From freemium to premium: How to upgrade your free users

January 21, 2025
0 minute read

Free trials have long been a cornerstone of SaaS marketing strategies, offering potential customers a risk-free opportunity to experience the product. Some companies go even further with entirely free tiers available for a limitless amount of time. Unfortunately, actually converting these free users into paying customers isn’t as straightforward as it might seem. Harvard researchers have found that free trial users largely don’t convert and, when they do, they’re not very valuable


So, how do we overcome this? SaaS companies must deploy thoughtful strategies to engage, educate, and incentivize users to make the leap from free to paid. More so, they need to do it in a way that attracts high-value, great-fit customers. Spoiler alert: that may involve offering free trials to existing users instead of new ones. With that in mind, here are a few actionable ideas to convert free customers into paying ones.


Optimize your onboarding process for quick wins


The onboarding experience sets the tone for a user's trial period. A well-designed onboarding process ensures users understand the product’s value and can achieve meaningful results quickly.


Start with a focus on first impressions. Simplify account setup and provide clear guidance. Don’t leave customers guessing what to do first, or intimidate them with an empty dashboard. Include a welcome email or video to outline key features and next steps.


Another approach is to help users achieve tangible outcomes early in their trial. For instance, if your SaaS tool is a project management platform, guide them to successfully set up their first project. To-do list apps, like Clear, often employ this strategy, by initiating with a curated selection of tasks designed to introduce the user to the app. 


Instead of hinting at what to do, you may instead decide to use in-app tutorials or guided tours to highlight essential features and demonstrate how they address user pain points. In-app tool-tips are a great example of this. We use this strategy extensively throughout Duda to highlight useful, related features that users may otherwise have missed.


Segment and personalize the experience


Not all trial users have the same needs or goals. Segmenting users based on their behavior, demographics, or industry can help you tailor the trial experience.


Start by using analytics to identify how users interact with your product. Focus on features they explore most and guide them toward deeper engagement.


As they dive deeper into your platform, try to customize any email campaigns or in-app notifications based on the user's progress and interests. For example, if a user hasn’t completed onboarding, send them helpful resources.


If possible, provide content tailored to different user personas, such as marketers, developers, or managers, emphasizing features most relevant to their roles. This may be an opportunity for your sales team to step in.


Demonstrate value throughout the trial


Trial users must clearly see how your product solves their problems or improves their workflows. Continuously highlight the value of your SaaS offering. There are a lot of proven techniques to accomplish this.


Case studies and success stories are a popular choice. Try sharing stories from similar customers who achieved significant results using your product. Our own success stories page uses a combination of written and visual interviews to demonstrate how users have grown with our platform.


If your product tracks performance, showcase improvements through personalized dashboards or reports. This is a convenient, quantitative way to demonstrate value to customers. 


Communicate proactively


Regular communication during the trial period keeps your product top-of-mind and helps users overcome potential hurdles.


Despite what you may have heard, email continues to be an incredibly important tool for marketing teams. A well-designed drip campaign can do wonders for your free trial conversion rates. Websites like Really Good Emails highlight some of the very best nurture campaigns for free trials. Something you’ll see in common amongst most of their examples is that these campaigns are, above everything, helpful. They give trial users gentle guidance and the tools they need to succeed.


For higher value customers, in-person check-ins may be more appropriate than an automated email campaign. Your sales team should reach out during the trial to get a feel for what their prospects are thinking.


Regardless of their potential “value,” you should always be collecting feedback during and after the trial phase. Learnings from this feedback can further improve your communication strategy.


Create a sense of urgency


To motivate users to convert before their trial ends, it’s essential to create a compelling reason to act. Limited-time offers can be effective, such as providing discounts or exclusive features for users who upgrade during their trial.


Additionally, countdown reminders can help, sending timely notifications as the trial period nears its end while emphasizing the benefits of upgrading. Scarcity tactics, such as highlighting limited spots for premium features or live onboarding sessions, can further encourage action.


Making the transition to paid plans as smooth as possible is another key strategy. The easier it is for users to convert, the more likely they’ll follow through. Transparent pricing is critical—clearly communicate your pricing structure and any additional costs before the trial ends.


Offering flexible payment options can also reduce friction, ensuring users have multiple ways to complete their purchase. Lastly, enabling in-app upgrades allows users to seamlessly transition from a trial to a paid plan without unnecessary steps.


Offer must-have upgrades


Not all free customers are on a “free trial.” Some SaaS companies choose to offer free tiers without arbitrary time limits. A hallmark of these tiers is a limited set of features, with the hopes that power users, or “whales,” will upgrade in great enough quantities to support the platform for everyone else. An example of this that you may be familiar with is Notion, who offers a generous free tier that is supported by paying Enterprise-grade accounts.


The clear solution to this, then, is to offer compelling features at higher tiers. That may mean removing usage limits, eliminating advertisements, or providing a greater level of customization.


Another avenue, however, is to offer add-ons outside of your traditional product tiers. A restaurant reservation platform, for example, may offer a free tier that includes a limited number of reservations and a branded widget. For smaller restaurants, this may be plenty! To entice those customers to spend more money on our imaginary reservation platform, we can offer websites with our software built in, or managed payment processing. Those add-ons create value even for small platforms who may not benefit from a higher tier version of the core product.


Measure and iterate


To optimize your trial-to-paid conversion process, it’s crucial to analyze conversion data to identify what’s working and where users drop off. Start by tracking key metrics such as conversion rates, feature usage, and trial-to-paid timelines. This data provides valuable insights into user behavior and highlights areas for improvement.


Implement A/B testing to experiment with different approaches, including onboarding flows, email campaigns, and pricing strategies, to determine which methods drive better results. Additionally, establish customer feedback loops to continuously collect and act on user input. This ongoing feedback allows you to refine your trial process and better align it with user needs and expectations.


Conclusion


Turning free users into paying customers is both an art and a science. By focusing on user experience, personalizing interactions, and showcasing value, SaaS companies can significantly boost their conversion rates. Remember that the trial period is your opportunity to not only demonstrate your product’s capabilities but also build trust and confidence in your brand. With these strategies in place, you’ll be well on your way to growing your customer base and increasing revenue.



Headshot of Shawn Davis

Content Writer, Duda

Denver-based writer with a passion for creating engaging, informative content. Loves running, cycling, coffee, and the New York Times' minigames.


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