measured how they stack up against one another, looking at free trials of 3 days, 7 days, 14 days, and 30 days. Here’s what we found. 

What the data tells us

30-day free trial outranked all other trial lengths in terms of customer acquisition and free-trial conversion rate.

• The 3-day trial had a conversion rate of 35%. However, within our case study, not many users had opted for the 3-day trial, so although the conversion rate is good, the actual number of customers that a free trial brings in is minimal. 
• The 7-day free trial had a higher percentage of free trial users at 22%. So more people are signing up for a 7-day free trial than a 3-day trial. However, the conversion rate is lower - at only 20%. 
• The 14-day trial period engaged fewer users than a 7-day trial, with 9% of users opting for a 14-day trial. The conversion rate was also lower again, with only 15% of free trial users becoming paying customers. 
• The 30-day free trial had the highest percentage of users, at 32%. It also had the highest conversion rate by far - 56%.
   

The research also revealed that free product adoption from buyers rarely converted into paying users. When looking at a company offering up a free product, less than 2% of those free product adopters went on to purchase a paid product from that seller.