How do I handle free trials in Zuora?

Endless Free Trial with the Option to Sign On for Paid Plan

The customer has a free trial to a basic version of the product which has a limited set of features and functionality. The free trial does not have an expiration date, and the customer can upgrade to a paid product at any time to access additional feaures and functionality. If they do not upgrade, they can continue to use the free trial version until otherwise notified by the service provider.

Time-Limited Free Trial with the Option to Sign On for Paid Plan

The customer has a 30 day free trial for a basic product and after 30 days, the customer is notified their trial is expiring and given the option to to sign on for a paid plan (for the same version of the product they were using or a premium version) in order to continue using the product. If the customer does not sign up for a paid plan, their access to the product is disabled.

Time-Limited Free Trial with Automatic Conversion to a Paid Plan

The customer has a 30-day free trial for a basic product and after 30 days, customer is automatically converted to a paid plan.

When a customer signs up for a paid subscription, you can offer them the option to be billed on a monthly, quarterly, semi-annual, or annual period. Or, you can define a customer period such as every 13 months.

Subscription Dates

To support free trials in Zuora, we recommend using at least two of the three subscription (billing) trigger dates. Zuora provides three different dates to give you flexibility and control over when your subscription charges to begin billing.

For example, the Contract Effective Date can be the date the free trial begins and the Service Activation Date is when the customer begins paying for the product. In this case, a customer who signs up on January 1, 2011 for a 30-day free trial will have a contract effective date of January 1, 2011 and a Service Activation date of January 31, 2011 (the day after the 30 day free trial ends). On January 31, 2011, the customer is converted to a paid product and are immediately invoiced and charged for payment.

Charge Model Type

When you create a subscription for your free trial, you will add products and charges to the subscription. The free trial product can be created using a flat fee charge model with a flat fee amount of $0. Alternatively, you can use a discount charge model to display the regular charge amount and a corresponding discount amount.

For example: charge is $10 and discount is ($10), total amount = $0 = free trial.  Whether you use flat fee charge model or discount charge model depends on your business rules and whether you want to show the customer the list price for the product in which they are getting for free during the trial period. The discount charge model allows you to control the duration of the discount, making it very easy to set a discount to expire after a specified period, for example, after one month, two months.

Example 1: 14 Day Free Trial with Automatic Conversion to Paid (Using Flat Fee Charge Model)

The customer has a 14 day free trial for the Bronze product package starting on January 1, 2011. After 14 days, the customer is automatically converted to a paid subscription for the same product billed on a monthly basis. At any time, the customer can choose to upgrade to either the Silver or Gold package.
 

1. Here is the subscription with the  free trial starting on January 1, 2011 (also the Contract Effective Date). This subscription begins on January 1, 2011 but does not start charging the customer until billing for the charge is triggered on the Service Activation date of January 15, 2011. By using two subscription trigger dates, you can track both when the free trial begins and when the paid subscription begins billing.
   
   

   
   
    

2. The bill cycle day on the customer account is set to January 15, 2011 so when the invoice is generated, the service period is aligned with the bill cycle day and the customer is billed for the full service period for $100 (rather than a prorated period)
   
   

   

   
   
   

   
    

Example 2: One Month Free Trial with Automatic Conversion to Paid (Using Discount Charge Model)

The customer has a one month free trial for a Bronze product package, starting on January 1, 2011. After one month, the customer is automatically converted to a paid subscription for the same product, billed monthly. At any time, the customer can choose to upgrade to the Silver or Gold package.
 

1. Here is the subscription with the  free trial starting on January 1, 2011 (the Contract Effective Date) and billing for the paid charge also begins on January 1, 2011 (the Service Activation Date). A discount is also provided for the first month of service using the discount charge model. This discount automatically expires after the first month.
   
   

   
   
    

2. This invoice shows the first month subscription cost of $100 with a discount of $100, resulting in the first month's subscription fees being $0 (free).
   
   

   

Example 3: One Month Free Trial with Option to Sign on for Paid Plan (Using Flat Fee Charge Model)

The customer has a one month free trial for the Bronze product package starting on January 1, 2011. After one month, the customer's free trial subscription term (set to 1 month) expires. Customer can renew the subscription for another 12 month subscription on a paid plan and customer chooses to renew with an upgrade to the Gold plan.
 

1. This is the original subscription with a one month free trial starting on January 1, 2011 and expiring on January 31, 2011. The term is set to 1 month and does not auto-renew.
   
   

   
   
    

2. This is the first invoice for the customer and shows a $0 charge since it's a free trial.
   You can control whether or not invoices with a $0 Invoice Total Amount are sent customers by selecting or de-selecting the option in your billing run (under Processing Rules) for "Do not email invoices with 0 Invoice Total."
   
   
   
   When the free trial expires, the customer decides to renew for an additional 12 month term and upgrade to the Gold plan. You will now create 3 amendments to remove the Bronze plan, extend the subscription term, and add the Gold plan. All amendments will have a contract effective date and service activate date of February 1, 2011; this is the date the paid plan begins.
   

    

3. Amend the subscription to remove the Bronze plan. Remember: The contract effective date and service activation date will both be February 1, 2011.
   
   

   
   
    

4. Next, create another amendment to modify the Terms and Conditions on the subscription to reflect an additional 12 month term. Remember: The contract effective date and service activation date will both be February 1, 2011.
   
   
    
5. Next, create another amendment to add a new product and add the Gold plan to the subscription. You can modify the price and QTY of the charge if it is different from the list price and QTY in the product catalog. Remember: The contract effective date and service activation date will both be February 1, 2011.
   
   

   
   
    

6. This is what the paid subscription will look like once you have completed the above steps:
   
   

   
   
    

7. Here is the first invoice for the paid subscription: