The Challenge of Retaining Customers Acquired with Free Trials

For your marketing

Possible founder application

Track post-trial retention and value by acquisition cohort, and test onboarding or communication interventions. Do not assume free-trial signups have the same economics as organically or sales-acquired customers.

Reported result

What the study found

Average lifetime value for free-trial customers was 59% lower than for regular customers in this setting. Trial-acquired customers were more responsive to marketing communication and usage, suggesting opportunities for targeted retention activity.

Research question

What the authors investigated

How do customers acquired with free trials differ from regular customers in retention and lifetime value?

Design

The authors analyze household panel data from a digital television service and model differences in usage, marketing responsiveness and customer lifetime value.

Sample and setting

Households using one digital television service; the abstract reports a comparison between trial-acquired and regular customers.

Scope and transfer

Limitations to keep in view

One digital television service and its historical trial design. The reported CLV gap is not a benchmark for SaaS; acquisition cohorts may differ in ways specific to the service and period.

Research sources

Journal of Marketing Research abstract and accessible author manuscript; setting and headline CLV difference are reported by the publisher.