Charge a Small Fee for Effortful Trials

Should you give free trials?

Well, it depends.

Imagine that you sell complex software. Without a financial cost to try it, customers search for behavioral costs:

• Hmm, free trial? Any reason not to try? Well, I'd need to learn how to use it.

In these scenarios, a small fee can boost signups because customers stay fixated on this low cost:

• Hmm, only $1? Sign me up.

For example, a large education company promoted their courses by discounting them between $0 and $10. For local courses, a small fee converted better than $0 (Fan et al., 2022).

Why? Because it distracted them from the effort of driving:

• Hmm, free course? Any reason not to sign up? Well, driving would be annoying.
• Hmm, only $3? Sign me up.

For online courses, a free promotion converted better because customers had no behavioral costs to justify rejecting this promotion.

Similar effects happened with a new vaccine for hepatitis C: More people signed up for a clinical trial when they needed to pay $0.73 (vs. free; Fan et al., 2022).

• Hmm, free? Well, it might be risky.
• Hmm, $0.73. That's super cheap. Sign me up.

Ultimately, give free trials when products are easy to try; otherwise charge a tiny fee to distract customers from the behavioral costs.

• Fan, X., Cai, F. C., & Bodenhausen, G. V. (2022). The boomerang effect of zero pricing: When and why a zero price is less effective than a low price for enhancing consumer demand. Journal of the Academy of Marketing Science, 50(3), 521-537.
• Mao, W. (2016). Sometimes “fee” is better than “free”: Token promotional pricing and consumer reactions to price promotion offering product upgrades. Journal of Retailing, 92(2), 173-184.