When forgotten trials roll over into paid subscriptions, loyalty can suffer

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Dive Brief:

• About 4 in 5 U.S. consumers have forgotten to cancel a free trial and were later charged for the service, according to a survey of 2,000 people released last week by Dimers.

• One-quarter of respondents say they have forgotten to cancel at least one free trial, and 1 out of 8 say they have accidentally remained subscribed to at least two.

• A forgotten trial switching over to a paid subscription “can be a very negative experience for customers,” Rachel Sheriff, chief customer officer at Recurly, told CX Dive. “I think customers today are very suspicious of subscription businesses that do try the element of surprise lock-in.”

Dive Insight:

When customers sign up for a free trial, it’s not a sign of true loyalty. However, it can be the start of a positive relationship — provided businesses keep communication open and develop the relationship.

When customers don’t see much value past the free trial period, they’re unlikely to develop a relationship with the brand, according to Sheriff. 

In addition, the rate of customers that convert after a free trial is on the decline. In 2021, free trials led to paid subscriptions 47% of the time, according to data from Recurly. That number fell to 34% last year.

That doesn’t mean free trials can’t work, according to Sheriff. Brands just need to work harder than they have in the past.

“It’s a great opportunity and a great way to try to open that door for loyalty,” Sheriff said. However, the brand’s actions after the free trial starts are what actually builds that loyalty.

The key is understanding your customers so you can tell them why a full subscription would be beneficial for them, according to Sheriff. Whether it’s content, products, services or other features, it’s about personalizing communications to show the customer why they should stick around and become a loyal customer.

On the other hand, brands that quietly turn a free trial into a paid subscription can create a very negative experience for customers.

“Today’s customers really expect a very clear, visible path to cancellation, and when you don’t do that, I think that you are probably ruining your chances of having them be a customer ever again,” Sheriff said.

Lapsed trials have a cost consumers can recognize. The average U.S. consumer reports spending $45 per month on forgotten free trials, according to Dimers. The average charge for a consumer’s most expensive forgotten trial is $87.

Many customers drop in and out of subscription services, which means the right communication at the end of a free period can be a loyalty driver, according to Sheriff. There may come a time when they’re ready to pay for the full service — and they’ll remember how they were treated at the end of the trial.

“Even if they choose not to move forward, it’s just another engagement moment in the relationship with your customer, and I think that it’s important to continue that conversation as much as you can,” Sheriff said. “[Even if] a customer on your platform has chosen not to sign up, I think that you can start building a relationship.”