Nowadays, it’s very rare that anyone pays for a product or service on day one. New customers often get the first week or month free, the first few gigabytes free, or another way that allows users to try the product before they buy.
The offers are designed to look generous, and they are, but in reality, they’re hoping to pull you in and through the door, as the cost to acquire a customer vs. the cost to retain a customer have two different price points.
Marketing Methods
Free trials are among the best-known methods to bring new customers through the door. Spotify Premium in the UK, for example, costs £0 for the first month and £12.99 afterwards. Users can cancel at any time, and it is only open to those who have never registered a Premium account before.
What’s the best music app ⁉️ Spotify, Apple Music, or YouTube Music 😇 #music #Android #Apple https://t.co/ETMF1L3bgn
— thetechwiz (@thetech_wiz) June 14, 2023
Bundled trials are also popular. Apple gives buyers of a new iPhone, iPad, or Mac three months of Apple TV and Apple Music for free once the device is activated. They’ve already won your trust with a new device; they’re now trying to retain you in their ecosystem.
Apple Music or Spotify? https://t.co/9p2VM7vZ6J
— Apple Hub (@theapplehub) June 13, 2023
In the iGaming sector, players can find online casino promotions like welcome bonuses. Some platforms offer free spins welcome offers. For example, some new customers could get 150 free spins if they deposit and spend £10. The goal here is to reward new users with something that will benefit their experience with the platform.
The hardest sale is the first sale, so making the first transaction more appealing helps lower that barrier. From there, the businesses can focus on retaining you, either through better experiences or more offers, depending on their strategy.
Why They Work
Each of these offers enables the customer to try the product with minimal risk. It takes away the question of “is this worth the money?” and replaces it with “I’ll try this out to see if it’s worth the money”. The product itself then does the selling, which, if the targeting was right, should be a perfect match for the new user.
The problem with selling anything, whether a product or a service, is the unknown. Because of this, businesses try to lower this barrier so new customers can experience their offering for little to no price. For a consumer, it’s also a safer choice, as you can try a product or service out and determine whether it’s worth your money.
What the Offer Costs You
The fine print is what everyone needs to read before signing up for any deal, as it’ll tell you what the promotion actually costs. A Spotify Premium free trial, for instance, costs £12.99 a month after the trial is complete. Therefore, there is a cost if the trial isn’t cancelled, but by then, you probably can’t live without the product, so it works, and got you through the door.
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