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Improving trial conversions using loss aversion
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A trial in SaaS provides a means for users and teams to evaluate your paid product offering before committing to purchase it.
Understanding a key psychological principle can help you improve the performance of your trial.
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There are 3 main configurations of trials in SaaS
Free plan with opt-in trial
Free plan with reverse trial
In a standard trial, users and teams get to experience the (typically nearly complete) value of a paid plan for some set period of time, or until some usage limit is reached. After the trial ends, they either purchase a paid plan or lose access entirely.
In a Free plan with an opt-in trial, new users and teams sign up and access a limited free offering. At any point following, they can opt-in to a trial of a paid plan. After the trial ends, they either purchase a paid plan or revert back to the free plan, with all its limitations.
In a Free plan with a reverse trial, new users and teams sign up and immediately access the trial of a paid plan. After the trial ends, they either purchase a paid plan or revert back to the free plan, with all its limitations.
A key reason that trials work so well at converting users to paid accounts is the psychological principle of loss aversion.
The principle of loss aversion describes the tendency to value avoiding loss over acquiring equivalent gain.
At the end of a trial, users and teams are faced with a choice:
Pay for the features they’ve been enjoying
Lose access to some (or all) of the features they’ve been enjoying
When users and teams realise value from a given feature of your product, their psychological attachment to it will increase.
As such, during a trial, it’s usually beneficial to work to drive awareness of paid features and encourage the adoption of those features such that the feeling of potential loss is heightened at the end of the trial.
This means that during a reverse trial, you should focus on both the activation of the team and then monetisation awareness and adoption of paid features (assuming those features can reasonably provide value within the trial duration).
Note: If you have a free plan with a reverse trial, it’s important that your activation definition is not contingent on any paid/trial features. The goal of activation is to build habits that drive retained usage, and even if taking that paid path isn’t right for a user/team at the end of their trial, you want to retain them on the free plan to potentially monetise them later, and to fuel further acquisition and engagement loops.
The specific paid features that you encourage adoption of during the trial should be those that you know drive increased monetisation, and will ideally be guided by what you know about the user/team and their use case using data you’ve gathered during the onboarding process.
If your trial/paid plan removes a usage limit that’s present in the Free plan, you can highlight this in your UX, such that at the end of the trial, when reminded they’ll lose unlimited access, loss aversion will be anchored against this.
During the trial, your nurtures should primarily be focused on getting the user/team to value.
In the words of Fareed Mosavat (apologies Fareed if I butchered this a bit) :
Focus on your user’s path to value, not on your path to monetisation.
If you focus on the former, the latter will follow.
But it’s common also to leverage the loss aversion principle, along with developing a sense of urgency to drive engagement and monetisation.
Here’s an example email nurture from Krisp (apologies to the Krisp team for calling out the CTA shocker!)
And here’s another example from DocuSign:
And lastly, here’s one from Calendly:
The trial conclusion flow
Trial nurtures aren’t the only place to leverage this principle. It’s also effective when used at the point of decision during the post-trial flow.
When the trial ends, you are presenting the user/team with the choice to purchase a paid plan or to lose access to some or all of the benefits they’ve been experiencing during the trial.
It’s choice time.
This moment is a key opportunity to remind them of the value they’ve been realising during the trial.
Tip: Instead of using generic language around loss of access to features, leverage usage data specific to the user/team/workspace in the trial conclusion flow to make the perception of potential loss more real, and drive increased conversions. For example Miro might highlight that a user created five boards during their trial and that they’ll lose edit access to two of them if they drop to the Free plan.
You’ll typically run these trial conclusion flows across both email and in-app.
The first time a user/team logs back into the app after the trial conclusion is the point where they’re presented with a choice, and this interaction is ripe for optimisation to drive higher conversions.
Here’s the notification that Miro uses - a prominent banner:
And here is the Miro help article that describes the process:
Note the use of language that emphasises the loss of capability when downgrading to the Free plan, as opposed to the benefits of choosing a paid plan. The exact same message is framed differently to leverage the principle of loss aversion.
Loss aversion is a powerful principle to be aware of and leverage as you build out your trial experience.
Experiment with it in different places in your flows to find the language, delivery mechanism and timing that best works to help drive improved monetisation performance.
Before you go, here’s a quick update on the Reforge Halloween giveaway….
I picked a lucky winner at random last week who will now receive a year’s membership.
Thanks to everyone who entered, and a warm welcome to the new folks who subscribed after hearing about the giveaway - I really hope you enjoy the content!
Thanks again to our sponsor for this post - Amplitude!
Until next time!
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