# Free Plan

> A free plan is a subscription tier that offers basic product functionality at no cost to the user, indefinitely.

- **URL**: https://dodopayments.com/glossary/free-plan

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## What is Free Plan?

A free plan is a subscription tier that offers basic product functionality at no cost to the user, indefinitely. It is a common "freemium" strategy used to build a large user base and eventually convert them into paying customers.

### Why It Matters

- It serves as a powerful lead generation tool by allowing users to experience the product's value firsthand.

- It reduces the cost of customer acquisition by letting the product market itself.

- It creates a large pool of users who can provide feedback and help improve the product.

- It establishes a clear path for users to upgrade to paid tiers as their needs become more complex.

## Learn More

- [Pricing psychology tactics that improve conversion](https://dodopayments.com/blogs/pricing-psychology)
- [How to use value-based pricing in SaaS](https://dodopayments.com/blogs/value-based-pricing-saas)
- [Top pricing mistakes founders should avoid](https://dodopayments.com/blogs/top-pricing-mistakes-founders-make)