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One of my coaching students recently asked me whether it's better to offer a free trial or a $1 limited time trial as an incentive to sign up for a paid newsletter subscription.

The answer involves the vital role of tracking and testing throughout your entire sales funnel.

Generally speaking, a free trial is likely to convert more visitors initially, but the $1 trial may be the better choice over the long term. Such generalizations have little place in business. The only way to determine the right answer for your business is to track and test the process from beginning to end.

It's important to remember that conversion rates are only half the equation. What it comes down to is visitor value, not simply what is better for short term sign-ups.

Before applying the information to the free trial vs. $1 trial question, let's take at a hypothetical pay-per-click (PPC) campaign to illustrate the concept of visitor value with simple terms and calculations.

Say you spend $1,000 on a PPC campaign and generate 10,000 visitors. Also, say your salesletter converts at 1% and each sale is worth $50 to you. This means you generate:

  • 100 sales (1% of 10,000 visitors).
  • 100 x $50 each = $5,000 gross profits.
  • $5,000 divided by 10,000 visitors means each visitor is worth $0.50.

In a second campaign you choose to spend more for better keywords. You double your campaign costs to $2,000.

This time, the better keywords generate more targeted visitors, but you end up with less traffic and only generate 4,000 visitors.

On the surface, it looks like the smaller campaign brought in a better return, but it goes further than that.

Because the traffic from the second campaign is more qualified, the conversion rate on your sales letter will increase — perhaps double or even triple. Let's say 3% in this example. Now, let's do the math again. You generate:

  • 120 sales (3% of 4,000 visitors) at the same value of $50 per sale.
  • 120 x $50 each = $6,000 gross profits.
  • So, $6,000 divided by 4,000 visitors means each visitor is worth $1.50.

Once you've looked at the whole picture rather than the conversion rate alone, the picture changes. While you doubled your expenses in the second campaign, you tripled your visitor value and your overall profits.

Since the visitors were more targeted and qualified it's likely that these customers will stay longer, buy more and present less hassles in terms of refunds, returns and complaints.

So the LIFETIME visitor value will increase substantially, too.

Translating visitor value to the question of the free trial subscribers and $1 trial subscribers is a similar process.

Take your tracking beyond conversion rates and look at your entire funnel to determine the more profitable scenario for your business. Are the free subscribers or $1 subscribers more likely to convert into full membership?

Another element of testing and tracking through the whole process rather than focusing solely on conversion rates is that it will give you more information to work with so you can improve sticking points throughout the sales cycle.

A more comprehensive look at the process will show you exactly what is converting, where you can improve, and where your bottlenecks are.

For example, if you have a typical sales process with an opt-in page, followed by the salesletter, and then the order page, as well as an autoresponder series for those who opt-in but don't buy, you will learn:

  • Which page is converting (or not);
  • Where people “stumble” or leave;
  • What to improve and test variations of.

You will learn all that by tracking:

  • How many unique visitors opt-in.
  • How many buy from the salesletter.
  • How many buy from the order form.
  • And how many buy from your autoresponder follow-ups.

Knowing this can tell you where you ARE converting, and identify your biggest bottleneck.

For example, if you have 40% who opt-in, and 5% of those who opt-in click to the order form to buy, but only 1% buy, this tells you that your bottleneck is your order form!

A person who doesn't track may jump to the conclusion that the less than 1% conversion indicates a salesletter issue, where proper tracking would reveal that the issue is with the order form.

With tracking, you can clearly see that your opt-in and salesletter copy are indeed working, but for some reason, people are leaving once they hit the order form.

This is why it's important to look beyond conversions and develop a practice of tracking the entire sales process.

Whether your question is whether a free trial or $1 trial is a better choice or you are wondering whether a particular bonus is a good fit for your target market, you will find the answers through tracking and testing the entire sales funnel — and not just sales.

When you focus on the bigger picture, you can easily calculate overall customer value and identify weak links in your sales process.

Michel Fortin

Chief Experience Officer at Supportibles, Inc.
A copywriter and consultant for close to 30 years, Michel was instrumental in selling millions worth of products and services. His most notable success is a salesletter that sold over a million dollars online on launch day. Today, Michel is a best-selling author, in-demand public speaker, and highly sought-after marketing consultant. Get his free report, "The 10 Commandments of Power Positioning," at Supportibles.com.

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