Freemium Conversion

Model a PLG freemium funnel from signups through activation, paywall exposure, and purchase. Enter stage rates to estimate overall conversion, activated users, paywall hits, and expected paid conversions.

Optimization ideas

Improve activation with onboarding aids, increase paywall exposure with compelling gating, and tune purchase rate with targeted upgrade prompts.

What is freemium conversion?

Freemium conversion measures the share of free users who become paying customers. It is a product‑led growth (PLG) funnel metric across activation, value discovery (paywall hits), and purchase.

How to use this calculator

Input monthly signups and the percentage that activate, encounter the paywall, and purchase. The tool multiplies stage rates to yield overall conversion and expected paid conversions.

Why it matters

Understanding where users drop helps prioritize UX, packaging, and upgrade prompts. Small improvements at the top of the funnel compound downstream.

Example

With 10,000 signups, 60% activation, 50% paywall exposure, and 5% purchase, overall conversion is 1.5% and ~150 paid conversions per month.

Assumptions & limitations

Rates vary by cohort and can be correlated. Use cohort analysis and experimentation to validate assumptions.

Formula

Overall freemium conversion rate = activation × paywall exposure × purchase. Improving earlier stages amplifies downstream paid conversions.

Benchmarks

Activation can range 30–70% depending on onboarding quality; paywall exposure 30–60% based on gating strategy; purchase 1–8% by segment and price. Treat these as directional and test for your audience.

Stage optimization ideas

Activation: guided setup, shortcuts, templates. Paywall: value‑based gating, progressive limits, timely prompts. Purchase: contextual upsells, annual discounts, usage‑based price metrics aligned to value.

Common pitfalls

Gating too early (blocking value discovery), gating too late (low urgency), overly generic upgrade prompts, and ignoring cohort differences. Measure retention alongside conversion to avoid churn‑prone upgrades.

Step‑by‑step example

Signups S = 10,000. Activation A = 60% ⇒ 6,000 activated. Paywall exposure E = 50% ⇒ 3,000 hits. Purchase P = 5% ⇒ 150 paid conversions. Overall = A × E × P = 1.5%.