Free Trial vs Freemium and what are the differences and which is better

Free Trial Vs. Freemium – What are the Differences and Which is Better?

Consumers love anything that’s tagged with the word “free.” It’s a stimulus that triggers whenever they see a product or offer that has that word in it. As business people, we need to make the right offer to our valued customers. That’s why we need to understand the difference between a “freemium” and a “free trial.” Should you go for one or the other? That’s a question that this article will hopefully answer.

What is Freemium?

A portmanteau between the words “free” and “premium,” freemium is a customer-acquisition strategy by which a proven and fully-functional product or service is provided at no charge (free). However, the catch is that you will pay (premium) for additional features or services. These features or services will then expand the functionality of the free version. In order to qualify as a true freemium, the product or service must be available completely free of charge and must be of value as a standalone, free product or service.

Some good examples of brands with freemium offers include Google, Dropbox, Adobe Sign, ReliaBills (more on that later), and more. These online products are entirely free. All you need is to sign-up for an account. However, for you to access some of their other features, you’ll need to pay for them. Google Drive, in particular, is 100% free. You can store as much as 15 gigabytes. But if you’re planning to store beyond that capacity, you’ll need to buy storage. Video games also have a freemium element. Some games are 100% free. But for you to access premium content like virtual items, or other content, you’ll need to pay for them.

What is a Free Trial?

A Free Trial is another customer-acquisition strategy wherein a product or service is offered to customers for free for a limited time. The purpose is so that they can start learning about the product and discover its actual value before they can actually start paying for it. It’s a manner of giving a target user a first impression of the product or service before giving them the option to continue using it in exchange for a fee. So not only will you be able to persuade potential customers, but you can also get feedback from them.

The free trial often provides users free and unhindered access to some notable features of a product or service. All they need to do is register an account, provide their email, or add their credit card details.  After the trial period has expired, the user will have to pay the regular fee if they want to continue using the service. A basic example of a free trial would be a gym membership. You may offer 30-day free access to all the equipment and get customers a good feel of the place. The intent would be at the end of the trial period; wherein the member will elect to continue access through a paid membership.

In the software industry, many free trials only have limited features available to the user. The reason is that anything more may incur hard charges when activated. As a result, the software may not be as enticing and be of little or no true use as a trial.  However, it can either discourage users or spark their curiosity and pay to get full access. So in the end, it’s still a win-win situation for you.

Which is Better?

Truth be told, it’s really not a matter of which offer is better. Both freemium and free trials are beneficial in their own way. Each model works better for different products and marketing structures. At the same time, it’s also a matter of market and consumer preference. For consistency, let’s stick with software as an example product or service that works splendidly with both freemium and free trial. However, it will depend on your particular way of marketing.

For it to be a successful Freemium, the free must be of value as a standalone version.  The entire product must be designed and built around this model – it cannot be an afterthought. At the same time, there must be a compelling feature to make it logical for users to pay for the premium version.  Otherwise, you’re just giving away software for free, which will hinder your capacity to revenue from your product.

On the other end, most software is offered as a free trial. The common term is around 14 days. During this free period, much of the functionality remains locked. But the catch is that users will have the opportunity to try it before they buy.  They can either wait for the duration of the free trial or end the free trial abruptly and start paying for the premium version.

As you can see, both freemium and free trial functions differently. But no matter what option you choose, you will always benefit from it. So, again, it’s not a case of which is better; but which will suit your marketing structure.

How Does ReliaBills Relate to this Matter?

ReliaBills has chosen the Freemium model, and for two reasons:

  • First, 14 days is not enough time for you to get a good feel of a product. ReliaBills is an accounting-related software. Understandably, evaluating other types of software takes time. Software trials with fixed periods are simply not enough time for someone to make a buying decision.
  • Second, and most importantly, the product and our customers’ needs seem to lend itself perfectly to Freemium.  Most small businesses need a simple yet effective professional method of preparing and sending their invoices.

Digital statements created in Word templates seem to be the most common trend. ReliaBills offers a free, alternative option for preparing your invoices – one that’s proven to be more effective and less of a hassle.  Once you have become an efficiency master at sending professional invoices, the natural progression is the desire to get paid. That’s when the premium comes into play. By upgrading to ReliaBills Plus, the software makes sure that you get paid even faster by automating your invoices, sending them to your clients, and transferring the funds directly to your account. It doesn’t get any better than that.

Our Recurring Billing Feature

Whether you choose free trial or freemium, know that the only thing that matters is incorporating recurring billing into it. Recurring billing plays a relevant role in whatever customer acquisition strategy you use, so make sure you take advantage of all the perks that come with it. There’s a reason why subscription services and recurring billing models are prevalent in today’s business trends. It offers a plethora of features that will prove beneficial to your business.

How Does Recurring Billing Relate to Free Trial & Freemium?

Free Trial

A potential customer signs up for a 30-day free trial plan where they can get access to all the features that your service offers without charge. At the end of those 30 days, the customer has converted automatically into a paid monthly plan via recurring billing. 


A potential customer signs up to use the basic level of your product or service. Since it’s the basic version, the customer is free of charge. However, if they ever want to upgrade to an even better plan, they will have to subscribe to the ‘premium’ version of your product/service, to which they will be charged a fee that corresponds to the price of the new plan. Once they do, they will then be billed per month – or according to the period that they indicate during registration – automatically via recurring billing.

Is My Business Fit for Recurring Billing?

Recurring billing is one of the leading strategies in the business sphere, especially for SaaS providers. Right now, the trend isn’t limited to just that sector alone. If you want to know if your business fits with recurring billing, here are three important things you need to know before you go further:

Your Product/Service Needs to Work With Recurring Billing

The first challenge is making sure your product or service warrants recurring billing. Companies that successfully implement recurring billing tend to have a built-in tilt towards subscription. A great example would include Netflix and Amazon Prime. Both companies gear towards requiring their customers to subscribe to keep their services; thus, implementing recurring billing in the process since they’re billing their customers automatically per month.

The bottom line is that if you want to implement recurring billing into your business strategy, you need to determine if you can implement a subscription basis to your product or service. By doing so, you can then use recurring billing software like ReliaBills to bill your clients automatically. 

Set Up Can Be Costly and Time-Consuming (Depending on Your Provider)

Setting up subscription billing can either cost you nothing or a lot of time and money. It will depend on the provider you acquire. For instance, if you create a free ReliaBills account, you can access its automated recurring invoicing feature, which is available on the free version. That means you won’t have to spend a dime to gain access to recurring billing. However, suppose you want to get additional features like consolidated invoicing, snail mail, auto collection notifications, and more. In that case, you will need to upgrade your account to ReliaBills Plus, which has a $24.95/month price tag. 

Compared to other recurring billing options, ReliaBills has the most reasonable price that will bring a ton of value to your business without breaking the bank. On the other hand, some recurring billing options have fees as high as $1,800 (Stripe, for instance). So, if you want the best recurring invoicing option that won’t cost you an absurd amount, try ReliaBills today.

Provide an Experience

All successful recurring billing services have a lot in common. They get many things right by offering great deals to go along with their unique products and services. At the same time, they are also very convenient and what they offer is – in most cases – somewhat necessary.

Despite all that, there’s an even deeper level. It involves a psychological aspect that will make their subscription services attractive and compelling: experience. An excellent example of this is Dollar Shave Club. The company understands men’s need for shaving their facial hair. So for just a few dollars a month, subscribers can get their razors and other shaving essentials mailed to their doorstep. Think of any other company that does that, and you’ll realize why DSC is so successful at what they do.

If you want to successfully incorporate recurring billing into your business, you need to think of something unique that will keep people coming. The idea is to get more people to subscribe to your business to ensure your recurring billing investment is worth it.

Of course, recurring billing has its fair share of challenges. Limited functionality and flexibility, and complexity are some of the downsides of incorporating a recurring billing process. However, we guarantee that if your business fits well with this billing method, you’d see that the pros far outweigh the cons. So, whatever customer acquisition strategy you choose, know that recurring billing will play an essential role in your choice. So make sure you take advantage of it by using the ideal billing platform.

For more info, go to  You can also call 877 932 4557. Make your invoices hassle-free today.

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