Thread by @hipreetam93

** How to Convert Your Free Users to Paid **

💸 Understand why people pay for your tool
🎯 Identify the right users to target
📈 The right metric to track conversions
🚀 5 strategies to convert your free users to paid
🤔 What to do if your results are so-so

THREAD 👇

💸 Understand why people pay for your tool

1. Survey users
- email with a reply CTA
- Google form
- 1:1 calls with 20 users

2. Learn
- What is the value they derive from your tool?
- Favorite feature(s), and why?
- If your tool didn’t exist, how would they solve the problem?

🎯 Identify the right users to target

Once you understand value derived by paid users
> identify segments of free users who derive similar value from the free features, and
> and who are likely to derive even more value by unlocking the paid features.

Example:

Mixpanel’s pricing page shows that certain features are gated based on the plan.

One could deduce that users that have strong usage of Flows, Funnels, and Retention features are more likely to benefit from the “Advanced analysis” features such as Impact or Signal.

📈 The right metrics to track conversions

What does a 4% free-to-paid conversion rate tell you beyond acting as an overall health indicator?

Instead, group free users by value they already derive from your tool, and the additional value they can unlock by upgrading to paid.

You want to track free_user_segment_1-to-paid conversion rates after you have identified the segments of your free users who are likely to benefit from upgrading to a paid plan.

Your benchmark for success becomes: What % of free_user_segment_1 converted to paid?

🚀 5 strategies to convert your free users to paid

Let's recap. So far you have
- understood why people pay for your tool
- identified free user segments that can unlock additional value by upgrading
- found the right way to track success

You're ready to execute!

1. Nurture your free users by explaining the benefits of paid features

Your free users need to know what they are missing out on. And the most straightforward way to let them know is by telling them directly.

Try
- automated trigger-based emails
- in-app messages

2. Share positive stories and accounts from paying users

Social proof goes a long way toward establishing trust and credibility.

Capture the answers to your paid users survey described earlier in this post, and use them as a testimonial to convince free users to upgrade.

3. Unlock paid features for a limited time

Talking about benefits is good. Social proof is great.

But you know what’s the most unbeatable experience?

Letting your users experience the benefits for themselves.

You could unlock certain paid features for a limited time, or perhaps offer limited usage.

This allows your free users to experience the benefits for themselves, which becomes the strongest push for your users to upgrade and continue deriving those benefits.

4. Craft a compelling offer

Nurturing and demonstrating value propositions are by themselves giant steps towards converting free users into paid.

But why stop there?

Make an offer that your users cannot refuse.

Can be as simple as
- 20% off for 3 months
- 50% off 1st month

I love what @ahrefs has done, which is offering a 7-day trial for $7.

I suggest trying a $1 for 1 week trial offer because it
- lowers the barrier for someone to try.
- gets free users through the door in setting up their payment details, reducing friction towards conversion.

5. Sprinkle in a sense of urgency

A great offer is one part. The second is creating a time limitation. This instills urgency in the user to try out the paid plan “before the offer expires.”

Here's @Headspace with their magic.

🤔 What to do if your results are so-so

Despite trying all the steps in this guide, it’s possible that you may not find any meaningful lift in free-to-paid conversions.

If that’s the case, you’ll want to identify the biggest reasons quickly.

There are two main possibilities:

1. The free plan is too generous, and therefore leaves users with insufficient motivation or need to upgrade to a paid plan.

You need to look at your free and paid plan structure in more detail and find out the right usage limits and features to gate behind the paid plans.

2. The free plan is attracting the wrong kind of users who are unlikely candidates for paid features.

Look closely at where you are acquiring users from. You might need to change the messaging in your marketing collateral and website copy to attract a different set of users.

🌟 I hope this post helps you in converting more free users of your product to the paid plans.

🙌 Thanks for publishing my post @Product_Craft @pendoio

productcraft.com/best-practices…