Optimize your Freemium Subscriptions Conversion Rate and Business Health with SubscriptionFlow


Freemium is one of the most renowned business models in the SaaS and B2B marketplace. As the name suggests, Freemium is a combination of the free business model and the Premium business model that aims to improve customer acquisition rate while reducing customer acquisition costs.

Conversion rate and customer acquisition cost go hand in hand as CAC works on the purpose to increase the number of customers. However, when looking for an optimized customer acquisition strategy that does not ask for a skyrocketing – Freemium Model is the right strategy that clicks in mind.

Keeping in view the business needs along with optimal business health, this article will give detailed information regarding the freemium model and tips to increase the conversion rate through it.

Freemium Model for SaaS Businesses

SaaS and B2B businesses need to devise strategies that can bring in more revenue and improve customer retention rates. The Freemium model for SaaS businesses enables your customers or consumers to use the service or product for an undefined time period with limited features. One should not overlap the freemium model with the free trial model in SaaS.

The subscription economy and subscription-based businesses are rapidly increasing which is result in reducing the marginal costs. Therefore, businesses are moving towards offering this model to potential customers to increase their customer base and generate revenue.

In the next section, we are going to discuss this in detail which will shed light on bringing conversions by offering premium.

Optimizing your Freemium Conversion Rate

The result expected by offering freemium subscriptions to the customers is to generate more paid subscribers and bring conversions from them.

Customer acquisition is not the only target – but the revenue and increased customer lifetime value rate for the business. however, when businesses make tiers to differentiate freemium from premium there is a nuisance that does not get enough conversions of a ‘free user turned paid user’.

Therefore, it is extremely important to optimize your freemium model features that fetch a higher conversion rate.

Following are the five strategies that will help you increase conversion rate by optimizing your freemium model being offered to the users.

Right Product Limitations For Your Product

Features are an integral part of any tier creation for the consumer base. In SaaS businesses, merchants have to be meticulous while deciding what features to add to a freemium offer.

If you are giving out a lot of features in the freemium model then there are lesser chances of creating more conversions as users get the essence of the product is free. They feel no need to turn to the paid version of the products.

To optimize it for the end goal, you can use analytics and user behavior to see the most used feature of the product. Doing this would help you strategize your freemium model and make adjustments that will lead to generating potential revenue.

So, add product limitations appropriately – features or products that sell the most.

Offer A Full-Feature Free Trial

Here the customers will get the real difference between the trial and freemium models.

Both of the subscriptions complement each other and offering these two models will help customers understand what they really want.

A full feature free trial will make them access every freemium and premium model however for a limited time. Whereas in freemium they will access limited features for the evergreen time.

Offering your customers, a full feature trial will help them in exploring the most useful features that will help them get the success and goals for their business scalability.

Hence, make your customers incentivize the value by realizing the true value of the features or products.

Read more: SaaS Free Trial vs. SaaS Freemium—An Ultimate Exploration of the Option That Drives More Paying Customers and How

Concentrate On Customer Success

Customer success is one of the integral parts of bringing conversions to SaaS businesses. Customer success is driven by the customer success manager and the way the customer is onboarded after they sign up. Here are some of the ways that the customer success team can implement to make customers feel important.

  • Set up onboarding emails (perhaps series) and give them a welcome message.
  • Help customers navigate when they sign up and start to use the product.
  • Provide them the knowledge base to answer the potential questions and understand the products or features’ functionality
  • Give them customer support along with a knowledge base to sort their issues out at the earliest.
  • Send a newsletter.

Remind Users To Upgrade At Every Turn

Merchants and business owners cannot rely upon subtle messages to remind customers to upgrade their plans.

The action plan to bring conversions from the free users needs to be strong that give them real influence. Remind your customers by sending them notifications on the set intervals to upgrade their plans and take full advantage of premium features. You can remind them by using the following pop-ups:

  • Send in-app notifications for new and premium features
  • Keep updating your CTAs during onboarding and support messages.
  • Periodic email reminders

Use customer behavior analytics and use the customer segmentation approach to target the customers with more customization.

Take A More Hands-On Approach to Inside Sales

Here the main role is of the sales team that takes an insider’s approach. Inside sales are generated by using customer or user segmentation.

Make the segmentation on the basis of the high-priority leads that have a high product engagement rate. approaching a user that uses or engaged with your product more often has higher chances to bring conversions and upgrades to the paid or premium plan.

Read more: How to Plan the Best Freemium Model to Make More Users Upgrade to Premium

Should You Use a Freemium Business Model?

The Freemium business model is not everyone’s cup of tea. There are certain factors that must be taken into before you take the plunge of offering a freemium subscription model. Let’s take a look at that.

  • If you have a low marginal cost for your business then offering a freemium model would be the right choice.
  • The size of the market plays an important role in proving whether the freemium subscription model would be the right choice or not. If the market is already extensive and widespread then there might not be a good chance of fetching conversions by offering a freemium business model to the customers.
  • Do you have a clear migration strategy to make users switch from the free plan to the paid plan? If not, yet, then one should not offer freemium. The goal of your business is to generate revenue and bring conversions. However, if you do not have a migration strategy that will effectively work then making a strategy first should be your first step.

Freemium Subscriptions Management in SubscriptionFlow

In SubscriptionFlow, we offer our customers a full-fledged experience to manage their freemium subscription model for your business.

With just one click, get the extension to set up endless free trials and freemium plans seamlessly.

Being a subscription management platform, we manage trial users and freemium users so you never miss any potential customers and users for your business’s health and growth.

As we talked about sending periodic emails and notifications, SubscriptionFlow enables you to personalize and schedule your emails to keep your customers in the loop. You can send trial expiry reminders, email notifications, upgradation reminder emails, and much more through SubscriptionFlow.

Read more: Maximize Customer Acquisition With Free Trials and Freemiums for Your SaaS

Final Thoughts

To improve your business health and make it scale seamlessly, the action is all upon you.

Schedule a demo with us now and get a freemium subscription model walkthrough for your business!