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The latest Open Vision-Chargeby 2022 Report He had. SaaS standards As a focus, I saw that I broached a topic I was curious about: reverse testing, a pricing model that gives SaaS companies a middle ground between freemium and free testing. Let’s investigate. – Anna
Binary choice?
As many SaaS companies embrace product-led growth (PLG), a sales approach where user conversions are driven by the product rather than the sales team, founders often face a pricing model dilemma. If their startup chooses a freemium model, most users won’t get a taste of the premium features reserved for paying users. But if the company offers a time-limited free trial, users who aren’t customers at the end of that period may be gone forever.
There are many other pros and cons to both premium and free trials.
OpenView partner Kyle Poyar told me, “Freemium models tend to drive more purchases and more subscriptions to your product, for example, while free trials have fewer subscriptions but a higher free-to-paid conversion rate.
As a result, founders often think they’re facing a binary choice, Poyar said. In an interview with the head of the development of air conditioning Lauren Eastford It tells him that these two choices are considered to prioritize user growth (with freemium) or revenue growth (with free trials).
But Poyar doesn’t think freemium and free trials are the only option. For companies to “get the best of both worlds,” he and OpenView support the reverse testing model exemplified by Airtable. But what are reverse tests and are they for everyone?
