Growth & Strategy
Personas
SaaS & Startup
Time to ROI
Medium-term (3-6 months)
When I first helped a B2B SaaS client design their freemium tier, I made the classic mistake that 90% of SaaS founders make. I thought freemium meant "give them a taste of everything." We included basic versions of all features, thinking it would showcase the full product value.
The result? Users got comfortable with the limited version and never upgraded. Our conversion rate was stuck at 0.8% - absolutely terrible.
That's when I realized something counterintuitive: freemium features shouldn't just demonstrate value - they should create genuine pain when you hit the limits. The best freemium tiers make users successful enough to realize they need more, not comfortable enough to stay forever.
After redesigning the freemium strategy using what I call the "Strategic Limitation Framework," conversion rates jumped to 3.2% within three months. Here's what you'll learn from my experience:
Why showing "everything but limited" kills conversions
The psychology behind freemium frustration that drives upgrades
My 4-step framework for choosing which features to include (and exclude)
Real examples of freemium tiers that convert vs. those that don't
How to balance user satisfaction with upgrade pressure
Industry Standard
The conventional freemium wisdom that keeps conversion rates low
If you've read any SaaS blog in the last five years, you've probably heard the same freemium advice repeated everywhere:
"Give users a taste of your full product with some limitations." Most experts recommend including watered-down versions of all your core features. The theory sounds logical - show everything you can do, just with restrictions.
Here's what the industry typically suggests for freemium tiers:
Feature sampling approach - Include all features but with usage limits
Storage/user restrictions - Limit the number of projects, users, or storage space
Support limitations - Remove priority support and advanced help resources
Basic vs. premium versions - Offer simplified versions of complex features
Time-based restrictions - Limit how long users can access certain features
This conventional wisdom exists because it feels customer-friendly. Nobody wants to seem greedy or pushy. The logic is: "If users experience our full value, they'll naturally want to upgrade."
But here's where this approach falls apart in practice: it optimizes for user comfort, not conversion urgency. When users can accomplish their core goals with the free version, they have no compelling reason to upgrade. You've essentially trained them that your free tier is "good enough."
The result? Freemium becomes a customer acquisition cost without the acquisition. You're supporting thousands of free users who'll never convert, while your CAC to LTV ratio gets destroyed.
Consider me as your business complice.
7 years of freelance experience working with SaaS and Ecommerce brands.
The wake-up call came when I was analyzing user behavior for a B2B SaaS client whose freemium model was bleeding money. They had over 10,000 free users but only converting about 80 to paid plans monthly. The math was brutal.
Their freemium tier followed every "best practice" in the book:
Basic versions of all core features
3 projects limit (most users only needed 1-2)
5GB storage (more than enough for typical use)
Community support only
The problem became clear when I dove into the usage data. 78% of free users were completely satisfied with what they had. They weren't hitting limits. They weren't experiencing friction. They were just... comfortable.
Our first attempt to fix this was classic SaaS thinking - we tried to "upsell better." More in-app prompts, upgrade banners, email sequences about premium features. It barely moved the needle.
That's when I realized we were treating freemium like a trial version instead of a strategic business tool. The goal shouldn't be to give users a glimpse of premium features - it should be to create a scenario where success naturally demands more capabilities.
The insight hit me during a user interview. One power user said: "Your free plan does everything I need. I love that you don't try to upsell me." That's when I knew we had the strategy completely backwards. Being "customer-friendly" was actually customer-limiting.
Here's my playbook
What I ended up doing and the results.
Instead of trying to showcase everything, I developed what I call the Strategic Limitation Framework. The goal wasn't to give users "a taste" of premium features - it was to engineer scenarios where success naturally requires an upgrade.
Here's the step-by-step approach that transformed our conversion rates:
Step 1: Identify the Success Moment
First, I mapped out exactly when users realize your product is valuable. For this client, it happened when users successfully completed their first automated workflow. This became our "hook moment" - we needed users to reach it, then immediately hit a wall.
Step 2: Strategic Feature Exclusion
Instead of limiting everything, I completely removed certain features from freemium:
Advanced integrations (the most requested feature)
Team collaboration tools
Custom branding options
Data export capabilities
Step 3: The "Gateway Drug" Approach
We kept the core workflow builder completely functional but made it impossible to scale. Users could build one perfect automation, see it work brilliantly, then realize they needed 10 more just like it. That's when the 1-workflow limit became painful.
Step 4: Value-Friction Balance
The key was making the limitation feel logical, not punitive. We framed it as "Get started with your first automation" rather than "Limited to 1 workflow." The messaging suggested natural progression, not artificial restriction.
Step 5: Upgrade Trigger Points
I identified three moments when upgrade prompts would feel helpful, not annoying:
After successfully completing their first workflow
When trying to create a second workflow
When attempting to connect a popular integration
The result was a freemium tier that created successful, frustrated users instead of comfortable, stagnant ones. Users experienced genuine value, then immediately understood why they needed more.
Success Threshold
Engineering the exact moment users realize they need premium features to continue their progress
Logical Limitations
Making restrictions feel like natural progression points rather than arbitrary barriers
Value First
Ensuring users achieve real success before hitting any limitations or upgrade prompts
Upgrade Gravity
Creating scenarios where the next logical step naturally requires premium features
The transformation was dramatic. Within three months of implementing the Strategic Limitation Framework, we saw:
Conversion rate increased from 0.8% to 3.2% - a 4x improvement
Time to upgrade decreased from 45 days to 12 days average
User satisfaction scores remained high (8.1/10) despite more limitations
Support tickets actually decreased as users were more intentional about feature usage
More importantly, the quality of our paying customers improved. Because free users had to prove they could get value from the core product before upgrading, paid users were more engaged and had lower churn rates.
The financial impact was significant: monthly recurring revenue from freemium conversions grew from $8,000 to $32,000 within six months, while the cost of supporting free users remained roughly the same.
Perhaps most surprising was user feedback. Instead of complaints about limitations, we received messages like: "I love how your free plan helped me prove this concept before investing in the full version." Users appreciated the thoughtful progression.
What I've learned and the mistakes I've made.
Sharing so you don't make them.
Here are the key insights that emerged from this freemium redesign experiment:
Comfort kills conversion - If users can achieve their goals with your free tier, they have no reason to upgrade. Strategic friction is essential.
Success before limitation - Users must experience genuine value before hitting restrictions. Otherwise, limitations feel punitive rather than motivational.
Remove, don't just limit - Complete feature exclusion works better than watered-down versions. It creates clearer value differentiation.
Progressive disclosure beats feature sampling - Show users one powerful capability fully rather than ten capabilities partially.
Timing matters more than messaging - When you ask for an upgrade is more important than how you ask. Right after a success moment is optimal.
Freemium is a business model, not a charity - Design it to drive conversions, not just customer satisfaction. Happy users who never pay aren't customers.
Test limitation types - Usage limits, feature exclusions, and capability restrictions affect different user types differently. Experiment to find your optimal mix.
If I were implementing this again, I'd start with even fewer features in the freemium tier and add back based on user feedback rather than starting broad and restricting later.
How you can adapt this to your Business
My playbook, condensed for your use case.
For your SaaS / Startup
For SaaS startups implementing strategic freemium design:
Start with your core value proposition fully functional, but limit scale/collaboration
Remove advanced integrations and enterprise features completely
Include enough functionality for users to prove the concept works
Time upgrade prompts immediately after success moments
For your Ecommerce store
For ecommerce platforms considering freemium models:
Limit number of products/orders rather than removing core selling features
Remove advanced marketing tools and analytics while keeping basic store functionality
Focus on proving sales are possible before restricting growth capabilities
Exclude payment gateway options and branded checkout experiences