How to Prevent Free Trial Abuse

by Trevor

FEATURED_How-to-Prevent-Free-Trial-Abuse

If you’re like most SaaS products, you offer a free trial to new users. Research from Chart Mogul found that 97% of SaaS companies offer free trials, but only 39% offer a forever free tier. This shows that most companies use free trials to usher users into paid accounts.

There will always be people who never intend to buy your product and just want to get something for free. You’ll never be able to completely stop free trial abusers, but those people were never going to be customers anyway. It’s just something we have to deal with.

Nevertheless, it’s important to deter free trial abusers as best you can.

Free download: How Long Should You Make Your Free Trial?

What makes a SaaS product easy to abuse?

saas-free-trial-abuse

Some SaaS products are easier to abuse than others. You’ll attract more abusers if your tool meets any of these criteria.

  • The product is a low-touch tool (meaning anyone can sign up to your service without speaking to one of your representatives).
  • The product is consumer-facing (meaning you sell to people, not businesses).
  • Setting up an account is lightning fast.
  • Setting up an account does not require clicking a confirmation link in the user’s email account or in a mobile phone text message.
  • The product does not require any advanced or time-consuming integrations with other products; no special code needs to be created or an API accessed.
  • The product doesn’t require significant customizations or data imports.
  • The product can be used effectively immediately after sign up.

If your product meets any of those criteria, try changing something so it becomes less appealing to habitual abusers.

Understanding abuse

Your first step is to look at abuse critically, not personally. If people are abusing your free trial, it doesn’t mean they want to cause you harm. It usually means you don’t understand what they find valuable. What you see as abuse points are actually the customer’s value points.

Customer success expert Lincoln Murphy says it nicely: “So these ‘abuse points’ are where value is realized by the customer, at least from a functional standpoint; in this case, the functional standpoint is that they completed the ‘job to be done’ with the product.”

For instance, let’s say you charge $99/month for your product. You notice that the same users keep signing up with dummy email addresses and using your 30 day free trial. There is a chance that these users aren’t unwilling to pay you anything, but that usually isn’t the case. What these users are telling you is that they don’t believe your product is worth $99/month.

In this example, you can fix the problem by adjusting your pricing model, changing your free trial period, or improving your product so it provides better value. You should also find ways to demonstrate the product’s value so users understand the potential. You may even want to speak with one of the abusers to see what it is about the product that has caused their behavior.

Require a credit card

saas-credit-card-prevent-abuse

Many SaaS products allow users to create an account and use the tool with just an email address. After the free trial period, the account locks and requests that the user input a credit card to pay and continue using the product. At this point, some people will use a new email address to setup a new account with your SaaS and continue working for another free month (or however long your trial is).

You can work around this a bit by requiring a credit card when the user originally signed up. Notify the user that you won’t charge the card until the end of the free trial period, but that you need one immediately.

Another method is to lock certain features behind a credit card requirement. For example, an online store platform might allow users to experiment with features and set up their store for free, but launching the store (making it public) requires payment.

People who intend to buy the product (if they like it) should have no problem with this. If they decide the product isn’t for them, they’ll just go through your cancellation process. But users who never intend to buy the product at all will be deterred.

Will this requirement turn off some legitimate users? Yes, it may deter some people who honestly wanted to evaluate your product and ultimately reduce your number of signups, but not as much as you think.

Neil Patel, founder of Quicksprout, ran an experiment where he offered users A) a free trial with a credit card, or B) paid from the start with a money back guarantee. People preferred the free trial, even though it required a credit card at the start.

Requiring a credit card can improve your lead quality because you know your users are willing to pay. You’ll have to decide if a loss of those people is greater than a loss of potential abusers.

Create barriers for new account

Your other option is to create barriers that are difficult for users to overcome twice. Here are some ideas.

1. Require a mobile phone number

Most people only have one mobile phone number. They may live or work with someone who will let them use theirs, but there’s a limit to that. It’s possible to set up Google Voice numbers and forwarding, but that takes a lot of effort. When the user inputs a phone number, require that they return the confirmation code you send by text message.

2. Track user IP addresses

Set up an alert that shows if multiple accounts are created from the same IP address. This isn’t foolproof because some networks will show the same IP address for everyone using it. If you discover multiple accounts with the same address, you should do more investigating to see if they’re using the account in a similar way (same brand name, for instance).

3. Place a cookie on the user’s computer

You can install a cookie on the user’s computer that your application will check for during the account creation process. If your app recognizes the cookie, it should prompt the user to log into their other account. Cookies won’t stop everyone because they can be easily removed, but this tactic will impede users who don’t know how to clear their browser.

Change your app

If you’ve implemented any of those strategies but you still have problems with abusers, you can switch from a paid tier model to a paid usage model.

An example of this model is MailChimp. MailChimp allows anyone to use their service for free until they have 2,000 subscribers. After 2,000, the account begins to charge a fee that rises as the number of subscribers increase.

In this case, the whole point of MailChimp is to communicate with their subscribers. Users naturally want more subscribers. It’s possible to spread a subscriber list across a series of accounts so each account is beneath the free limit, but that would require a tremendous amount of work and organization on the user’s part. It’s easier to pay the fee.

Download this free resource to determine the proper length for your free trial.

If you can find a way to structure your pricing model so users only pay for what they use, you can closely tie the product’s value with honest use.

Kill your churn. Keep more of your customers. Get an invite to Retained.

Comment on this post