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Many reasons come to mind when explaining why only a quarter of the editors have taken upon themselves to present a free offer/free trial.

First, offering free trials and free versions is far from being a mild and insignificant decision. The price being a key-element of the marketing mix in SaaS, a lot is at stake. While in a traditional model, the starting price of residential software is open for negotiation; prices for the Ondemand are displayed publicly, and if they are open for negotiation, there won’t be much of a difference between the original price and the negotiated one.

Consequently, one must be careful not to make a mistake when determining the starting price. Over and above, in order to determine the fair price, one must solve a complicated equation where several parameters intervene, such as the perceived value, the working capital, the operating margin and eventual range effects. As a result, marketing directors tend to flee from the bull entering the china shop that is the “SaaS free of charge” for they are scared of shattering an already tight and delicate device. They seem to be reluctant to running the risk that the free version of the offer might undermine the original offer, might cause the original offer to be less valuable.

Less valuable: when it comes to complex and innovative offer, the buyer considers the price as an indicator of the intrinsic value of the solution. “If it’s expensive, it’s worth it”. Therefore, a price zero is synonym of an offer that has no value. Mark Holman, President of Creekside Consulting: « Many users thought the stripped down version was as good as it gets and thought we were feature poor relative to competition, which wasn’t the case with our Enterprise Edition ». Less valuable again, when the free trial with no commitment is not successful and shatters the dream.

Nonetheless, the principle of price zero still has what it takes to seduce. In particular in the world of SaaS where free trials help reassure the buyer. Indeed, the buyer can be confronted to a complex solution (technically and functionally), that he can only perceived virtually, and for which efficiency depends on parameters of which he only has a limited knowledge (such as taking care of his network); the buyer also has to deal with packaged solutions (not very changeable/editable), and most of the time there is no expert by his side to present the qualities, attributes and defects, advantages and drawbacks. For the same reason, the offer with no obligation should be, in theory, thoroughly adapted to innovative solutions which lack references. Said otherwise, it is very useful to gain new market shares and to find new prospects in a context of new business…which is often the case in SaaS, since most of Ondemand softwares were launched only three years ago. Bertrand Lejeune, co-founder of Kadeal (http://www.kadeal.com/), a young solution for prospection that enables identifying and qualifying targets on the web, reveals that within two months the free offer (http://www.kadeal.com/fr/prices) generated more than 18 000 visits and 560 free subscriptions. Moreover the company has already registered about 30 conversions toward a non free subscription.

Same conclusion for Hervé Gonay, CEO of Smartline. Smartline launched the solution Webleads Tracker (http://www.webleads-tracker.fr). Webleads Tracker is an Intelligence solution for e-marketing B2B and for Scoring Comportemental which provides, on the fly, detailed information about companies that visit a website.

Originally, Webleads Trackers was launched under a free version during 30 days. “When you decide to go into SaaS, you have to spark off the market; hence the time limited free trials. Free offers have generated several leads and were useful in segmenting the market and identifying its expectations. In this case, we have realized just how much Webleads Trackers relied on its associated service, in particular in terms of results analysis. Understanding who browses through your website is merely the first step. The second step requires human intervention in order to go deeper in the analysis and make the most of it. We have reached a new level where free trials were replaced by other devices, such as Satisfied or Reimbursed which revealed itself as an excellent compromise between commitment and free of charge ».

In addition, “The free trial also acts as an accelerator of the buying process” says Alain Garnier, CEO of Jamespot (http://www.jamespot.pro/), which provides a solution of the same name for social network for enterprises.   »Indeed, free trials have enabled a faster familiarization, but also a confirmation of the promise announced by the software provider (ease of use, advantages…) It leads some policy makers to rethink their organization.”

Coming next: (3/3) Freemium and SaaS, don’t improvise

Written by Philippe Guiheneuc, SaaS Guru expert, in collaboration  with Marine Simon, Philippe Khattou, Hubert Senant and Thierry Bayon