What Is a Good Free-to-Paid Conversion Rate (With Data)

Marketing School - Digital Marketing and Online Marketing Tips

Eric Siu and Neil Patel

Marketing, Careers, Business

4.6 • 1.4K Ratings

🗓️ 5 September 2023

⏱️ 5 minutes

🔗️ Recording | iTunes | RSS

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Summary

In episode #2553, we delve into the topic of good free-to-paid conversion rates (with data) and how to figure out whether you’re hitting the right benchmarks. There are plenty of variations on the freemium to premium model in the tech world. For some you’ll get to try out the product or service for free, but with limited capabilities, while with others you can use the full package, but only for a limited time. Your conversion rate will depend on how many customers decide to opt into paid plans. In our conversation, we explore the different options out there, how to determine whether you’re hitting good conversion rates from free to paid, and what you can do to boost yours. Join us for key insights and actionable advice on free-to-paid conversion rates and how to go from freemium to premium! TIME-STAMPED SHOW NOTES: (00:00) Today’s topic: What Is a Good Free to Paid Conversion Rate (With Data). (00:09) What do we mean by free-to-paid conversion rates? (00:27) Different models that incorporate free services in the tech world. (01:53) An overview of good version rates for different freemium models. (02:45) How to find examples of good conversion rates. (03:45) Tips on how to boost conversion rates. (04:18) How to assess whether you are hitting the right benchmarks. (05:12) That’s it for today! Don’t forget to rate, review, and subscribe! Go to https://www.marketingschool.io to learn more! Links Mentioned in Today’s Episode: Don’t forget to help us grow by subscribing and liking on YouTube! Lenny's Newsletter Leave Some Feedback: What should we talk about next? Please let us know in the comments below Did you enjoy this episode? If so, please leave a short review. Connect with Us: Single Grain << Eric’s ad agency NP Digital << Neil’s ad agency X @neilpatel X @ericosiu Learn more about your ad choices. Visit megaphone.fm/adchoices See omnystudio.com/listener for privacy information.

Transcript

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0:00.0	All right, so we are going to talk about what a good free to paid conversion rate is.
0:05.0	But first and foremost, Neil, what do we mean by free to paid conversion rate?
0:08.0	Sure, so what I mean by a good free to paid conversion rate is when someone ends up buying your
0:15.6	product or service or software and they're signing up for a free version and
0:20.5	then how many of those people actually convert into a paid user or paying
0:25.3	customer. Yep. This is written by a guy, his name's, it's hard to pronounce his
0:30.2	last name, it's Lenny Rachitsky okay so he's a product guy he's got a great
0:34.8	newsletter a lot of people in tech subscribe to him and he's got a lot of data to
0:37.8	share he actually interviews a lot of people working in tech and so here is a table over here and if you can't see it we're going to read it out to you.
0:46.2	So what is a good and great free to paid conversion rate? So you can be using freemium. So freemium is you might have a crippled version of the product and self serve and that means you can kind of activate it yourself and play around with it I think
0:57.5	HubSpot allows you to self-serve and then you have freemium where it's sales assisted where you might have to talk to a salesperson to get involved with the
1:04.8	freemium or in some cases some features might be locked away and you might need to
1:08.5	talk to a salesperson and then you have a free trial we'll go with a free trial
1:12.1	I mean that's pretty 14 day free trial have a free trial, we'll go with a free trial, I mean that's pretty
1:13.4	14 day free trial, 30 day free trial, whatever, and then you enter in your credit
1:16.5	card, could be before or after, after you use it for a while.
1:21.1	Reverse trial, do you remember what a reverse trial is?
1:23.0	Reverse trial is, I think you have to opt out to not be charged or something like that?
1:29.0	Let's see, I think we both.
1:31.0	So anyway, I don't think Neil and I know what a reverse trial is, but we're going to go with the one, two, and four over here.
1:37.0	So here's what it sends in the table.
1:39.0	I think the reverse trial is you have to opt out or else you get a charge.
	...

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