Why Free Trials Are a Great Way to Acquire Consumers?

One of the most powerful strategies is offering a free trial—a limited-time opportunity for consumers to use a product or service at no cost. Free trials have become a staple in industries ranging from software (SaaS) and streaming services to fitness programs and subscription boxes.

But why are they so effective? The answer lies in a combination of psychology, consumer behavior, and strategic marketing.

1. Free Trials Lower the Barrier to Entry

Spotify offers up to 3 months free for users to try its services

One of the biggest obstacles in acquiring new customers is their hesitation to spend money on an unfamiliar product. People fear making bad purchases, especially in subscription-based models where they might feel locked in. Free trials remove this financial barrier, allowing consumers to try the product risk-free before committing.

Example: Streaming Services

Netflix, Spotify, and Apple Music have successfully used free trials to attract millions of subscribers. By allowing users to explore their vast content libraries for free (often for 30 days), these platforms eliminate hesitation and create habit-forming behavior.

Harvard Business Review highlights that “removing upfront financial commitment significantly increases the likelihood of conversion, as users feel more confident in making an informed decision.”

2. Free Trials Leverage the “Endowment Effect”

The endowment effect is a psychological principle stating that people value things more once they feel ownership over them. When consumers start using a product or service during a free trial, they become emotionally attached to it.

Example: SaaS and Productivity Tools

Software companies like Grammarly, Dropbox, and Zoom offer free versions of their services that allow users to integrate them into their daily routines. Once the free trial ends, consumers feel a loss and are more likely to pay to continue using the service.

According to behavioral economist Richard Thaler, “people tend to overvalue what they already own or use, which makes them more inclined to pay for continued access.”

3. Builds Consumer Trust and Confidence

Consumers today are skeptical of marketing claims. They want proof that a product or service delivers on its promises. A free trial provides a firsthand experience, allowing users to test quality, usability, and benefits before making a purchase.

Example: Fitness & Health Apps

Apps like MyFitnessPal, Peloton, and Noom offer free trials so users can experience their programs without upfront costs. By showing real results and personalized benefits, these companies build trust and increase conversions.

A study by McKinsey & Co. found that “brands that offer free trials see a 20-30% increase in consumer trust compared to those that rely solely on advertisements.”

4. Free Trials Create a Sense of Urgency

Limited-time trials create urgency and scarcity, which encourage users to make a decision before the trial expires. Consumers are more likely to take action when they know they have a deadline.

Example: Amazon Prime

Amazon offers a 30-day free trial for Prime membership, giving users access to free shipping, Prime Video, and exclusive deals. As the trial nears its end, users feel a fear of missing out (FOMO), prompting many to continue their membership.

“Urgency in marketing drives action. When consumers know an offer is temporary, they’re more likely to make a decision,” explains Robert Cialdini, author of Influence: The Psychology of Persuasion.

5. Encourages Word-of-Mouth Marketing

When people enjoy a free trial, they often share their positive experiences with friends, family, or on social media. This word-of-mouth marketing increases brand awareness and helps acquire more users without extra advertising costs.

Example: Video Games & Software

Gaming companies like Epic Games and Steam offer free trials or free weekends for popular titles. Gamers then discuss their experiences on Reddit, Discord, and YouTube, leading to increased purchases and downloads.

According to a Nielsen report, “customers acquired through referrals have a 37% higher retention rate compared to those acquired through traditional advertising.”

6. Converts Free Users into Paying Customers

A well-structured free trial makes it easy for users to transition into a paid plan. Many companies use strategies like:

• Seamless upgrades: Auto-enrollment after the trial unless canceled (e.g., Netflix, Adobe).

• Premium feature lock: Giving free users limited access while highlighting premium features (e.g., Spotify, LinkedIn).

• Exclusive discounts: Offering a special deal to convert trial users into paying customers (e.g., Grammarly).

Example: Adobe Creative Cloud

Adobe offers a 7-day free trial for Photoshop and Premiere Pro, allowing users to explore their capabilities. Since professionals often integrate these tools into their workflow during the trial, they’re more likely to subscribe once it ends.

Forrester Research states that “free trials convert at a rate of 25-40%, depending on product quality and onboarding experience.”

7. Free Trials Offer Valuable Consumer Insights

Companies use free trials to gather data on user behavior. By analyzing how users interact with a product, businesses can:

• Identify which features are most popular.

• Improve customer onboarding and user experience.

• Segment users for better targeting and marketing.

Example: E-Learning Platforms

Platforms like Coursera and Skillshare track which courses trial users engage with the most. They then use this data to recommend relevant paid courses and improve their content offerings.

Gartner Research reports that “data from free trial users helps brands optimize their marketing and retention strategies, improving long-term customer value.”

8. Reduces the Cost of Customer Acquisition

Compared to traditional advertising, free trials lower customer acquisition costs (CAC). Instead of spending heavily on paid ads, businesses allow users to experience the value firsthand—turning them into paying customers organically.

Example: Direct-to-Consumer (DTC) Brands

Subscription box companies like HelloFresh, Birchbox, and Dollar Shave Club use free trials to hook customers. Instead of convincing them through ads, they let the product speak for itself, reducing marketing expenses.

A study by HubSpot found that “companies using free trials spend 30-50% less on paid advertising than those relying on traditional marketing methods.”

With WisePass, we’ve launched several trial campaigns with brands like Singha, The Glenlivet, and Hennessy. Our users have had the opportunity to join some events to listen to a brand ambassador and could also later on visit some venues where they could redeem a beer, glass, or bottle of the brand.

The brand Maybelline had also ran some campaigns as well with WisePass. In 2019, the company partnered with one of the venues in Ho Chi Minh City to let our users get 1 free lip stick.