30-day money-back guarantee instead of a free trial: higher LTV
Commentary byLiftArchiveOur analysis, not theirsTeaching.com replaced the free trial in its web funnel with a 30-day money-back guarantee, and revenue and LTV went up even though conversion dipped slightly.
COO Tim Dikun shared the result on the Sub Club podcast, published on the RevenueCat blog. No figures were given.
- Conversion rate: slightly lower. This is a negative on the top-line metric.
- Revenue and LTV: higher, so the drop in conversion was more than made up for.
- Refunds: few users asked for one.
- No exact figures were shared for any of these.
The change
The free trial is replaced by paying up front with a 30-day guarantee.
Simplified mockup drawn by LiftArchive from the shared screenshots.
Control
The web funnel offered a free trial before the first charge.
Variant
No free trial. Users paid up front, with a 30-day money-back guarantee.
Why it likely won
Our reading of the result, not the practitioner's claim.
- Every buyer pays on day one, so there is no trial-to-paid drop-off.
- Tim Dikun's view: sending only paid conversions back to ad networks lets their algorithms find more high-intent users.
- Those buyers were higher quality and stayed longer, which raised LTV.
Caveats: No figures, sample size or duration were shared. The test ran in a web funnel, so in-app results may differ.
Who ran it
Teaching.com ran this test. Source: RevenueCat blog (Sub Club podcast write-up). The numbers are theirs; the summary and commentary on this page are ours.
How to run this test on your app
- Hypothesis
- If we replace the free trial with a 30-day money-back guarantee, then revenue per user will rise because every buyer pays up front and ad networks learn from paying users.
- Primary metric
- Revenue or LTV per visitor
- Guardrails
- Conversion to purchase
- Refund rate
- Chargebacks
- Who should test it
- Apps that sell through a web funnel with paid ads and a trusted brand. It may not suit apps where users need to try the product before they believe it works.
Questions
Won't fewer people buy without a free trial?
A few fewer did at Teaching.com, but revenue and LTV still rose because buyers were higher quality.
Do lots of people ask for refunds?
Teaching.com said not many did. Track refund rate closely when you test this.
Why does this help ad performance?
With purchase-only signups, every conversion sent to the ad network is a paying user, so it can target lookalikes better.