Free trial or Freemium: which is better for SaaS companies?

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Used by SaaS companies that want to grow quickly, free trials or freemium still raise a number of questions.

This is because, in addition to not generating revenue, at least initially, these marketing strategies can also represent a psychological barrier for the customer to pay for a service that they had for free.

In this scenario, knowing how to calculate risks and use the right strategies to hook the customer with resources that make them pay at a later date is one of the biggest challenges of these customer acquisition models.

However, they work for several large companies, such as Netflix and Google.

Although it is not an easy decision, it is possible senegal phone number lead to choose the right path to optimize customer acquisition and make the transition of users to the Premium (paid) account more easily.

To help you decide between a free trial or freemium, we have prepared this article. Read on!

What is free trial and Freemium?
Free trial, which means free testing, works when companies provide access to products and services for a certain period of time, which is limited, so that users can test the solutions that the business offers.

Therefore, in order to continue enjoying the facilities, at the end of the trial, you must pay.

An example of a free trial model is Spotify . The tool provides Premium features for three months and, if the user wants to continue using all the features, they need to subscribe to the service, paying a monthly fee.

Freemium is a marketing model in which the company grants access to some or all of its services for free, with no time limit. It is the famous demonstration.

In the Freemium model, there may be other limits, such as usage time and features. In this model, there is no time limit, and you can use it forever. Spotify also releases this feature to its users.

In Spotify's case, revenue comes from advertisers. Since the music platform has a huge audience, with millions of people accessing the Freemium account, it is able to attract advertisers.

But if your tool is not capable of attracting such an audience, you need to be alert, as you run the risk of working for free.

Therefore, when opting for Freemium services, you need to consider your company's scenario and the potential return from free users.

Therefore, if registered users are not able to add value to the solutions that your company offers, even for free, you run a serious risk of not having any real revenue.