Find the right balance and payment method for your free trials

Find the right balance and payment method for your free trials

Free trials are a controversial topic - either you love them or you hate them, but you can’t live without them. Free trial abuse and churn due to asking credit card information are two sides of the same coin.

If you make them too easy to gain, people just abuse them. Asking for credit card information is no guarantee either. There are endless internet forums and blog posts that teach you to get unlimited free trials without or with a fake credit card.

If you make them too hard, you might end up losing potential clients who just want to get a taste of the service. There are endless solutions to every problem available online - why should the client commit to anything without testing it out first.

Why should you trust any of your sensitive information to a platform or service you haven’t even tried yet? That’s the whole point of free trial anyways, isn’t it - getting to know the service and building trust before opting into a commitment.

Free trial as a red flag

At the same time, free trials have gained a bad rep altogether. Free trials or “subscription traps” as they call it, have ended up on the radar of the US Better Business Bureau and the Federal Trade Commission. They went as far as calling free trials a hook to get consumer credit card information.

EU has also raised the question of the free trials legal grey zone. They’ve specifically brought out the consumer inertia reliant free trials in the cloud-based backup services, as well as video and music streaming services.

Consumer inertia reliant free trials is a business model that focuses on taking advantage of consumers’ inertia and overconfidence. The trader provides clear information on the terms of the free trial, but one of them is that by signing up for the trial, they are also signing up for transitioning to a paid subscription afterwards, unless they take the initiative to cancel before the end of the free trial period. Also the paid subscription is often automatically renewed unless the client takes the initiative to cancel it, taking advantage of the fact that many consumers will forget to cancel.

Even if the free trial flow isn’t set up maliciously, it can be a serious threat to reputation and customer satisfaction. Discovering that their card has been charged is obviously a bad experience for the customer. As that is not bad enough, it creates additional workload for the customer support.

Recently several tech giants have paid millions to settle class-action lawsuits for automatically renewing subscriptions without consumer consent. Payment companies are launching notification services themselves to warn people signing up for "free" trials when they are coming to an end.

Finding the right balance

It seems that both the users and the service providers can be quite cunning. Problematic marketing practices taint the entire business model, even though most free trials are in genuine interest of both the potential client and the merchant.

So how to bring back the trust and balance into those relationships?

Let’s take a look at the main purpose of free trials - it should showcase the content, offerings, functionality, and USPs to users and convert them into paying customers. Asking for payment information on the one hand helps identify the user and avoid trial abuse, on the other hand it allows a seamless billing experience after the trial runs out.

So the three main points to consider are 1) conversion, 2) identification and 3) comfort of the payment experience. In this light every service provider should ask themselves the following questions.

Does the trial actually help in conversion?

Compare your free trial offers to other offers and see if it actually makes a difference in conversion. If free trial brings you a bunch of subscribers but they don’t convert into paying customers, there’s really not much point into making the offers and providing the service for free.

Should you go all out in the free trial?

You don’t have to offer everything for free in the free trial. If your service can be divided into smaller chunks or layers, don’t give it out all at once but just enough to give a taste. The user should get benefit from using the free version but it’s okay to start billing them for your advanced features.

How long should the free trial be?

Not all trials have to be created equal. Offer different trials depending on the information the client is willing to give in return. For example a month long free trial for credit card users can mean a week long trial for carrier billing. But take into account how long it takes for the client to understand the value of the service and get used to the comfort. If the learning curve is longer, you can’t just give a brief taste as the user might not understand the product.

Should you ditch free trials altogether?

Instead of a free trial you can just make an offer the client can’t refuse. Asking for a payment method is justified if you actually bill the client - even if it’s just 99 cents for a month. Of course there’s a saying it’s better to be free than cheap. The super low price offer might become an anchor point for the customer and they keep looking for that next super-cheap offer. This makes abusing the trial unproportionally rewarding for the client and it doesn’t even feel like abusing since they’re paying for it, right?

And finally, have you considered alternative payment methods?

The free trial flow doesn’t have to be a choice between a credit card or nothing. The talk about credit card fraud has made people especially wary about protecting their card information. Alternative payment methods can seem a lot less threatening but get the job done just as well or even better.

For example carrier billing identifies the user by its mobile number. This means the personal data is protected and the client doesn’t have to insert any more information. At the same time people rarely change their mobile number, whereas they might change their name and definitely will change their credit card number. As credit cards expire regularly, that might cause involuntary churn when the client forgets to update their payment information. Carrier billing is also flexible enough to test different price points quickly and find the one that works.

To sum it all up, there’s no point on copying other business models’ since every business and client base is different. Test your heart out and find the right solution for you.

Modern direct carrier billing solutions support all the features that credit cards do (including discounts, free trials and their duration) with the added benefit of simplicity and bigger consumer reach. So if you want to upgrade your free trials with carrier billing, get in touch.

April news summary: what happened in the digital ecosystem?

April news summary: what happened in the digital ecosystem?

We hope the pranks played on you during April Fools’ Day were not too rough. Fortunately, the month is over for now and silly jokes can wait for a year. To get back to serious content, here are the news stories that caught our eye during the past month.

Beside the stories listed below, we also recommend to check out our Poland country profile, as well as the impact of spending limits on consumer spending, based on the example of Google Play and Telekom Slovenia.

General mobile

Payments

Digital Publishing

E-commerce

Digital content

Gaming

Data-driven mobile solutions paving the way for the future of urban mobility

Data-driven mobile solutions paving the way for the future of urban mobility

Note: This is a guest post by Marek Rannala, Mobility Statistics Product Manager at Positium. Positium is a data analytics company specialising in mobile positioning data for official statistics. They research location data to understand people’s activity spaces and improve modern statistics with timely and accurate data.

Cars have dominated urban environments around the world for over half a century. This situation has led to cities losing their human element, with the ever-increasing number of cars demanding colossal infrastructure changes to accommodate them, taking up public space, and having a harmful impact on people's health. Driven by modern data analytics capabilities, cities are looking for solutions to make mobility in urban areas sustainable. To do that, we need to understand the mobility of people.

Mobility is a complex combination of a multitude of factors, including human needs and choices. A personal car seems to have numerous advantages, making it impossible to compete with. As usual, simple stand-alone solutions will not help in the case of complex problems.

The latest promising solution is the concept of Mobility as a Service (MaaS) – a service that helps a person to use an optimum combination of sustainable travel modes: public transport, rental bicycle, scooter, taxi, carshare, rental car and an unlimited amount of walking. The service takes care of planning the trip using a combination of travel modes and allows the user to pay for it within a single mobile app and even subscribe to a monthly service.

The one-trip service comes in handy especially for tourists and visitors, as you just need to install the app and start using it. As the first analysis of data from the Whim app in Helsinki has shown, users of the service are strongly inclined to sustainable travel modes; so the MaaS concept looks promising.

There is just one thing: MaaS requires good-quality public transport, with the accessibility and frequency of the service being key factors. This is where Positium comes in. Positium provides insights about where people stay and move, based on the passive positioning of mobile phones. This is basically the travel demand, independent of which travel mode people are using.

Traditionally, for public transport, the demand has been derived from ticketing data, registry data on homes and workplaces, and also from surveys, covering a percentage of the population. While nowadays electronic ticketing data provides information on public transport use (which is only part of the demand) in an efficient way, registries are still static, contain many types of systematic errors and cannot give any knowledge other than where people live (registered place of residence) and work.

Surveys are even more problematic. While it is increasingly difficult and costly to gather even a few percent of the population into a proper sample, it is also general knowledge that people are not very accurate in describing their own travel habits. Passive mobile positioning is based on anonymous mobile use data, aggregated into population groups with an accuracy of a mobile base station’s coverage area, eliminating privacy concerns.

This means that all the clients of a single or several mobile operators are included, giving a good random profile of a society. Also, the data is available 24/7/365 in near real-time, while providing a possibility to go back in time and monitor changes over several years.

The latest local example of putting all this into practice is designing a new bus route network and a public bicycle rental network in Tartu in 2018. The networks are designed to connect to each other, providing seamless and flexible mobility options.

In just one year, Positium provided information on the mobility demand, based mostly on mobile positioning data, and WSP Finland used the data to design a totally new bus route network. The number of lines was reduced from 27 to just 13, service frequencies increased up to 10 minutes, while retaining the same accessibility and annual number of bus-kilometres.

Both networks will be launched in July 2019. We are yet to see what the impact of a big data-based combined service will be in Tartu, but it is certainly a big leap towards making the MaaS concept available in Estonia. For monitoring the impact, again, ticketing data, mobile app data and mobile positioning data will come in handy.

What would be the takeaway from all this? Big data, mobile solutions and comfortable payment systems have the power to change the world in a way that has been impossible so far. Mobility is just one domain that is at the beginning of a transformation; in the coming decades, a lot of changes can be expected to occur in other domains as well. Be ready!

Read more about Positium’s solutions at www.positium.com.

Infographic: 4 services that should offer carrier billing

Infographic: 4 services that should offer carrier billing

By 2020, three quarters of the global population will be connected by mobile. Mobile phones are the device people carry with them all the time and use the most. Everything from shopping to watching TV to dating has moved to mobile.

Mobile payments are a natural choice for mobile-consumed content and on-the-go services as the payment device is already in the customer’s hand.

Here are 4 services that are a match made in heaven with carrier billing.

4 services that are a match made in heaven with carrier billing

Country data-sheet: mobile payments in Poland

Telekom Slovenije Google Play & Fortumo case study: doubling Google Play spend limits

This data-sheet gives a detailed look into the mobile payments landscape in Poland.

Poland has a population of 38 million people who all have mobile phones. Their smartphone penetration is as high as 70%. At the same time barely sixth of them have a credit card and the ownership is next to null for young adults.

In this report, we bring out data that helps navigate this region for digital merchants. We hope the report gives you a better understanding of the Polish digital ecosystem and helps you maximize the efforts of your payments strategy.

Enter your contact details below and download the paper immediately!

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