Lately there’s a lot of talk about how the free trial is dead. In fact, it is in the health and beauty vertical, most specifically the product acai, where the keyword “free trial” has become synonymous with “scam,” “easiest to convert”, and “death to the hardsale.” Well the good news for affiliates, networks, and most importantly the consumer is that free trials are here to stay and are now widely marketed with scruples in mind.
Before we delve into the new wave of free trial, let’s rewind the clock back to 2001 and take a closer look at how the free trial made its way into the health and beauty vertical. Does anyone remember Steve Warshak, creator of Enzyte Male Enhancement, well known for the smiling Bob commercials? Well Steve discovered early on that nutracueticals, when advertised on a free trial basis, sell at unbelievably high rates. He also discovered that when you hide the rebill terms from the consumer and make fictitious claims about your product line that you can sell way more of it. Steve would later realize that his unscrupulous marketing methods (fictitious claims and hiding billing terms from customers) would not only harm thousands of consumers, it would also land him in prison for 25 years. See GQ Article.
Followed by the downfall of Steve Warshak, several mini-me’s would follow suit. In 2009 we witnessed the explosion of free trial in the health and beauty vertical with the massive popular Acai Berry. With official endorsements by stars such as Oprah and Rachael Ray, affiliate marketers quickly jumped on the trend and realized unprecedented conversions. Several affiliate marketers started creating their own offers, building out kick ass landing pages that just about broke every FDA, FTC, and Visa/Mastercard policy. These marketers were able to procure processing from every bank via websites that were totally noncompliant, with no credit, and without a simple pro forma. It reminded me of the real estate loan crisis in 2003-2006, a time when 20 year old college dropouts were getting approved for million dollar plus loans with less then 10k in their bank accounts.
What was the final disposition of all of the Acai Marketers? 99% of them lost their MIDS, most were sued by the FTC, and some went to prison. The moral of the story: you can only win at this game by providing true value to consumers, and those that don’t will eventually fail.
In the current zeitgeist it is nearly impossible to obtain a merchant account for continuity billing onshore let alone offshore. Just like the curtailment of the loans to unqualified applicants, banks will no longer issue accounts to unqualified merchants. Of course there’s still the 90 day and out merchant: the merchant uses a sponsor for an account for a shoe-in approval product (such as an online clothing store), only to use the account for a free trial with hidden conditions. These accounts result in a summary TMF (terminated merchant file, thus eliminating the sponsor from ever receiving a merchant account again) and the funds are held for a period of 6 months or more. The FTC is now freezing the funds of these merchants and very rarely will they receive the reserved funds once the campaign is frozen.
With that, the serious players in continuity have discovered that they can win in the long run by adhering to the following best practices:
- Creating superior landing pages that provide the consumer with the perception of quality from the beginning.
- Providing the consumer with a quality product, packaged professionally with pamphlets that further improve the perception of value.
- Clearly and conspicuously stating the trial terms, while at the same time offering the consumer options with hardsales on the same page.
- Providing easy methods for the consumer to cancel their trial such as professionally trained call center reps.
- Instock orders that are shipped quickly with delivery confirmation.
- Sophisticated CRMs empowering the business, such as Lime Light and other’s that we provide in our Rolodex: http://www.healthconverter.com/articles/health_converter_rolodex.php.
We commend advertisers such as Gary McNelley over at Market Health that have set the standard in our industry. His Acai Berrry Select Formula has been running well over a year now without interruption. No, this offer does not convert at 20% ratios like several of the historic sites that hid the rebill terms. Yes, Acai Berry Select completely covers the above best practices!
Free Trial 2.0 is finally here and it’s here to stay. Those merchants in the space promoting hardsales should not expect volume anytime soon. Instead of fighting against what affiliate marketers want, listen to them and create a legitimate trial offer that will allow the consumer to try your unbranded product before they buy. Unless you have the capital to invest in branding a hardsale outside of the internet, then do not waste your time trying to introduce a non-branded offer to the net on a hardsale basis – The Free Trial Will Crush You.
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