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6. Free to Paid
This is the Conversion Rate between Free users into Paid users (relevant for freemium or free trial products only)
There are three primary models for free-to-paid in SaaS
Most SaaS companies primarily follow three primary business models when offering free to paid products.
- Freemium — the product is offered free of charge, but money is charged for advanced features or functionality
- Free trial (without credit card) — the product is offered on a “try before you buy” basis without credit card information
- Free trial (with credit card) — the product is offered on a “try before you buy” basis with credit card details collected up-front
Freemium to Paid Conversion Benchmarks
- 1–10% Insight Venture Partners article on companies like 37signals, Dropbox, Evernote, GitHub, HootSuite, New Relic, SurveyMonkey, Weebly, Zendesk (2012)
- 3% for SaaS or B2B Web Apps — Lincoln Murphy from Sixteen Ventures(2010)
- 4% — Dropbox’s % paid of total userbase (2012)
- 30% — Slack (2014)
- 6% after 2 years; 4.9% of MAUs — Evernote (2010) & TC article (2009)
Free Trial to Paid (without credit card) Conversion Benchmarks
- 6–10% — Customer.io (2014)
- 10% with peaks as high as 18% — Justuno (2016)
- 15% — Totango study of ~100 SaaS companies (2012)
- 25% — Recapture.io (2016)
- 2–3% — 3 Minute Optimizer (2015)
- 2–4% — GoToMyPC / GoToMeeting (2011)
- 3.75% — Salesforce (2006)
- 15% — Chargebee (2016)
- 10% — Gutensite (2013)
Free Trial to Paid (with credit card) Conversion Benchmarks
- 50% — Totango study of ~100 SaaS companies (2012)
- 30–40% — 3 Minute Optimizer (2015)
- 40–45% — GoToMyPC / GoToMeeting (2011)
- 40–50% — Callwave (2011)
- 56% — Moz (2012)
