{"id":227515,"date":"2024-07-28T22:54:15","date_gmt":"2024-07-28T22:54:15","guid":{"rendered":"https:\/\/userpilot.com\/blog\/how-does-a-free-trial-work\/"},"modified":"2026-04-03T10:49:03","modified_gmt":"2026-04-03T10:49:03","slug":"how-does-a-free-trial-work","status":"publish","type":"post","link":"https:\/\/userpilot.com\/blog\/how-does-a-free-trial-work\/","title":{"rendered":"How Does A Free Trial Work in SaaS?"},"content":{"rendered":"

What is a free trial?<\/h2>\n

A free trial<\/a> is a marketing strategy where customers can use a product free of charge for a limited period of time in order to determine its value.<\/p>\n

Free trials are very common in SaaS companies, where users want to see the outright benefits before investing in month-long subscriptions.<\/p>\n

How does a free trial work?<\/h2>\n

There are three main types of free trials: opt-in, opt-out, and reverse<\/strong>.<\/p>\n

Let’s take a closer look at each one in the sections below:<\/p>\n

Opt-in free trial<\/h3>\n

An opt-in free trial makes it possible for users to explore the product for a limited time without the need to provide payment details.<\/p>\n

A free trial with opt-in is the easiest way to attract a large number of trial users.<\/p>\n

The process is simple and fast, and users feel safe because they don\u2019t have to share sensitive details.<\/p>\n

There are two options available to the user after the trial ends: provide payment details to continue using the product or lose access to the platform.<\/p>\n

These are typically marketed as “no credit card information required” trials and get an average conversion rate<\/a> of 18%<\/strong>.<\/p>\n

The downside is that<\/p>\n

Opt-out free trial<\/h3>\n

In opt-out free trials, users must provide their payment information upfront and will be automatically charged at the end of their trial period <\/a>unless they cancel it.<\/p>\n

This has a much higher conversion rate of 50%<\/strong> because prospects who are willing to commit to their payment details are clearly more interested in your product.<\/p>\n

Reverse trial<\/h3>\n

Finally, reverse trials<\/a> are where non-paying customers of a freemium product are temporarily given access to its premium features. At the end of the trial, they are downgraded back to the freemium version<\/a> of the product.<\/p>\n

This strategy dictates that, once a user has already experienced the benefits of a paid subscription, they’ll be less likely to return to their freemium plan. After all, it’s harder to lose features you’ve already used than to miss out on features you’ve never tried.<\/p>\n

What are the benefits of free trials?<\/h2>\n

There are three main benefits of free trials:<\/p>\n

    \n
  1. Lower customer acquisition cost<\/a> (CAC).<\/strong> Most free trials lower the average customer acquisition cost<\/a> for a SaaS company. Free trials work by providing immediate access to prospects instead of going through the time-consuming and expensive process of closing sales through demo calls.<\/li>\n
  2. Higher conversion rate.<\/strong> Users are far more likely to pay for a product if they’ve already used it and experienced the value it provides firsthand. Manually vetting a product takes the guesswork out of the equation and reduces risk for the customer.<\/li>\n
  3. Increased credibility.<\/strong> It’s easier to build user trust<\/a> when you provide value (in the form of access to your product) before asking them to pay you. Making them part with their cash upfront could be perceived as a lack of faith in your product’s ability to solve their problem in the long run.<\/li>\n<\/ol>\n

    When should you use the free trial model?<\/h2>\n

    There are a few key scenarios where you should deploy a free trial model:<\/p>\n