With the economic fallout of the COVID-19 pandemic encouraging customers to curb their spending, vendors are looking for creative ways to grow and maintain their customer base with recurring revenue models. One tried and true method is by offering free trials to attract new users, and then converting those free trials to paid subscriptions once the customers have experience the offerings’ value.

We see this model working especially well with streaming content providers, from entertainment platforms like Amazon Prime and Sling TV to fitness apps such as Peloton, Fitbit, and Nike. (And we’re starting to see it take off in retail, too, as apps like Klarna and AfterPay put a new spin on the old layaway model.) These companies are attracting new customers in tough economic times by removing the barrier to entry. And users can feel more confident investing in a paid subscription once they’ve had a chance to try the content— and discovered new favorite TV shows or workouts — than they would feel paying for an unknown quantity.

This sales model is effective — there’s no doubting that. But implementing it from a technological standpoint is easier envisioned than done. When businesses start adding multiple terms and tiers for subscription buyers, such as free trials, delayed payments, “freemium” add-ons and other special offers or variables, most traditional e-commerce systems struggle with the logistics. Conventional price codes for individual products become too unwieldy to manage, and so does keeping track of the variety of unique billing models and conversion timelines, just for starters. Successfully using a “try now, pay later” model to attract customers and increase revenue requires an agile billing system that allows businesses to adapt pricing models on the fly, without complicated programming or setup requirements.

Rolling Out Special Offers

Setting up a free trial model the “right” way can require some experimentation to discover what offers are most attractive to new customers. What’s the ideal trial duration? Which features do customers need to get acquainted with during the trial, and which ones can (or should) be reserved for the paid subscription? Businesses can experiment with time-bound special offers to entice customers, as well (“sign up for your trial today and receive a 10 percent discount on your first paid month” or “this weekend only, new members receive access to our premium features”).

All of this means that businesses need a billing system that can easily manage these experiments, changing offers and on-the-fly specials. They require an agile, easy-to-configure product catalog that can juggle all those new and changing offerings, and a platform that can keep them all straight, ensuring trials are ended on time, accurate bills are sent out and it’s easy for new users to convert to the paid models after their trials.

Converting Trials into Paying Customers

Of course, converting those free trial users into paid subscribers is the linchpin that makes the “try now, pay later” model work for businesses. Without that step, the potential opportunity is lost.

There are a couple of different ways businesses approach free trials: some require a credit card upfront and then automatically charge it once the trial is over, unless the customer opts out. Others don’t require a credit card and simply turn off access at the end of the trial unless the user opts in by providing payment information. The first option, requiring a credit card upfront, makes the conversion process easier, but it may deter customers from signing up for even the free trial. The second option removes all friction and incentivizes more folks to sign up, but it puts a bigger burden on the business to maximize the conversion rate.

Either way, there’s a lot of legwork that goes into converting those free trials into long-term customers: onboarding, reminders, lead nurturing to encourage users to stick with the business after the trial ends and more. And all of this on different schedules depending on when customers signed up and what promotions they may be taking advantage of. Legacy systems, already stretched by the complexity of the new models, may require significant manual intervention to handle these conversions. And, no matter how skilled the finance team is, that manual intervention is likely to lead to delays, errors and lost revenue opportunities.

Agile billing systems, on the other hand, are designed to automate these tedious, time-consuming processes, simplifying customer conversions and revenue collection and freeing up the finance team to focus on the bigger picture.

Managing Volume Growth

And finally, if the goal of “try now, pay later” is to grow the customer base, then it also requires a system that can handle increased volume without breaking a sweat. While legacy systems may require significant maintenance or even additional hardware to increase capacity, agile billing systems are designed to scale with businesses, empowering growth rather than hindering it.

Additionally, as user and event volume increases, automation becomes more and more critical. Both the automated conversions we mentioned above and the seamless integration with other systems in the back and front office. Older billing systems may have trouble communicating with other business platforms, leading back to manual intervention that adds time, cost and frustration to the billing process. But a billing system that plays well with others takes the friction out of growth.

Is your business looking to roll out free trials or other new models to attract and retain customers — during COVID-19 and beyond? The Gotransverse platform is built with agility, automation and growth in mind, and we’d love to talk about whether we’re the right fit for your organization. We invite you to take a tour of our platform today, and then call us to schedule your complimentary, personalized demo.