Users Hate Free Gifts
We were giving it away for free, so why wouldn't anyone take it?
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We ran an ambitious experiment this quarter (which also cost us a ton of engineering hours). The hypothesis was simple: if we give users a free "taste" of our premium features with a coupon, they'll try it out and naturally convert into a free trial.
0. Background
You might be thinking, "A 'free trial' is literally a free taste. Why would you need another free sample *before* the free trial?" Technically, you're right. But from the user's perspective, starting a free trial is basically scheduling a payment for 7 days in the future. Instead of feeling like they're getting something for free, it feels more like they're putting it on a tab. In the actual flow, tapping the "Start Free Trial" CTA brings up a checkout screen where you have to reserve a payment method via Google Play or the App Store. The drop-off rate on that checkout screen is incredibly high. The fact that a free trial doesn't actually function as a "free" experience for users is exactly where our "taste test" hypothesis began.
Alarmy's 'Prevent falling back asleep' feature is incredibly popular among our paying users, but it's hard to grasp until you actually use it. "After you dismiss your alarm, it waits a set amount of time and asks if you're really awake. If you don't answer, the alarm goes off all over again..." It's tough to explain in a single sentence, and even if we spell it out, it won't click for every user. Plus, while other premium features offer a lightweight "preview" function, it's technically difficult to provide a preview for 'Prevent falling back asleep,' so we don't. That's why we chose it as our very first test feature—we figured it would benefit the most from a "taste test." We targeted users who seemed to want this feature and offered them a 1-use coupon.
1. Expected Results
Here is the scenario we anticipated:
[Before]
"Oh, this looks like a feature that'll definitely wake me up. I should try it!" → (Purchase screen appears) "Ah, I have to subscribe. Let's do the free trial." → (Checkout screen appears) "Ugh... reserving a payment is a bit much..."
→ Drops off at checkout
[After providing the coupon]
"Oh, this looks like a feature that'll definitely wake me up. I should try it!" → (Purchase screen appears) "Ah, I have to subscribe. Let's do the free trial." → (Checkout screen appears) "Ugh... reserving a payment is a bit much..."
→ (Coupon offered) "Oh, I can try it out once. Let's do it!"
→ (After using the coupon) "Wow, this feature is amazing! I'll reserve the payment and use it for 7 more days!"
→ Starts free trial and reserves payment
The variable here was, "How much can we increase satisfaction with just a 1-time taste test?" We kept in mind that we might need to bump that up to 2 or 3 times depending on the results, so we built it in a way that made increasing the coupon count straightforward.
But our beautiful scenario was shattered in a place we never expected.
Users wouldn't accept the free coupon.
2. The Actual Results
We had two flows for providing the coupon: Plan A and Plan B.
Only the messaging differed; either way, tapping the CTA would grant the free coupon. And right here, the percentage of people who actually tapped "Get Coupon" or "Check Gift" was absolutely abysmal.
Even though we explicitly told them they could use a premium feature for free, over 50% of users rejected the opportunity.
In the case of Plan A (the normal coupon) in particular, about 70% of users turned it down. Even if the free trial conversion rate of the users who did use the coupon had increased, the absolute number of users who actually claimed it was so tiny (around 30% of our target audience) that the overall impact was equally tiny. I mean, we were giving it away for free—why on earth wouldn't they take it?
3. Free = Suspicious(?)
This might be hindsight speaking, but looking at the results, some familiar experiences belatedly popped into my head.
Like how countless commerce apps pitch me freebies and discount opportunities every single day, yet I've never once taken them up on it.
"You've won," "Congratulations," "Here's a discount," etc...
These phrases have become the daily bread and butter for basically every app out there. If you take them at face value, you almost feel like a sucker. "Sure, they say it's free or heavily discounted, but the moment I try to claim it, they're going to make me meet some ridiculous condition to open my wallet." Or, "Whatever this is, it's going to annoy me or at least rub me the wrong way." Thoughts like these make those messages incredibly unappealing.
4. But We Were Sincere...
Unlike the average hardcore salesperson, we didn't ask for anything in return—we were offering it 100% for free. So, honestly, we felt a bit wronged. But it didn't matter how sincere we were. No matter how pure our intentions, if it looks suspicious or shady on the outside, it's totally useless. This was a failure on our part to think about the product spec from the user's perspective.
5. Now, Let's Ask for a Fair Price
We originally thought that asking users to pay a "price" for the coupon might give us some immediate gain, but would ultimately be a bad move that lowered participation. However, looking at the results, asking for something in return actually seems like a great way to generate value while simultaneously increasing user participation. We'd get something out of it, and the conversion rate goes up. There's no reason to say no to a flow like that.
For example, instead of just handing out a coupon, what if we said, "Use our app for 3 days in a row, and we'll give you 1 coupon as a reward," or "Introduce our app to a friend and get 1 coupon"? If we set conditions that feel like a "fair trade" through a simple simulation, it might lead to a decent conversion rate. Since we'd be getting something in return, it's an immediate win for us, and the coupon participation rate would surely settle higher than the abysmal 35%~45% we saw when we asked for absolutely nothing. It's bound to yield better results than just handing it out for free.
"Have people just been scammed their whole lives?"
Maybe we all get scammed a lot more in life than we realize.
Let's keep in mind that excessive goodwill and generosity can easily backfire, breeding suspicion and misunderstanding.