How To Build an Effective Free To Paid Conversion Strategy
How do you build a successful free-to-paid conversion strategy for your SaaS?
This is a question every customer success manager must address in order to turn free users into paying customers.
In this article, we’ll share practical tips on creating a successful free-to-paid conversion strategy and converting free trial users into paid users.
- The free trial conversion rate is the percentage of users that upgrade from a free trial to a paid account.
- 15% is a good free trial conversion rate for SaaS products. In the B2B space, it’s a 25% conversion rate.
- There are four different types of free trial models in SaaS: freemium, opt-in, opt-out, and reverse trial.
- Freemium offers permanent access to a free version, with advanced features saved for paying users.
- The opt-in trial method provides full access for a limited timeframe without requiring credit card details.
- Opt-out free trials require payment information upfront, which can be a turn-off for some customers.
- SaaS reverse trial gives users free access to the premium plan for a limited period, after which they can choose to buy or downgrade.
Here’s how to create a successful free-to-paid strategy:
- Prioritize top features in your free trials based on product usage data.
- Experiment with different trial lengths to find the best one.
- Focus on minimum viable onboarding to quickly deliver value.
- Personalize the experience for each user persona.
- Collect feedback and continuously refine your strategy.
Tips for converting free users into paying customers:
- Remove friction in the user journey to prevent users from churning.
- Use checklists to prompt users to complete key actions and offer in-app guidance to help them achieve success.
- Offer live demos during free trials and create engagement loop to keep users hooked.
- Provide self-serve support through a knowledge base and use gamification to make the trial experience more enjoyable.
- Leverage social proof through testimonials and case studies and encourage users to upgrade at the right time.
- Send trial-ending notices to remind free trial users about the benefits of upgrading before their trial phase ends.
- Ready to build your free-to-paid conversion strategy? Userpilot can help. Get a demo now.
What is a free trial conversion rate?
The free trial conversion rate is the percentage of users that upgrade from a free trial to a paid account. It measures the number of users who become paying subscribers at the end of their free trial period.
What’s a good free trial conversion rate in SaaS?
There is no specific benchmark for defining a good free trial conversion rate for SaaS products. It varies depending on the industry, product, and trial model.
However, a 15% paid conversion rate is considered a good score for SaaS products. Target a 15–30% free trial rate if your product is new.
If you’re in the B2B industry, aim for 25%. A 30% conversion rate or higher is excellent.
But if your product is already on the market and has an opt-out free trial, aim for a 50–75% free trial conversion rate.
Types of free trials in SaaS
Providing a free trial is an excellent way for your product to sell itself. But what free trial model should you use?
Let’s discuss different SaaS free trials and how to utilize each one without tanking your conversion rate.
In the freemium model, users get permanent access to a free version of your product, while the premium features are reserved for paying customers.
Usually, the idea is for trial users to get a taste of your product and its benefits in hopes of driving conversion.
Software companies using this model need to make sure that users know exactly what they’re missing out on by using the free version of the product.
Hence, you must ensure that your paid features provide compelling benefits to make them worth the investment for freemium users.
Opt-in Free trial
Opt-in trials give users access to all the features of the product for a limited timeframe without sharing their credit card details.
Companies using this model encourage free trial users to build trust in their products without subjecting them to the burdens of a financial commitment.
The primary focus is to help the free user get the most out of their opt-in free trials and experience product value before their trial period expires.
Opt-out Free trial
In the opt-out trial model, users are required to share their payment information upfront. Putting a paywall upfront is a turn-off for most customers but could be more beneficial in attracting quality leads into your sales pipeline.
This model works best for trustworthy companies that have established their products’ benefits in the market.
The SaaS reverse trial combines freemium and free trials to give users the full “premium” experience for a limited period. In a reverse trial, all users are given free access to the premium plan when they sign up to use your product.
At the end of the trial, they can either buy or be downgraded to a free plan. This strategy is effective because once users get used to the premium experience, they will not want to go to the bare minimum.
How to create a killer free-to-paid conversion strategy?
In this section, we’ll discuss how to create a free-to-paid conversion strategy to convert free users into paying customers.
Identify and leverage your top features in your free trials
Before designing your free trial strategy, you need to figure out what features to include.
Analyze your existing product usage data to see which features paying customers love most. Alternatively, you can tag features to see which ones are used mainly by your power users.
Offer these features in your free trial offering, but don’t give them all away for free. You can either limit the usage of certain features, give access only for a limited period, or add a watermark to convert trial users.
Experiment with different trial lengths
How long should a free trial period last to maximize the trial conversion rate? There’s no magic answer. To determine the best trial period, first, experiment with different trial lengths.
Keep an eye on user behavior to find out the average time it takes to build a habit around the core use case of your product.
How soon do they experience the Aha! moment and reach the activation stage? What key actions must they complete at the onboarding stage? Take note of all these.
Use the trial conversion data gathered to find a sweet spot. If the trial is too short, your users may not have a chance to reach the Aha! moment; if the trial is too long, then you delay monetization.
Focus on the minimum viable onboarding (MVO)
It’s in the primary onboarding process that users get the most value. This is where you educate them about your key features and how to get value from them.
To optimize the trial onboarding experience, prioritize features that help users reach their Aha! moment faster. Focus on these core features in the early stages of onboarding before introducing more advanced features.
For a consistent minimum viable onboarding, a well-designed playbook outlining critical steps is essential. You can take our user activation onboarding playbook at Userpilot as inspiration for designing yours.
Design a personalized experience for each user persona
Different personas use different features in your product to solve problems they’re experiencing. Personalizing the experience makes it easier for each persona to derive value and justify paying for your software.
To personalize your product, start by customizing the onboarding experience for each user persona. You can trigger welcome modals to collect user data, including the job-to-be-done, location, etc.
Effective personalization is possible through segmentation. Group users based on shared characteristics like location, user behavior, JTBD, etc., to create better experiences for each user segment.
With a product tool like Userpilot, you can personalize and segment users for each persona based on factors listed above and more.
Collect feedback and improve your free-to-paid conversion strategy
A successful free-to-paid strategy is not a once-and-done deal; it requires continuous optimization. As you test different approaches and tactics, you also need to monitor user behavior and conversion metrics closely.
After customers complete their trial period, you can send a transactional NPS survey to ask their opinion on your product. Follow this up with an open-ended qualitative question to understand the logic behind the score.
Then, use these insights to fine-tune your free-to-paid strategy and improve your conversion rate.
13 tips for converting free trial users into paying customers
This section will show you best practices that will enable you to boost free trial conversions that drive results.
Identify and remove any unnecessary friction in the user journey
Simply put, friction is anything that keeps a user from accomplishing a desired action.
A little friction can be good for the user. For example, displaying a modal at the top of a user’s screen can be intrusive, yet drive feature discovery.
Introducing too much friction, however, can decrease their time to value, frustrate users, and cause them to churn. For example, including too many unnecessary steps in the user experience can discourage a free trial user from completing their desired action.
Before using friction, think about its grand purpose. If it doesn’t improve your user experience, it’s best to avoid it altogether.
Drive users toward key actions with checklists
To maximize user activation, understand what actions are critical and get users to complete them ASAP.
Use checklists to prompt users to take those actions. Using checklists taps into a psychological effect called “endowed progress,” which is the idea that people are more motivated to pursue something if they see themselves progressing to the end.
Add gamification elements like progress bars to make your checklists more engaging.
Help users achieve success with in-app guidance
Continuously provide in-app guidance to help users unlock the value of your product. Engage users gradually. Don’t force them to learn all of your product at once; break it down instead.
For example, launch interactive walkthroughs when users engage with a feature for the first time. Interactive walkthroughs take users by the hand and guide them through a workflow step-by-step without overloading them.
Each new step is triggered based on the user’s previous action. Employ UI elements like tooltips to explain feature benefits and engage users as they walk through product adoption.
Offer live demos during free trials
Because some products are more complex than others, they may require extra assistance. In this case, a more white-glove approach to onboarding can go a long way.
A personalized demo, delivered by your sales team, is a great way to drive product value. Highlight relevant features and their benefits to show users how to use them.
After initial setup, you can allow the user to explore the product on their own, but with access to a library of self-serve resources.
Create engagement loops to keep users hooked
An engagement loop is an experience that motivates users to engage with your product through stimulating product interactions. It uses a variety of engaging features to add personality and flair to a product.
Mailchimp is an example of an app maximizing engagement loops. They use an animated high-five to congratulate subscribers when they schedule a campaign. Giving high-fives makes users feel seen and appreciated.
Provide top-notch support through a self-serve knowledge base
Free users should get the same level of support as your paid customers to ensure they convert into a paid subscription in the future.
Providing customer support for free users is a great way to reassure them of your product’s quality, but you can’t be available to them 24/7. Besides, it’s not sensible to spend resources on people who may not be qualified leads.
Instead of 24/7 customer support, enable users with self-serve support. Provide a knowledge base full of resources like documentation articles, video tutorials, webinars, etc., to answer possible questions they may have.
Use gamification to build an enjoyable trial experience
Your free trial doesn’t have to be a boring experience. You can make it more interactive with gamification strategies. Let’s learn from Propad’s example.
ProdPad does something unique with its free trial by using gamification elements to build an enjoyable experience for users. In the beginning, you get 14 days to use the product for free.
Then it challenges you to complete tasks from their onboarding checklist to extend your trial. This helps users realize your product’s value faster.
Leverage a healthy dose of social proof
Nothing sells a product faster than social proof. What existing customers say about your product greatly influences how a new user experiences it.
Rather than just educate, use social proof to convince prospects that your product is worth paying for.
Capture testimonials from happy customers that explain why they loved your product and how it helped them. You can convert these testimonials into case studies to promote your product and boost your free trial conversion rates.
Encourage users to upgrade at the right time
Prompt users to upgrade their free plan at regular intervals before their free period ends. But be careful not to come across as pushy or annoying.
Ensure every attempt to upsell is contextual, meaning you only sell an upgrade at the right time with relevant messaging.
A good example is this upgrade modal from Loom. They know that users will likely exceed the 5 mins cap of their free trial, so they trigger a modal to sell the user an upgrade to their paid plans.
Send trial-ending notices to free trial users
Notify users with trial-ending notices when their trial period is coming to an end. Remind users about the benefits of your product and what they stand to lose if they don’t upgrade to the paid version.
Send a reminder at least 24 hours before the free trial ends. That way, new users can choose whether or not they want to upgrade their free account after the trial expires.
Also, collect feedback on why the user has not upgraded yet to offer them personalized alternatives, like a different plan or discounts.
Use promotions to create a sense of urgency
Using FOMO triggers is a great way to encourage trial customers to act quickly. Make trial users an offer they can’t refuse. For example, offer a 25% discount if they upgrade their free plan before their trial ends.
Add a time limit to the offer to instill a sense of urgency to try out the paid plan “before the offer expires.”
It’s best practice to send promotions when the user is in-app. Use UI modal as a subtle reminder without disrupting the user’s experience.
Reenage inactive users with personalized emails
Not every free user stays after onboarding. Some churn because of product complexity, competitor offerings, or a lack of motivation. When this happens, re-engage inactive users with win-back emails.
Use segmentation to identify customers that are slipping from your grasp and trigger win-back email campaigns to encourage them to become active again.
Keep your email short and personalized. Your emails should also reiterate your app’s value and convince the user to give it one more try.
Include helpful resources, FAQs, guides, and personalized content to attract users back to your product. Here’s an example from Eversign.
It takes understanding key elements like customer behavior, testing, and segmentation to create a successful free-to-paid conversion strategy.
Tools like Userpilot can help you fast-track this process. With Userpilot, you can collect, track, and boost your free-to-paid conversion rate. Book a Userpilot demo and get started today.