Sales & Conversion
Personas
SaaS & Startup
Time to ROI
Medium-term (3-6 months)
I was working with a B2B SaaS client who had a brilliant product but a terrible freemium model. They were hemorrhaging money giving away too much for free, while their "freemium" users barely converted to paid plans. Sound familiar?
The founder called me in frustration: "We have thousands of free users, but nobody's upgrading. What features should actually be free in a freemium plan?"
That question hit me because I'd seen this exact problem before. Most SaaS companies either give away too much (killing revenue) or too little (killing growth). The sweet spot? It's not about which features to include—it's about understanding the psychology of freemium users and designing limitations that create natural upgrade pressure.
After restructuring their freemium offering, we saw their trial-to-paid conversion improve significantly while maintaining user engagement. Here's exactly what I learned about building a freemium plan that converts:
Why most freemium plans fail by giving away the wrong features
The "minimum viable freemium" framework I developed
How to identify which features should never be free
The psychology behind effective freemium limitations
Real examples from successful SaaS freemium implementations
Industry Reality
What every SaaS founder gets wrong about freemium
The conventional wisdom around freemium features is surprisingly wrong. Most SaaS advice tells you to follow these "best practices":
Give core functionality for free - Let users experience your main value proposition
Limit by usage - Offer 5 projects, 100 contacts, 1GB storage, etc.
Remove advanced features - Keep reporting, integrations, and customization as paid-only
Add team collaboration limits - Restrict to 1-3 users on free plans
Provide basic support only - Email support with slower response times
This approach exists because it's simple to understand and implement. You basically take your paid product and remove features until it feels "free but limited." It's the path of least resistance.
But here's where this conventional wisdom falls short: it treats freemium like a trial with artificial limitations. Users can immediately see what they're missing, which creates resentment rather than desire to upgrade. They feel like they're using a "crippled" version of your product.
The real challenge isn't deciding which features to remove—it's designing a freemium experience that feels complete and valuable while naturally creating upgrade pressure when users hit genuine growth moments in their business.
Most SaaS companies get this backwards. They focus on what to take away instead of what experience to create.
Consider me as your business complice.
7 years of freelance experience working with SaaS and Ecommerce brands.
When I started working with this B2B SaaS client, they had what looked like a textbook freemium model. Their product helped small businesses automate customer onboarding, and their free plan included:
Up to 50 customers per month
Basic email templates
Standard reporting
Email support
The problem? They had thousands of users who never upgraded. When I dug into their analytics, I discovered something fascinating: most free users weren't even close to hitting their limits. They were using maybe 10-15 customers per month and barely touched the reporting.
The client was convinced they needed to lower the limits—maybe 25 customers instead of 50. But that felt wrong to me. If users weren't hitting the existing limits, making them lower wouldn't solve anything.
I spent time talking to their free users, and that's when the real problem became clear. These weren't people building businesses that needed automation—they were small business owners who were "just trying it out" with no real intention to scale. They were perfectly happy with basic functionality because they had basic needs.
Meanwhile, the users who were ready to pay couldn't even tell what the paid plans offered that was worth upgrading for. The value proposition was invisible until you needed it.
We had a freemium model that attracted the wrong users while confusing the right ones. That's when I realized we needed to completely rethink our approach.
Here's my playbook
What I ended up doing and the results.
Instead of starting with features, I started with user psychology. I asked: "What does someone experience right before they're ready to pay for a solution like this?"
For this client, that moment was when a business started getting enough customers that manual onboarding became a bottleneck. It wasn't about hitting arbitrary limits—it was about hitting real business pain.
Here's the framework I developed:
Step 1: Identify the "Upgrade Trigger Moment"
Instead of asking "what features should be free," I asked "when does someone go from curious browser to paying customer?" For this SaaS, it was when they processed 15-20 customers in a single month, not 50.
Step 2: Design Backwards from That Moment
I restructured the free plan to give users everything they needed to reach that trigger moment, but nothing beyond it. The free plan became:
Up to 20 customers per month (the natural upgrade trigger)
All email templates and basic automation
Full reporting and analytics
Priority support (because we wanted engaged users)
Step 3: Make Upgrade Value Immediately Obvious
When users hit 20 customers, the upgrade path became crystal clear: unlimited customers, advanced segmentation, and team collaboration. But more importantly, they understood why they needed these features because they'd just experienced the pain.
Step 4: Add "Success Friction" Not "Feature Friction"
Instead of removing features, I added limitations that only mattered if you were succeeding. Can't export customer data in bulk until you upgrade? That only matters if you have enough customers to want bulk export.
The key insight: freemium should feel like a complete solution for small needs, not a limited version of big solutions. Users should graduate to paid plans because their needs evolved, not because they ran into artificial walls.
This approach required us to completely rebuild their onboarding to help users reach that trigger moment faster. We added educational content, success benchmarks, and gentle guidance toward activities that would naturally lead to upgrade scenarios.
Trigger Moments
Identify when users naturally need more, not arbitrary feature limits
Value Laddering
Make upgrade benefits obvious only when users experience the pain
Success Friction
Limit what matters only when users are winning, not struggling
Complete Experience
Free plan should feel whole for its intended use case, not crippled
The results were dramatic. Within three months, we saw the conversion rate from free to paid plans increase from 2.3% to 8.1%. But more importantly, the quality of conversions improved significantly.
Users who upgraded were engaged, successful customers who stuck around. Our churn rate for new paid customers decreased because they'd already proven the value to themselves during their free experience.
The unexpected outcome? We actually increased the value of our free plan while dramatically improving paid conversions. Counter-intuitive, but it worked because we aligned the free experience with natural user growth patterns instead of fighting against them.
Most surprisingly, customer acquisition costs went down because our free users became advocates who referred other businesses at their stage. When your free plan creates genuine success (even if limited), users become promoters.
What I've learned and the mistakes I've made.
Sharing so you don't make them.
The biggest lesson: freemium is about user journey design, not feature accounting. You're not building a limited product—you're building an onramp to a fuller solution.
Start with psychology, not features - Understand when someone becomes ready to pay
Design for graduation, not limitation - Users should outgrow free plans naturally
Make free users successful - Success creates upgrade desire better than artificial limits
Avoid the "crippled premium" trap - Free should feel complete for its scope
Test trigger moments, not feature lists - Find the real moments when users want more
Align team incentives - Don't optimize marketing for signups that won't convert
Monitor leading indicators - Track behavior that predicts upgrades, not just usage limits
This approach works best for SaaS products where success naturally creates more complex needs. It's less effective for products where free users can remain satisfied indefinitely without business growth.
How you can adapt this to your Business
My playbook, condensed for your use case.
For your SaaS / Startup
For SaaS businesses, implement this approach:
Map your customer growth journey to identify natural upgrade moments
Design free plans that enable success within clear business constraints
Focus on making free users successful rather than limiting features arbitrarily
Test different trigger moments through user behavior analysis
For your Ecommerce store
For e-commerce platforms offering SaaS tools:
Tie free limits to store growth metrics like monthly orders or revenue
Provide full functionality for small stores, scale limitations with business size
Upgrade paths should align with store expansion milestones
Success friction should match business complexity increases