How Do Trial Pricing Strategies Work?

In a market flooded with many products and services, businesses frequently use innovative pricing models to attract and retain customers. One such approach is a trial pricing strategy designed to lower the barrier to entry and increase customer engagement. This article explores the different trial pricing strategies, their utilization, and their benefits.

What are Trial Pricing Strategies?

Trial pricing strategies are marketing approaches businesses utilize to entice customers by offering them a product or service at a discounted or free price for a limited time. 

These approaches allow companies to demonstrate the value of their products, attract new customers, and ultimately grow revenue while building trust with clients. Instead of paying immediately, customers can use products for free or at lowered prices for a set period. 

Prospective customers can explore the various features of a product and become thoroughly acquainted with its functions during this period before their money begins to count.

Trial pricing strategies lower potential customers’ initial risk and allow them to evaluate the product or service before making a full financial commitment.

The Psychology Behind Trial Pricing Strategies

People are naturally drawn to freebies. It’s a powerful incentive that can persuade people to try something new, even if they haven’t considered it before. 

Free trials allow customers to test the value of a product or service without making an initial cash commitment, which may lead to their continuing to use it after the trial period ends. 

A limited-time trial offer also urges potential consumers to move quickly to prevent missing out on a potentially profitable opportunity by harnessing the fear of missing out.

Additionally, trial pricing methods also aid in building trust between a business and its potential clients, which is critical. According to a new Clear Channel and JCDecaux survey, 81% of consumers consider trust a decisive aspect of a purchase. 

The sense of urgency and the opportunity to explore product benefits increase the likelihood of trial sign-ups and eventual full-time conversions.

MORE: Psychological pricing explained.

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Different Types of Trial Pricing Strategies

Free Trials

Free trials are the most popular marketing strategy due to their unrestricted access to customers for a limited time.

According to Totango research, this model is used by approximately 44% of Software as a Service (SaaS) companies. A typical example is Dropbox, which offers prospective customers a 30-day free trial for each pricing plan.

The goal of the free trial is to allow users to experience the full range of benefits to convince them of the product’s worth.

Free trials are typically time-limited, but they can also be usage-limited. For instance, the free Loom Starter plan limits users to 25 videos. After recording 25 videos, you must upgrade to the Business plan for additional videos. Businesses that use this trial strategy typically see higher conversion rates than those that don’t.

MORE: What is tiered pricing strategy.


The freemium pricing strategy combines ‘free’ and ‘premium’ offerings into a user-friendly package. The pricing model gives away basic services for free while charging for advanced features and capabilities. 

This model is a practical ‘foot in the door’ strategy, attracting a large user base and allowing businesses to upsell their premium features.

Spotify is a fantastic example of a successful freemium model. The free tier allows users to listen to music with limited functionality and occasional advertisements. 

Users must subscribe to Spotify Premium to enjoy ad-free listening, offline mode, and full mobile functionality. According to Statista, Spotify had 205 million premium subscribers worldwide as of the fourth quarter of 2022, up from 180 million in the fourth quarter of 2021. This demonstrates the effectiveness of the freemium business model.

Low-Cost Pricing

Low-cost trial strategies provide potential clients complete or virtually complete access to a service in exchange for a little charge.

Adobe’s Creative Cloud service is a good illustration of a successful low-cost trial strategy. For a nominal charge for the first month, Adobe provides a full range of creative tools, from Photoshop to Illustrator. 

Users are more likely to convert to a full-price membership because of the little charge, which lets them test the service’s worth without committing much money upfront. Due to this strategy, Adobe generated a record-breaking $17.606 billion yearly revenue in 2022.

Users become emotionally engaged in the product and are more likely to recognize its worth when they spend a small amount, increasing conversion rates.

A small fee helps weed out uninterested individuals and draws in those interested in a product, improving the quality of leads and conversion potential.

Product-Feature Limited Trials

Product-feature limited trials give users access to a subset of a product’s features for free. This method entices consumers to upgrade for the full experience by providing a taste of the product’s potential. 

Asana is an excellent example of a company that uses this trial method. Asana’s free edition allows basic project management for teams of up to 15 people. 

Users must upgrade to a premium account to use advanced features such as timelines, advanced search and reporting, and custom fields. 

Asana had over 1.2 million paid users as of 2020, demonstrating the effectiveness of this trial model.

The effectiveness of this strategy is based on its ability to provide immediate benefit while also displaying the potential for additional value. 

Free consumers get what they need for free, whereas more demanding users, often businesses, are willing to pay for enhanced capabilities. 

MORE: What is Price Anchoring and How Does It Work?.

Implementing Trial Pricing Strategies Effectively

Implementing an efficient trial pricing plan might be the cornerstone to success for many SaaS organizations. 

However, it’s not just about offering a trial option; it’s about implementing this approach to optimize user conversion and income. Let’s look at essential tactics for effective trial price implementation.

Know Your Audience

The first step in implementing an effective trial pricing strategy is understanding your target audience.

Demographics, user behavior, pain points, and industry demands can all influence the ideal trial price strategy. 

For instance, Dropbox recognized that its target demographic valued storage space and offered 2GB for free, enticing customers to pay more.

Define Clear Goals

Decide what you want to achieve with your trial price. Do you want to increase user acquisition or attract high-quality leads who will convert into paying customers? 

Your objectives will determine the type of trial you provide. For example, Amazon Prime aimed to acquire many users, so they offered a 30-day free trial.

Provide Value

Free trials do not guarantee paid commitment if prospective customers aren’t satisfied with your product’s offers. Ensure your trial offers enough value to entice customers to try your product and reap its benefits. 

For instance, zoom’s video conferencing service is fully functional, but the meeting time in the free edition is limited to 40 minutes. 

Because users already experience high-quality service and know what they would get with a paid subscription, they are usually enticed to upgrade for longer sessions.

MORE: Get an in-depth analysis of Zoom pricing plans in this article.

Streamline Onboarding

A time-consuming onboarding process may turn potential customers toward your competitor’s products. To avoid this, ensure the trial sign-up process is quick and easy. 

In addition, ensure to provide detailed instructions on how to use your product. According to recent research, establishing a robust onboarding procedure increases retention rates by 50%

Communicate Effectively

Communicate with your users throughout the trial period. Show customers how to use your product consistently and remind them of the premium benefits they may receive. 

HubSpot achieves this effect by sending consumers personalized emails during their trial period.

MORE: Check out the Top 7 alternatives for Hubspot.

Measure and Evaluate

Finally, constantly evaluate the performance of your trial price approach and be willing to change it in response to user feedback and conversion statistics. 

Measuring and analyzing trial pricing plans is not a one-size-fits-all solution. It necessitates ongoing monitoring of key performance indicators and adaptation to changing customer behaviors and market trends. 

By monitoring these KPIs, SaaS companies can ensure that their trial pricing methods result in long-term growth and profitability.

MORE: How Does Price Skimming Work?

Benefits of Trial Pricing Strategies

Increased Customer Acquisition

Trial pricing strategies lower consumer entry barriers, making it easier for them to try out and eventually commit to a product.

According to a 2017 survey, companies that offer a free trial package have a 66 percent customer conversion rate. Adobe, for example, offers a 7-day free trial, which has significantly increased its user base.

Improving User Engagement

The more customers interact with a product, the more likely they will become paying customers. Businesses can increase user engagement and eventual conversion by providing a hands-on trial experience. 

Dropbox, which uses a freemium model with limited free storage, has successfully converted a sizable portion of its users to paid plans, demonstrating the success of this strategy.

Word-of-Mouth Advertisement

Satisfied trial users can become brand advocates, resulting in powerful word-of-mouth marketing. People are 90% more likely to patronize brands recommended by a friend.

Businesses can attract prospective customers while laying the groundwork for long-term customer relationships and sustained growth by strategically implementing trial pricing.

Gathering User Insights

Trials offer an invaluable opportunity to collect user feedback and insights that can help guide product development and marketing strategies. 

Most businesses take advantage of the free trial period to learn about user behavior and preferences for future projects.

Pros of Trial Pricing Strategies

  • Customer Acquisition: Trial pricing strategies frequently attract a larger number of potential customers because they give them the opportunity to try the product or service for a lower price or even for free.
  • Feedback and Improvement: This strategy enables businesses to collect valuable feedback and make necessary improvements before launching on a large scale. 
  • Marketing Opportunities: If trial users enjoy the product or service, they can become an effective marketing tool. They might tell their friends, family, or followers about it, resulting in increased awareness and potential sales.
  • Conversion Possibilities: Customers who find the product or service valuable during the trial period are more likely to convert into paying customers.
  • Price Sensitivity Analysis: An organization can gauge price sensitivity among different customer segments by offering different pricing levels during the trial period.

Cons of Trial Pricing Strategies

  • Lower Initial Revenue: Businesses earn less revenue initially by offering a product or service at a reduced price or for free.
  • Cost: The trial period can be expensive, especially for businesses that sell physical goods or provide high-value services.
  • Consumer Perception: If trial pricing isn’t managed effectively, it can lead to the perception that the product or service is cheap or of low value, which could harm the brand’s reputation.
  • Dependence on Conversion: The success of this strategy is heavily dependent on converting trial users into paying customers. A low conversion rate can result in significant losses.
  • Abuse of Trial Offers: Some customers may take advantage of trial pricing and sign up for trials repeatedly, resulting in revenue loss.

Things to Avoid When Implementing Trial Pricing Strategies

Overcomplicating Your Offer

Make their trial offerings as simple as possible. Too many options or complex words may confuse potential customers and discourage them from trying the product or service. 

Keeping offerings straightforward, on the other hand, would improve the customer experience and boost conversions.

Neglecting User Experience

The trial period enables users to assess the worth of the product. Neglecting the user experience at this critical juncture may result in low conversion rates. 

According to a 2020 PWC study, 32% of customers will stop doing business with a company they like after just one bad experience. As a result, even during the trial period, a positive user experience is critical.

Undervaluing Your Product

While offering free or discounted trials may entice customers, avoiding undervaluing your product in the process is critical. 

If the trial price is perceived to be too low, the product may be perceived to be of poor quality. As a result, businesses must strike a balance between enticing trial offers and maintaining a value proposition that accurately portrays their product’s worth.

MORE: The benefits of high-low pricing strategy

Is Trial Pricing Strategy Good for My Business?

A trial pricing strategy allows prospective customers to try your product or service for a limited time, usually for free or for a small fee. This approach lowers the barriers to entry, fosters trust, and allows people to experience the benefits of your product firsthand.

However, such an approach may not be suitable for all businesses. First, you must determine the cost of offering free or low-cost trials. 

Providing service with no immediate return can be costly, and not all businesses can handle the immediate financial impact.

In addition, consider the complexity of your product. Customers may not fully understand the value of your product after a brief trial period if it is highly specialized or complex. A demonstration or guided tour may be preferable in these cases.

Finally, consider your intended audience. B2B clients, for example, may require more time to make decisions and prefer detailed demonstrations over trials. In contrast, B2C customers often value the ability to try before they buy.

Considering these factors and understanding your company’s unique needs and circumstances can help you decide whether this strategy suits your business.

Key Takeaways

In today’s corporate environment, trial pricing strategies are critical. 

They enable businesses to demonstrate their products or services, gain the trust of potential customers, and eventually convert trial users into paying customers. 

Trial pricing methods will continue to be a valuable tool for firms looking to differentiate themselves in a competitive market, build strong client relationships, and promote long-term growth in the future.

When used correctly, these methods can lead to increased client acquisition, improved brand loyalty, and significant corporate development.

Frequently Asked Questions (FAQ)

Trial pricing strategies in the SaaS industry include free trials, freemium pricing, and low-cost trials.

The Freemium model provides free access to basic features, while premium features are locked behind a paywall.

Trial pricing strategies can substantially increase conversions and sales when properly implemented.

Trial pricing is used in many different fields, but it’s prevalent in the digital industry, where it’s used for Software as a Service (SaaS), digital media services, and online subscription-based businesses.



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