We dove deep into the user experiences of 15 top AI tools, documenting over 100 monetization touchpoints, upgrade pathways, and conversion tactics. What we found were five distinct patterns that drive revenue for these leaders.

These strategies aren’t just for AI. They’re blueprints that any SaaS tool can adapt to accelerate its own growth. Here’s what we learned.

The data behind the patterns

Our analysis covered tools spanning text generation (ChatGPT, Claude), search (Perplexity), design (Ideogram, Leonardo.AI), video creation (Runway), and productivity (Grammarly, QuillBot). Each tool was examined across four critical areas:

• Monetization elements: Upgrade CTAs, limit notifications, premium feature gates, and more
• Monetization pathways: The specific user journeys from free to paid
• Pricing and payment screens: Where users actually convert when they decide to upgrade
• Missed opportunities: Places where tools could be driving more conversions

What emerged were five clear patterns that high-converting tools use consistently.

Pattern #1: The progressive squeeze

The strategy: Start with subtle hints, then gradually increase conversion prompts as users become more invested.

Who’s doing it: Claude, ChatGPT, and Perplexity have mastered this approach.

How it works: These tools begin with gentle upgrade suggestions embedded in the interface. A small CTA in the sidebar, a mention of plan limits in account settings. As users engage more, the messaging becomes increasingly direct.

Claude exemplifies this perfectly. New users see a subtle “Free plan” indicator and a small upgrade CTA. After several conversations, users get friendly notifications about approaching limits. Only when limits are actually hit does Claude present the strong upgrade push with clear urgency messaging.

ChatGPT follows a similar pattern but with more touchpoints. Multiple upgrade opportunities appear once logged in, but the real conversion push happens when users try to upload files or access advanced features.

Why it converts: Users invest time and mental energy before hitting any hard walls. By the time they reach limits, they’re already committed to the tool and see clear value in upgrading rather than switching to alternatives.

The missed opportunity: Many tools go straight to hard limits without the progressive buildup, losing users who might have converted with a gentler approach.

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How Top AI Tools Turn Free Users Into Paying Customers

Pattern #2: The feature tease

The strategy: Show users exactly what they’re missing by displaying premium features prominently, then gating access.

Who’s doing it: Ideogram, Grammarly, and Leonardo.AI excel at this approach.

How it works: These tools don’t hide their premium features. Instead, they showcase them prominently with visual cues like lock icons, blurred previews, or “Pro” badges. Users can see the feature, understand its value, and often interact with locked elements that trigger upgrade modals.

Ideogram shows locked features upfront on the dashboard, displays private galleries as gated sections, and lets users click through to see upgrade benefits. When users generate images, editing options appear with clear visual indicators of which features require upgrading.

Grammarly shows blurred premium suggestions alongside free ones, lets users see statistics with tone analysis grayed out, and provides partial feature previews that create curiosity about the full experience.

Why it converts: Curiosity combined with FOMO creates powerful motivation. When users can see exactly what they’re missing and how it would solve their problems, the upgrade decision becomes much easier.

Implementation tip: The key is showing enough value to create desire while maintaining a clear visual hierarchy between free and premium features.

Pattern #3: The moment of need

The strategy: Present upgrade options precisely when users are most invested and would benefit most from premium features.

Who’s doing it: Runway, QuillBot, and Character.AI time their conversion prompts perfectly.

How it works: Instead of generic upgrade CTAs, these tools interrupt workflows at strategic moments when users are actively trying to accomplish something and would most benefit from premium features.

Runway waits until users want to export in 4K resolution or remove watermarks, both of which are moments when they’re already committed to using the generated content.

QuillBot triggers upgrade prompts when users hit word limits mid-task, not during idle browsing.

Why it converts: Perfect timing equals the highest conversion rates. When users are already invested in a task and premium features would immediately solve their problem, the upgrade becomes a logical next step rather than an interruption.

The psychology: This taps into the completion bias. Once users start a task, they’re motivated to finish it, making them more likely to pay to remove obstacles.

Pattern #4: The transparent countdown

The strategy: Create urgency and build trust by clearly showing usage limits, remaining credits, and reset timers.

Who’s doing it: Perplexity, Grammarly, and Copy.AI have perfected transparent limit communication.

How it works: Instead of surprising users with sudden limits, these tools constantly communicate remaining usage through progress bars, countdown timers, and clear messaging about when limits reset.

Perplexity shows “2 queries remaining today” with each search, giving users clear visibility into their usage without anxiety.

Grammarly displays credit counts and refill timers for AI features, so users can plan their usage accordingly.

Copy.AI uses a prominent word count progress bar that updates in real-time, showing exactly how much of their monthly limit has been used.

Why it converts: Transparency builds trust while creating healthy urgency. Users appreciate knowing where they stand and can make informed decisions about when to upgrade rather than feeling tricked by hidden limits.

The trust factor: When users trust that limits are fair and clearly communicated, they’re more likely to see upgrading as a reasonable business transaction rather than being forced into paying.

Pattern #5: The omnipresent nudge

The strategy: Place multiple upgrade touchpoints throughout the interface without being intrusive.

Who’s doing it: ChatGPT, QuillBot, and Ideogram have mastered multi-touchpoint conversion.

How it works: These tools strategically place upgrade opportunities at different points in the user journey, including header CTAs, sidebar reminders, settings page options, and feature-specific prompts. The key is making each touchpoint feel contextual rather than repetitive.

ChatGPT places upgrade CTAs in the dropdown menu, file upload tooltips, model selection interfaces, and account settings. Each serves a different user intent and provides value beyond just asking for payment.

QuillBot integrates upgrade opportunities into the workflow, for example, in premium mode selectors, feature benefit explanations, and contextual prompts that feel helpful rather than pushy.

Why it converts: Repetition without annoyance increases recall and provides multiple chances to convert users at different readiness levels. Some users need to see upgrade options multiple times before they’re ready to act.

The balance: The key is ensuring each touchpoint provides value or information, rather than simply asking for money repeatedly.

The standout performers

While all 15 tools showed growth-focused design, three stood out for their sophisticated monetization strategies:

Claude excels at the Progressive Squeeze, building user investment before presenting upgrade opportunities. Their limit messaging feels helpful rather than restrictive, and the upgrade pathway is seamless.

Ideogram masters the Feature Tease, showcasing premium capabilities so effectively that users understand the upgrade value before reaching any limits. Their visual hierarchy makes premium features aspirational rather than frustrating.

Perplexity nails the Transparent Countdown, creating urgency without anxiety through clear limit communication and value-focused messaging.

Common missed opportunities

Our analysis revealed several patterns where even successful tools leave money on the table:

• Timing failures: Many tools show upgrade prompts during onboarding when users haven’t yet experienced value, rather than waiting for engagement.
• Value communication gaps: Some tools gate features without clearly explaining the benefits, leading to confusion rather than desire.
• Conversion pathway friction: Several tools send users to generic pricing pages rather than contextual upgrade flows that maintain momentum.
• Limit surprises: Tools that suddenly cut off functionality without warning create frustration rather than conversion motivation.

Applying these patterns to your SaaS growth strategies

These AI growth strategies aren’t limited to AI tools. The underlying principles work for any SaaS looking to improve free-to-paid conversion:

Start with your user journey mapping

Identify key moments where users experience value and where they encounter limitations. These are your conversion opportunity points.

Audit your current upgrade messaging

Are you using the Progressive Squeeze, or do you jump straight to hard limits? Are you showing users what they’re missing with Feature Teasing?

Review your limit of communication

Do users understand their usage limits, and when they reset? Transparent Countdown reduces churn and builds trust.

Optimize your touchpoint strategy

Map where upgrade CTAs appear in your interface and ensure each serves a specific user need rather than just asking for payment.

Test your conversion timing

Are you presenting upgrade options when users are most invested (Moment of Need) or just when it’s convenient for your UI?

What does this mean for your growth strategy?

AI tools are teaching us that successful monetization isn’t always about restricting features; it can be about showcasing value, building trust, and timing conversion opportunities perfectly. The tools growing fastest aren’t necessarily those with the best AI models, but those with the smartest user experience design.

These patterns work because they align business needs with user psychology. Instead of seeing limits as barriers, users experience them as natural progression points toward greater value.

The AI boom provides a unique laboratory for studying growth tactics at scale. These tools process millions of users and can iterate rapidly, revealing what actually drives conversions versus what we think should work.

As AI capabilities become more commoditized, user experience (including monetization design) becomes the key differentiator. The tools implementing these patterns now are building sustainable competitive advantages that will persist even as the underlying technology evolves.

Taking action on these insights

The most successful SaaS companies will adapt these AI growth strategies to their own products before their competitors catch on. Start by analyzing your current monetization approach against these five patterns:

1. Map your user journey to identify Progressive Squeeze opportunities
2. Audit your feature visibility to implement Feature Teasing where appropriate
3. Review your limit of communication to adopt Transparent Countdown principles
4. Time your conversion prompts to leverage the Moment of Need psychology
5. Optimize your touchpoint strategy using Omnipresent Nudge best practices

The data from these 15 AI tools provides a roadmap, but implementation requires careful testing and optimization for your specific user base and value proposition.

Ready to apply these AI growth strategies to accelerate your SaaS growth? The Good specializes in analyzing user experiences and implementing conversion optimization strategies that turn insights into revenue. Our team has helped dozens of SaaS companies optimize their monetization flows using data-driven approaches just like this analysis.

Get your personalized monetization strategy audit. We’ll analyze your current user experience against these proven patterns and create a prioritized optimization roadmap tailored to your product and audience. Schedule a consultation with our team to discover how these AI growth strategies can accelerate your revenue growth.

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How Top AI Tools Turn Free Users Into Paying Customers

The post 5 SaaS Growth Strategies That Work (Based On Analysis Of 15 Top AI Tools) appeared first on The Good.

But over many years of working with SaaS teams, there is something counterintuitive we’ve learned about this approach.

The companies that scale fastest aren’t always the ones acquiring the most users. They’re often the ones who build monetization strategies that focus on their existing user base. As users find more value in the tool and increase usage, the tool’s pricing fluctuates accordingly.

Realistically, every SaaS tool will hit a growth plateau. There aren’t infinite users that will find value in your product, even though we all wish there were.

The goal is to build growth into your monetization strategies so you don’t leave any untapped revenue in your existing user base. This ensures you don’t reach a premature growth plateau once net new users become stagnant.

The fundamental shift in monetization strategy from seats to value

Before we get started, throw your traditional SaaS monetization playbook out the window.

For years, companies have relied on seat-based pricing because it made sense. With each new hire, a new account or seat was purchased for tools. Revenue grew linearly with team size.

But now one person can do the work of two or three people. AI tools, automation, and productivity software mean that the relationship between users and value creation has completely shifted. When your customers can accomplish twice as much with half the team, seat-based pricing isn’t sustainable.

Smart companies are pivoting to value-based extraction. Instead of charging for the number of people using your software, they charge for the value you create. This isn’t just about switching to usage-based pricing; it’s about fundamentally rethinking how you capture the value your product delivers.

Consider HubSpot’s evolution. Instead of sticking to their standard seat-based pricing model as the market has evolved, they’ve created a dynamic pricing system. Users can pay for seats at their specific account tier, but also have a layer of contact-based pricing, aligning cost with the actual value delivered rather than just the number of users.

They’ve also recently added token-based pricing for certain functions in the tool, like marketing email sends, AI features, and API calls. These changes allow them to maintain revenue growth even as customers reduce their seat count.

You’re trying to capture more of the consumer surplus

Most SaaS tools have a consumer surplus. There are features or outcomes that customers would pay more for, but don’t have to because of your pricing model.

You can never eliminate all surplus (you need happy customers), but you can likely capture more of it through strategic segmentation and value extraction.

Think about your demand curve. It’s not a straight line. It’s a complex slope that varies by customer segment, use case, and willingness to pay. Most companies set one or two price points and leave massive value on the table. The companies that scale create multiple packages along that curve.

Netflix understood this when it evolved from a single $7.99 plan to Basic, Standard, and Premium tiers. Each tier captures different segments of willingness to pay while allowing customers to self-select into the option that works for them. However, the real insight wasn’t in the tiers themselves, but rather an understanding that different customer segments valued different features. Knowing that allowed Netflix to extract more value from customers who were willing to pay more while keeping price-sensitive customers from defecting.

Research changes everything

To get started on a monetization strategy based on value and capture more of the consumer surplus, companies have to build their understanding of what customers are willing to pay for.

Research from monetization and pricing expert Madhavan Ramanujam says that 20% of features drive 80% of willingness to pay. The challenge is to make sure you aren’t over-indexing on features that customers don’t actually value while underdeveloping the ones that drive revenue.

The solution is systematic research that reveals what customers actually want to pay for. Here are three methods to make it happen:

Max diff analysis: Present customers with feature lists and ask them to identify the most and least important items. With enough volume, you can rank features by their impact on willingness to pay. Features that over 50% of customers want become your “leader” features or the core value proposition that justifies your price point.

Anchoring questions: Instead of asking customers what they’d pay (which doesn’t work), ask them to compare your value to a known competitor. “If Salesforce brings your team 100 points of value, where do we rank?” This gives you relative value positioning without the discomfort of direct pricing questions.

Van Westendorp pricing: Ask customers four questions about price sensitivity: What’s acceptable? What’s expensive but you’d consider it? What’s so expensive that you wouldn’t consider it? What’s so cheap that you’d question the quality? This reveals the psychological price boundaries for different customer segments, providing a window of tenable prices that capture both the price-sensitive and high-willingness-to-pay corners of the market.

The Shopify monetization strategy: how to scale with your customers

An innovative and extremely effective monetization strategy allows you to grow with your customers. Shopify cracked this code by creating a model where their revenue increases as their customers become more successful. Instead of charging an ever-larger flat monthly fee, they take a percentage of gross merchandise volume (GMV).

This creates a virtuous cycle: Shopify is incentivized to help their customers succeed because customer success directly translates to revenue growth. When a merchant goes from $10,000 to $100,000 in monthly sales, Shopify’s revenue from that customer increases 10x.

Smaller businesses benefit from a proportional cost as they get started, and if businesses leave once they grow, Shopify doesn’t mind.

Shopify actually optimizes for this churn, not against it. As Archie Abrams, VP of Product and Head of Growth at Shopify, explains: “The way we think about churn [goes] back to Shopify’s mission and what we want to do, which is to increase the amount of entrepreneurship on the Internet.”

Instead of trying to prevent customers from leaving, Shopify focuses on lowering barriers to entry so more entrepreneurs can try starting businesses. They know most will fail, but the few who succeed generate massive value. This counterintuitive approach has helped Shopify power over 10% of U.S. e-commerce with $235 billion in GMV in 2023.

The beauty of this model lies in its retention through value creation, rather than friction. Traditional SaaS companies worry about churn because losing a customer means losing all their revenue. But when your revenue scales with customer success, churn becomes less of a concern. Your most successful customers are worth 10x or 100x more than your average customer, creating a natural buffer against churn.

Finding your untapped revenue

The process of discovering untapped revenue in your user base can be synthesized into a few steps:

Step 1: Segment your demand curve

Different customer segments have different willingness to pay. Enterprise customers might value security and compliance features, while SMBs prioritize ease of use and cost. Map these segments and understand what each values most.

Step 2: Identify value gaps

Look for places where customers are getting significant value but paying relatively little. These are your biggest opportunities for revenue expansion. Often, these are found in features that save customers time or help them make money.

Step 3: Create extraction mechanisms

Build pricing tiers, usage limits, or premium features that allow high-value customers to pay more for the value they receive. The key is making this feel like a fair exchange rather than a penalty.

The most effective monetization strategies combine multiple approaches. For example:

• Base + usage: Provide a predictable subscription base with usage-based charges for additional value. This gives customers cost certainty while allowing you to capture upside from heavy users.
• Tiered value: Create pricing tiers based on customer segments and use cases, not just feature lists. Each tier should feel designed for a specific type of customer.
• Expansion revenue: Build mechanisms for customers to naturally increase their spending as they grow. This could be through additional seats, increased usage, or premium features.
• Value-based upgrades: Tie pricing increases to value delivered, rather than just features added. When customers see clear ROI, they’re willing to pay more.

Step 4: Test and iterate

Pricing optimization is an ongoing process. Test different approaches, measure customer response, and iterate based on data. The best monetization strategies evolve continuously.

A monetization strategy that works for the long term

The future of SaaS monetization is about aligning pricing with value creation rather than resource consumption. The untapped revenue in your user base is real, measurable, and accessible, and approaching it with a value-based strategy will help you capture it.

At The Good, we specialize in helping SaaS companies optimize their monetization strategies through data-driven research and strategic experimentation.

Our services can help you identify value gaps, design pricing experiments, and implement changes that drive meaningful revenue growth. Get in touch to learn how we can help you extract more value from your existing customers.

The post Building A Monetization Strategy That Doesn’t Leave Untapped Revenue in Your User Base appeared first on The Good.

According to McKinsey research, nearly 40% of consumers switch retailers to get better deals.

The challenge is no different from the classic showrooming problem that has plagued retailers for over a decade. Your customers discover your products, compare, and then disappear to buy from wholesalers, retailers, or resellers offering lower prices.

Because they can’t compete on price and leadership won’t budge on enforcing a MAP policy, many teams will simply throw their hands up and concede that 40% of price-sensitive shoppers will buy elsewhere.

Before you do that, I want to share an alternative POV. After working with hundreds of ecommerce brands to increase conversions, there are some tried and true strategies that will deliver in spite of MAP restrictions.

It starts with reframing the situation. Customer acquisition isn’t the problem. Customer preference is.

Instead of trying to win the price war, it’s time to focus on better customer experiences and compete in areas that can’t be replicated by the competition.

Solution 1: Make the experience worth the premium

The insight: 72% of consumers expect personalized experiences. Resellers can’t always deliver them.

While you can buy Glossier products at retailers like Ulta and Target, Glossier’s direct channels offer something those retailers can’t: a personalized skincare quiz that analyzes your skin type and concerns to curate 3-5 products specifically for your needs.

Their website shows personalized product recommendations based on your quiz results and browsing behavior, creating a tailored experience that feels custom-made.

This is the idea of selling the experience of being your customer and making it a seamless, one-of-a-kind experience to shop with you.

What this looks like in practice:

• Real-time AI personalization throughout the shopping experience
• Immersive product discovery via recommendations
• Clear articulation of your brand values and differentiators relevant to each unique user
• Brand storytelling that makes the purchase decision emotional instead of transactional

Solution 2: Create exclusivity that other sellers can’t touch

The insight: Exclusive SKUs and premium products can command 20-30% higher profit margins. While your resellers can sell your products, they can’t sell your brand or your relationship with customers.

Nike didn’t always beat resellers by matching prices. They created SNKRS app exclusives and limited colorways that resellers literally cannot obtain, contributing significantly to digital revenue and spiking DTC sales during the pandemic.

The strategy works because exclusivity creates urgency, and urgency often trumps price sensitivity.

What exclusive access looks like:

• Brand-only colorways and limited editions
• Early access windows 24-48 hours before reseller inventory
• Extended size runs available only through your channels
• Bundle combinations that resellers can’t replicate

Solution 3: Build loyalty programs that compete with discounting

The insight: Experience-based loyalty programs can make the shopping experience delightful without lowering prices.

84% of customers say they’re more likely to engage with a brand that offers a loyalty program, which is a game-changer for ecommerce companies without MAP policies.

For example, members of Sephora’s Beauty Insider program generate 80% of its total sales. While the program doesn’t guarantee products at the lowest price, it does offer exclusive access, personalized services, and community benefits that competitors cannot provide.

Loyalty programs that work:

• Tier-based structures with exclusive access benefits
• Community elements that create network effects
• Experiential rewards that resellers can’t match
• Personalized services that add genuine value

Solution 4: Optimize every conversion touchpoint

The insight: When you can’t compete on price, every visitor becomes precious. Optimizing the digital experience can offset price disadvantages.

Munchkin faced this exact challenge competing with retailers like Target and Walmart, where their products were sold. Working with The Good, they discovered that 70% of their traffic was mobile, but frustrated users were bouncing due to annoying pop-ups and poor navigation.

As David Embree from Munchkin put it, “If you’re paying to invite someone to your store, you don’t want them to walk in and immediately turn around to go somewhere else.”

By removing invasive popups, optimizing mobile navigation, and improving product findability, Munchkin decreased its bounce rate significantly and saw a lift in site-wide KPIs within six months.

What a powerful optimization strategy looks like:

• Comprehensive audit of user behavior and analytics data to identify conversion barriers
• Prioritized solutions that turn barriers into opportunities
• A/B testing and other experimentation methods to validate site improvements
• Device-specific optimization to customize the experience
• Navigation improvements to help users find specific products instead of browsing aimlessly
• Streamlined purchase paths that eliminate every source of friction
• Sophisticated abandoned cart recovery that addresses objections and provides additional value

Solution 5: Leverage tech to offer innovative shopping experiences

The insight: While resellers focus on price optimization, you can invest in technological advances that create immediate competitive advantages.

Warby Parker’s AR try-on experience through their site and mobile app allows customers to virtually test frames from home. The company’s annual report mentions that try-on features contribute to customer satisfaction, which is known to increase conversion rates.

Advanced technology requires significant investment that discount-focused resellers can’t justify for all the product types in their store. But it creates customer experiences that justify premium pricing and drive conversion improvements.

What technology differentiation looks like:

• AR try-on experiences
• Real-time personalization that updates offers based on customer activity
• Predictive analytics that anticipate customer needs/interests
• Social commerce

Solution 6: Lean on your brand story and values to connect with customers

The insight: Your resellers are selling your product, but they can’t sell your story.

Olipop transformed the crowded soda market by crafting a compelling narrative around gut health and nostalgia.

While Amazon can stock their prebiotic sodas, they can’t replicate the brand’s authentic story about making childhood favorites functional for adult wellness.

This storytelling creates emotional connections that justify premium pricing. Customers pay $2.50 for an Olipop versus $1 for a Coke because they’re buying into a healthier lifestyle narrative. They also have a subscription program that makes it easy for customers to restock every month.

Weaving the brand story into everything, from blog articles to stats on quality, helps customers build a direct relationship with your brand.

Content strategies that differentiate:

• Educational content that positions you as the industry expert
• User-generated content that creates social proof and community engagement
• Brand storytelling using elements like quality tiles to connect with customer values

Solution 7: Try product bundling to create value

The insight: Retailers may have lower prices on individual products, but you can create bundles to provide unreplicable value.

Harry’s grooming bundles products to make it easier for customers to find what they need for a smooth shave. Terms like “complete suite” and “essentials” create the perception of necessity while offering genuine convenience.

Smart product bundling makes price comparison impossible because customers can’t find identical packages elsewhere. The strategy works because bundles provide genuine convenience and a perception of value.

What strategic bundling looks like:

• Product combinations with complementary items, services, or accessories
• Value-added services like installation, setup assistance, or training included
• Exclusive package deals available only through your channel

Solution 8: Create unbeatable service experiences

The insight: Exceptional customer service can become a primary differentiator when price competition is off the table.

REI’s legendary approach exemplifies this strategy through its unmatched 100% satisfaction guarantee and return policy. Members can return any REI product at any time for any reason, with no questions asked, even if they’ve used it for years.

The policy extends beyond just returns to include their expert gear consultation services, where knowledgeable staff help customers choose the right equipment for their specific outdoor adventures, and their extensive educational programs, including classes on everything from rock climbing to bike maintenance.

Superior service creates defensible advantages because it requires investment in people and processes that discount-focused resellers can’t justify. The key is making the service itself a reason to choose you.

What service excellence looks like:

• Pre-sale consultation and personalized product selection guidance
• Extended warranties and satisfaction guarantees that competitors can’t match
• Omnichannel service consistency across online, phone, chat, and in-store
• Post-purchase support that turns customers into advocates

Understanding customer psychology and your unique users

Research shows that price is rarely the only factor in purchase decisions, even for price-sensitive customers. So, understanding the foundations of customer psychology and what matters is crucial when competing beyond price.

Some of the foundational elements of customer psychology are true no matter what you offer:

• Trust and Credibility: Customers often pay premium prices for retailers they trust. Build credibility through professional website design, clear policies, security certifications, and transparent business practices.
• Convenience and Time Savings: Many customers value convenience more than small price differences. Streamlined shopping experiences, fast shipping, and easy returns can justify MAP pricing.
• Risk Reduction: Customers often choose established retailers to reduce purchase risk. Comprehensive return policies, warranties, and a reputation for reliability can overcome price objections.

But there are other user behaviors that will be unique to your customers. Doing the research to understand what they want and need is the best way to deliver experiences that can compete when your company doesn’t have minimum advertised price policies in place.

Compete on value, not on price

MAP policy restrictions don’t have to be conversion killers. They can be conversion redirectors that allow you to compete differently.

While the wholesalers, retailers, and resellers race to the bottom on price, you can build sustainable differentiation through superior customer experience, expert service, and strategic value creation.

The ecommerce teams that thrive under MAP constraints understand a fundamental truth: customers don’t always buy from the cheapest option. They buy from the option that provides the most value. Your job is to ensure that option is always yours.

Ready to transform your MAP constraints into competitive advantages? The strategies outlined here require systematic implementation and continuous optimization. At The Good, we specialize in helping ecommerce brands optimize their conversion strategies when traditional price competition isn’t an option.

Let’s talk and see if there could be a good fit.

The post Why “We Can’t Compete Without MAP” Is the Wrong Problem to Solve appeared first on The Good.

Most SaaS companies approach these upgrade opportunities with the same basic playbook: add an “Upgrade Now” button and hope for the best. But the companies exceeding their conversion goals understand something different: every upgrade scenario requires its own conversion-centered design strategy.

What is conversion-centered design?

Conversion-centered design is the practice of building digital experiences by making design decisions that serve a specific conversion goal. Unlike traditional user experience design, which prioritizes general usability and user satisfaction, conversion-centered design focuses on guiding users toward specific actions through strategic design choices.

In the case of SaaS upgrades, it’s about understanding the user behavior behind different types of SaaS upgrade decisions and crafting experiences that remove friction at precisely the right moments.

Beyond free-to-paid: the full spectrum of SaaS upgrades

Before we dive into design principles, let’s map the actual upgrade landscape most SaaS companies navigate:

Free trial to paid subscription

Free trial to paid subscription is the classic conversion challenge, where users evaluate whether your product delivers enough value to justify ongoing payment. Users typically weigh their decision based on factors such as feature completeness, onboarding success, and competitive alternatives.

Freemium to premium plans

In a transition from freemium to premium plans, users already love your basic offering, but need to justify paying for advanced features. This involves different psychology than trial conversions. You’re asking satisfied users to spend money, not preventing churn.

Plan tier upgrades

In tiered pricing plans, existing customers hit limits or need additional capabilities when considering an upgrade. These users are already paying, so the decision typically involves budget approval and feature value demonstration, rather than product evaluation.

Usage-based expansions

When customers exceed included allowances for API calls, storage, or monthly active users, they will often consider a usage-based upgrade. The decision here is often reactive rather than strategic, requiring different messaging and strategy.

Feature unlock purchases

In this scenario, individual premium features are available for one-time purchase rather than as part of a plan upgrade. Examples include advanced reporting, integrations, or compliance features sold separately.

Seat-based growth

In order to get tool access for the whole team, a user may need to purchase additional user licenses or a team account. This decision involves both the original user and new team members, creating complex decision dynamics.

Annual vs. monthly billing

Convincing users to commit to longer-term contracts for discounts is tricky. This upgrade isn’t about features, it’s about cash flow and commitment.

Each of these scenarios requires a different conversion approach because the user psychology, decision-making process, and friction points vary significantly. Let’s explore how conversion-centered design principles adapt to these diverse upgrade contexts.

The 7 principles of conversion-centered design for SaaS upgrades

Principle 1: Context-driven focus

Traditional conversion design emphasizes “creating focus” around the action you are leading users towards. In SaaS applications, that focus must be contextual. A user who has reached their storage limit requires a different focus than someone exploring premium features during onboarding.

How this works in practice:

For usage-based upgrades, focus should be immediate and solution-oriented: “You’re running low on API calls. Upgrade now to avoid service interruption.” Remove all other navigation options and make the upgrade path the primary action.

For feature exploration, focus should demonstrate value: “See how advanced analytics helped Acme Corp increase conversions by 34%.” Here, you can include secondary actions like “Learn More” or “See Example Report” because the user isn’t facing immediate urgency.

The key is recognizing where users are in their usage journey and matching your design focus to their mental state.

Here is a good example from Lovable. After creating a design, when you attempt to share it with your team, you are contextually prompted to “upgrade to collaborate.”

Principle 2: Progressive value architecture

Instead of dumping all premium features on users at once, structure your upgrade experience to build conviction progressively. This principle is especially important for complex SaaS products with multiple upgrade paths.

How this works in practice:

Design upgrade flows that reveal features progressively based on user engagement rather than showing everything upfront. Track which users click “Learn More” vs “Upgrade Now” to understand where additional information helps vs. hurts conversion. To implement, you can consider an upgrade architecture like:

Level 1: Immediate benefit

Lead with the single most compelling reason to upgrade based on the user’s current context. If they’re hitting usage limits, start with expanded capacity. If they’re in a specific workflow, highlight features that enhance that workflow.

Level 2: Supporting benefits

Once users engage with the primary benefit, introduce 2-3 supporting features that reinforce the upgrade decision. These should be directly related to their demonstrated usage patterns.

Level 3: Full feature set

Only after users show continued interest should you present comprehensive feature comparisons. Most users never need to see this level; they convert based on the immediate benefit alone.

Principle 3: Consistency across touchpoints

SaaS upgrades happen across multiple touchpoints, like in-app prompts, email campaigns, billing pages, and feature gates. Consistency across messaging, timing, and value presentation will support upgrade conversions.

How this works in practice:

• In-app feature gates: When users encounter locked features, the messaging should match what they’ll see on upgrade pages. If your feature gate says, “Unlock advanced reporting,” your upgrade page shouldn’t suddenly talk about “premium analytics.”
• Email upgrade campaigns: Match the urgency and tone of in-app experiences. If your app uses gentle nudges, don’t send aggressive “Last Chance!” emails. The psychological approach should feel consistent.
• Billing-triggered upgrades: When users approach usage limits, the upgrade flow should feel like a natural extension of their current experience, not a disruptive sales pitch.

Grammarly excels at this with its “writing update” emails, which share your usage statistics and include personalized upgrade benefits. They also maintain the same helpful, educational tone as their in-app suggestions. Users receive consistent value messaging whether they encounter upgrade opportunities in the app or via email.

Principle 4: Outcome-focused benefits

SaaS users don’t buy features, they buy outcomes. But different upgrade scenarios require different outcome framings. A user exploring premium features during onboarding has different priorities than someone hitting usage limits.

How this works in practice:

Use outcome language that matches your user segmentation research. Different user segments care about different outcomes, even for the same features. Your “productivity tools for SMBs” messaging should differ from “enterprise compliance solutions,” even if you’re selling similar capabilities.

Depending on the upgrade scenario, here are some examples:

• Trial-to-paid: Focus on productivity and competitive advantage outcomes. “Close deals 40% faster with advanced pipeline analytics”
• Freemium-to-premium: Focus on elevated capabilities and professional outcomes. “Transform from good to exceptional with premium design tools.”
• Plan upgrades: Focus on growth and scale outcomes. “Handle 10x more leads without adding headcount”
• Usage expansions: Focus on continuity and momentum outcomes. “Keep your growth trajectory without interruption.”
• Feature unlocks: Focus on specific workflow improvements, “Cut monthly reporting time from 8 hours to 30 minutes.”

Perplexity does this effectively by emphasizing the advanced capabilities you’re missing out on if you run out of your five free pro queries per day.

Principle 5: Friction-aware CTA design

Not every upgrade decision carries the same level of friction. Annual commitments create more friction than monthly upgrades. New feature adoption creates more friction than usage expansion. Your CTA design should account for these friction differences.

How this works in practice:

• Low-friction upgrades (usage expansion, monthly plan changes): Use direct, immediate CTAs. “Upgrade Now,” “Add More Storage,” “Increase Limit”. These can be prominent, high-contrast, and positioned aggressively because user resistance is low.
• Medium-friction upgrades (plan tier changes, feature unlocks): Use value-reinforcing CTAs: “Start Free Trial of Pro Features,” “See Premium Features,” “Try Advanced Tools”. Provide trial options or demos to reduce commitment anxiety.
• High-friction upgrades (annual contracts, major plan changes): Use progression-based CTAs: “See Pricing Options,” “Calculate Savings,” “Talk to Sales”. Focus on information-gathering rather than immediate commitment.
• Advanced CTA strategy: Implement dynamic CTAs that change based on user behavior. First-time feature gate encounters might show “Learn More,” while repeated encounters show “Start Free Trial,” and high-engagement users see “Upgrade Now.”

Principle 6: Social proof and trust building

The social proof that convinces someone to try your free trial won’t necessarily convince them to upgrade to enterprise features. Match your trust-building elements to the specific upgrade decision and user context.

How this works in practice:

• For security-conscious upgrades (compliance features, enterprise plans): Emphasize security certifications, enterprise customer logos, and compliance badges, “Trusted by Fortune 500 companies with the highest security standards”.
• For performance-driven upgrades (advanced features, professional tools): Highlight usage statistics and performance improvements, “Pro users complete projects 3x faster on average”.
• For team-based upgrades (collaboration features, multi-seat plans): Show team success stories and collaboration outcomes, “Marketing teams using our collaboration tools report 50% better campaign coordination”.
• For usage-based upgrades (expanded limits, additional capacity): Display growth-stage social proof, “Over 10,000 scaling companies choose our unlimited plan”.
• Trust-building implementation: Position trust elements where conversion anxiety is highest. For high-commitment upgrades, prominently display customer logos and testimonials. For usage expansions, emphasize reliability and uptime statistics.

Suno, an AI music creation platform, includes new feature upgrade options on the same page as featured creators, so you can see how popular artists are using features.

Principle 7: Conversion path optimization

Remove every unnecessary step between the upgrade decision and upgrade completion. However, “unnecessary” depends on the type of upgrade and user psychology. Some upgrades benefit from additional information, while others suffer from any delay.

How this works in practice:

• Immediate need upgrades (usage limits, access blocks): Minimize to single-click upgrades where possible. Pre-populate billing information, default to current payment methods, and confirm changes without additional steps.
• Exploratory upgrades (feature discovery, plan comparison): Allow for investigation without requiring immediate commitment. Provide detailed feature comparisons, trial options, and clear pricing information before asking for upgrade decisions.
• Team decision upgrades (enterprise features, multi-seat plans): Build in consultation and approval workflows. Provide team trial options, detailed ROI calculators, and easy sharing tools for decision-making groups.
• Budget-conscious upgrades (annual plans, major tier changes): Include savings calculators, payment plan options, and clear cancellation policies to reduce financial anxiety.
• Advanced optimization: Implement progressive profiling where users provide information gradually rather than all at once. For complex upgrades, break the decision into smaller commitment steps rather than requiring full upgrade commitment immediately.

The future of SaaS monetization design

SaaS upgrade optimization requires more than applying basic conversion principles to billing pages. The most successful companies understand that different upgrade scenarios require different psychological approaches, design strategies, and optimization metrics.

The 7 conversion-centered design principles are a great way to start doing just that.

But it’s not a one-and-done process. Iterate your designs and conduct user testing to figure out which upgrade paths are working and which aren’t.

As SaaS markets mature, upgrade optimization becomes increasingly sophisticated. Successful companies will move beyond the basics and:

• Embrace usage-driven monetization: Move beyond simple tier-based pricing to value-based and usage-responsive pricing models that require more nuanced upgrade design approaches.
• Implement AI-driven personalization: Use behavioral data to personalize upgrade timing, messaging, and pricing presentation for individual users rather than broad segments.
• Develop ecosystem-based upgrades: Create upgrade opportunities that span multiple products or services within a broader platform ecosystem.
• Focus on revenue expansion: Prioritize existing customer upgrade experiences over new customer acquisition as markets become more competitive.

Ready to optimize your SaaS upgrade experiences across every monetization touchpoint? The Good’s Digital Experience Optimization Program specializes in helping product-led companies design sophisticated upgrade experiences. Check it out and learn how you can take your business from product-market fit to sustainable scale with conversion-centered design techniques customized for your business and users.

The post Conversion-Centered Design: 7 Principles That Drive SaaS Upgrades appeared first on The Good.

While it’s essential to focus on features, user experience, and growth metrics, something many SaaS founders often underestimate is the significance of cognitive biases in pricing architecture. Understanding a few key principles of human psychology can help you guide users toward higher-priced plans.

When done correctly, psychological pricing strategies create genuine win-win scenarios where customers feel confident in their decisions while businesses optimize for sustainable growth.

The basics of SaaS pricing

The software industry’s shift from one-time purchases to subscriptions fundamentally changed consumer behavior. Unlike the old model, where companies had little incentive to maintain previously sold software, the subscription model encourages continuous updates and feature additions, benefiting the consumer.

Customers now feel a sense of ownership over the experience, and there is an inherent ongoing value perception that companies must meet. Ideally, companies take the monthly subscription fee and put it back into the product, upgrading or adding features to their software.

For companies, switching to the subscription model significantly boosted valuations. It also opened up opportunities for tiered pricing that wasn’t relevant for the one-time purchase model. It allows businesses to cater to different customer segments and extract value based on usage or features.

Successfully structuring SaaS pricing involves more than just crunching numbers; it requires an understanding of consumer psychology. By aligning pricing strategies with how users perceive value, make decisions, and react to choices, SaaS companies can craft pricing that not only attracts but also retains customers.

An overview of SaaS pricing models

The SaaS industry employs various pricing models beyond simple monthly or annual subscriptions, often adapting to the value delivered and the specific use case.

Subscription-based (annual recurring revenue)

This is the most common model, where customers pay a recurring fee (e.g., monthly or annually) for access to the software. Annual Recurring Revenue (ARR) is a key metric for SaaS companies, representing the total revenue expected from all active subscriptions over a year.

As mentioned above, the subscription model benefits consumers by providing ongoing updates and improvements, rather than a one-time purchase that quickly becomes outdated.

Companies that offer subscription-based pricing: Netflix, Hulu, Spotify (premium), Apple Music

Seat-based

This model charges based on the number of users or “seats” that have access to the software. Pricing scales linearly with team size, making it predictable for both the company and customer. This model works particularly well for collaboration tools and enterprise software, where value increases with the number of users.

Seat-based pricing aligns cost with usage in a way that feels fair to customers—small teams pay less, larger organizations pay more. It also creates natural expansion revenue as companies grow their teams.

Companies that use seat-based pricing: Slack (per active user per month), Zoom (per license), Asana (per team member), Monday.com (per user), Microsoft 365 (per user license)

Freemium or feature-based

A freemium pricing model offers a basic version of the product for free, with limited features or usage, while charging for advanced features or increased functionality.

Companies that use a freemium pricing model: Canva (access to limited features by giving an email address), Spotify (free model with ads and limited functionality), Figma (three free designs before payment is required).

Skill-based

A pricing model that is driven by AI tools, skill-based pricing up-charges for advanced knowledge versions of the product rather than just features. Companies offer different tiers that represent varying levels of the tool’s competency, from basic automation to expert-level performance. Pricing reflects the sophistication and accuracy of the work delivered.

Companies implementing skill-based pricing: ChatGPT Plus ($20/month) vs. ChatGPT Pro ($200/month for higher capability)

Usage-Based / Tokenization

Another option emerging with AI tools, this model charges based on the value delivered, such as the number of hits, credits consumed, or output produced (e.g., minutes of video). This often supplements a base subscription.

Companies on a token-based model: Opus, a video clipping software, where you buy “tokens” to produce content.

Hybrid Models

Many companies combine these approaches into a hybrid model. For instance, a base monthly subscription might include a certain number of “tokens,” with additional tokens available for purchase.

How consumer psychology plays into SaaS pricing

Within these different pricing models, there are usually tiers of service offered.

Consumer psychology plays a crucial role in both how pricing models are perceived and how the tiers of your plan are chosen.

In Jon MacDonald’s book, Behind The Click, which explores the psychology behind user behavior, he says, “what feels true is often more real than what is actually true,” highlighting the power of emotional appeals over pure logic in decision-making.

People make quick decisions based on mental shortcuts. Pricing tiers should align with these shortcuts rather than creating friction. “The less effort it takes to process information, the easier we can make decisions and move on to the next task,” says Jon.

To better understand the connection between consumer psychology and SaaS pricing, consider these principles.

Key Psychological Principles in SaaS Pricing

• Anchoring Bias
  • Meaning: People overly rely on the first piece of information they encounter (the “anchor”) when making subsequent decisions.
  • Impact on SaaS Pricing: The initial price presented, or the first tier a user sees, can heavily influence their perception of value for all other tiers. Companies should carefully consider which tier to highlight first. Avoid leading with discounts if the goal is to establish premium value.
• Priming Effect
  • Meaning: Subtle cues (words, images) can influence subsequent thoughts and actions.
  • Impact on SaaS Pricing: The language, imagery, and overall design of a pricing page can introduce or “prime” customers to associate certain emotions or benefits with different tiers. For example, using visuals of a simplified workflow for a basic tier and a thriving, collaborative team for an enterprise tier.
• “Bye-Now” Effect
  • Meaning: Merely reading the word “bye” can subconsciously nudge people to think of “buy.”
  • Impact on SaaS Pricing: Although subtle, this suggests that carefully chosen words in calls to action or surrounding copy on pricing pages can have a minor,subliminal influence on conversion.
• Ikea Effect
  • Meaning: People feel more attached to items they’ve created or had a hand in assembling.
  • Impact on SaaS Pricing: If a SaaS product offers customization, highlighting how users can tailor features or workflows can increase their sense of ownership and commitment, making them more likely to subscribe and retain.
• Decision Fatigue
  • Meaning: The more decisions made, the more mentally drained one becomes, leading to poorer decisions.
  • Impact on SaaS Pricing: Limit the number of choices presented on a pricing page. Use clear distinctions between tiers, recommend a “most popular” option, and provide comparison charts that simplify complex information.
• Less-Is-Better Effect
  • Meaning: People might prefer a lower-quality item when presented alone, but their preference can flip when compared to better options.
  • Impact on SaaS Pricing: When presenting tiered options, strategically place a slightly less impressive (but still functional) tier next to a desired middle-tier option. This makes the middle tier appear more valuable and appealing.
• Decoy Effect
  • Meaning: Introducing a clearly inferior “decoy” option makes a target option seem more attractive.
  • Impact on SaaS Pricing: A common strategy is to offer three tiers: a basic, a slightly more expensive but much more valuable middle tier (the target), and a very expensive, feature-rich tier (the decoy). This nudges users towards the middle.
• Bundling Bias
  • Meaning: People tend to overvalue bundled packages, even if they don’t use all the components.
  • Impact on SaaS Pricing: Offer feature bundles or user bundles within tiers. This makes customers feel like they are getting more value, even if they don’t utilize every single element.
• Loss Aversion
  • Meaning: The pain of a loss is more intense than the joy of an equivalent gain.
  • Impact on SaaS Pricing: Emphasize what customers gain by choosing a higher tier, or what they avoid losing (e.g., time, efficiency) by upgrading. Guarantees and clear refund policies reduce the perceived risk of a “bad” purchase.

SaaS pricing strategies that convert

Here are a few ways you can start turning your new psychological knowledge into revenue via your pricing strategies.

Offer pricing tiers

The way you present your pricing tiers significantly influences user perception and choice. This is where choice architecture comes into play.

People tend to avoid extremes and gravitate towards the middle option. Offering three tiers —a low-priced, feature-limited option, a mid-priced, balanced option, and a high-priced, feature-rich option —often leads users to choose the middle tier. This is because it feels like a safe and reasonable compromise.

Prioritize the customer needs

Ultimately, the most effective SaaS pricing strategy is one that is tailored to the specific needs and preferences of your target audience.

Talk to your users, understand their pain points, and learn how they perceive the value of your product. Then, experiment with different pricing tiers and messaging to see what resonates best with your target audience.

The goal is to make the right decision for them as much of a no-brainer as possible. This means understanding what problems customers are trying to solve and how each tier addresses those problems.

Segment customers

Successful pricing tiers align with customer identity and use case psychology, not just feature differences. Adobe does this well by segmenting products and pricing based on three audiences: personal/at-home, student, and professional. These are the buckets of software you can choose from, and grouping them and the prices based on how you self-identify will support users in autonomously picking the right option.

Conduct a verb-scoring exercise

If you need competitive inspiration for how other SaaS companies are feature-gating their products, try a verb-scoring exercise. Though it is pricing strategy adjacent, understanding customer expectations based on competitors can help you decide what sort of pricing model or feature-gating strategy you’d like to adopt. When done correctly, verb-scoring can help you find ways to monetize, mitigate “free trial abuse,” and acquire new users.

Frame pricing

Don’t just give a total annual or monthly cost. Emphasize the savings for upgraded plans, slice the costs differently by showing how much it costs per day or per use, or compare plan outputs. By framing the pricing differently, you can help customers see why these plans matter.

Simplify choices

More isn’t always better, and that is especially true for pricing strategy. Reduce the number of decisions customers need to make. Curated collections, clear comparison charts, and simplified product descriptions within tiers can combat decision fatigue.

Leverage social proof

Show that others are successfully using your product and how they are benefiting from it. This includes customer testimonials, reviews, “bestseller” indicators, and even real-time purchase notifications.

Don’t ignore the details

Even subtle changes to your pricing can have a significant impact on user perception. Ending prices in .99 instead of .00 can make them seem significantly cheaper, even though the difference is minimal.

In some cases, removing the currency symbol (e.g., just “30” instead of “$30”) can make the price seem less salient and more appealing.

Finally, visually highlighting the plan that offers the best value can draw attention to it and increase its adoption rate. A badge or a different color can do wonders here.

Review your pricing strategy for more conversions

Successful SaaS pricing is a blend of art and science. By strategically applying the psychological principles and strategies outlined, SaaS companies can design pricing tiers that not only make economic sense but also resonate deeply with the human element of decision-making. Doing so logically leads to higher conversions and sustained customer loyalty.

Start by auditing your current pricing through a psychological lens. Are you creating clear choices without overwhelming options? Does your tier structure align with customer identity and use cases? Are you leveraging social proof and strategic framing?

When you have some ideas for improvement, test them with your users to see what should be implemented. And if you’re looking for other monetization strategies, get in touch.

The post The Psychology Behind Successful SaaS Pricing appeared first on The Good.

Well, you shouldn’t give away your entire product. It’s a strategic balance between unlocking features to engage new users and gating high-value features that warrant a paid subscription (we’ll get into how to decide what to keep in each tier later on).

This strategy is called freemium pricing, and it’s the source of growth for countless digital brands across the software industry. These brands attract millions of users with some free access and then charge for advanced features or uncapped limits.

Is the freemium pricing strategy right for your digital product? Let’s explore this technique to help you decide.

What is Freemium Pricing?

Freemium – a mix of the words “free” and “premium” – is a business model that offers basic features of a product or service for free but places richer or supplemental features behind a paywall. The fee is typically a subscription.

The free tier is usually a stripped-down version of the product, limited to only the basic functionality that users need to get a taste of the product without making a financial commitment. In some cases, upgrading from the base product to a premium version removes an unpleasant obstruction (e.g., paid Spotify accounts are ad-free).

Dropbox is a traditional example of a successful freemium model. Users can store up to 2GB of files for free, but if you need more space, you have to upgrade to a paid tier.

The goal of the freemium approach is to attract a large number of users who are happy to use a free product but unwilling to pay for something unfamiliar. Over time, some of those users decide to pay for the additional features.

The term “freemium” was coined in the early 2000s, but the concept originates with the freeware and shareware distribution models of the 1980s and 1990s that only charged users after they received some value from the product.

Examples of Freemium Pricing

The best way to understand freemium pricing is to look at some notable examples. These familiar companies are leveraging the freemium model well.

1. LinkedIn: Freemium + Free Trial

Most of us are familiar with LinkedIn’s free social networking platform with basic features, but you can also upgrade to a premium tier to get useful additional features, such as more direct messages, better searching, and insights about people and companies. The premium tier also offers a one-month free trial.

2. Google Workspace

Like most people, you probably use one or several of Google’s free products. But you can get advanced features – especially for businesses – by upgrading to one of their paid tiers. Premium plans offer higher usage limits, enhanced features, and additional services.

3. Zoom

Zoom exploded during the pandemic, largely due to its free tier that lets anyone try the basic product for free for an unlimited period of time. However, once you start using it regularly, the paid features will start to look very attractive.

4. Zapier

Zapier users are limited on the type and number of “zaps” they can run each month. Once you have a workflow setup, it’s easy to decide to pay to keep things working smoothly.

Which Features Should Be Free?

Now that you understand how the freemium pricing model works, let’s talk about your product.

Which features should be free, and which should require payment?

Before deciding which features to gate or keep free, it can be helpful to conduct a verb scoring exercise.

Verb scoring is the act of evaluating actions that users can take in your and your competitor’s products and then scoring them based on the level user of entitlements (or the amount of friction) required to perform the action.

Verbs are the core features of your product broken down into discrete actions, such as creating a ticket, editing a transcript, or sharing a document with a friend. For instance, if users can create and resize a document, create and resize are verbs.

Once you understand all your product’s verbs and how they affect the user experience, you can tweak your product strategy to optimize for user acquisition and conversion to paid accounts.

Learn more here: 9 Use Cases For Verb Scoring To Support A Successful Product Strategy

Once you understand the current state of both your and your competitors’ verbs, you can move on with adjusting to a freemium strategy.

Free Features

The free version of your product should include the core value features that a majority of your users care about the most. These are the features that solve their basic problems and help them realize the purpose of your product.

How do you determine which features users care about the most?

In some cases it will be obvious, but in most, It’s a strategic process that will depend on your product. Elena Verna, Head of Growth at Dropbox, has a decision tree to help leaders answer what should be free vs paid.

Paid Features

Once you know which features are part of your product’s core value and should be free, everything else should go into the premium tiers.

There are three ways to add gates to your product for upgrading:

• Functional limitations: Limits on the specific features users can access. Example: YouTube Music offers offline watching to paid users, but not free users.
• Quota limitations: Limits on how much users can use features. Example: DropBox offers 2GB of storage to free users but much more to paid users.
• Support limitations: Limits on the customer service users get from the company. This is usually only associated with enterprise-level products that require deep customization.

What’s important, however, is that your users clearly understand the benefits of upgrading to a paid account. In most cases, this means making your offer simple. It should be something people understand intuitively and something they can share easily with their friends.

Dropbox is the quintessential example: “Upgrade from 2GB to 2TB of storage” is as simple as it gets. (There are other benefits, but storage is the main driver.) Once a satisfied user hits the cap, they are likely to upgrade.

Finding the Balance

Admittedly, the right balance of free and paid features is tricky to find. You’ll have to start with your best guess (based on data and research, of course, not a shot in the dark) and optimize as you learn more.

Keep in mind that the main goal of the freemium pricing model is to attract new users to your product. If that isn’t happening, it could mean your free offering isn’t compelling enough. In this case, you’ll need to provide more free features or better features.

But what if you have many users but no one upgrades to a paid tier? In this case, it probably means you’re giving away too much. You’ll have to reduce your free offering so users have a reason to pay for the product.

What are the Advantages of Freemium Pricing?

So, what makes the freemium strategy so great? Why do so many digital brands use it? Let’s look at the benefits of freemium pricing.

1. Attracts a Large User Base

Freemium pricing lowers the entry barrier for many customers. They can try your product without making a commitment. Naturally, this leads to more users. Think of every free user as a “warm lead” that you can convert into a customer.

Furthermore, a large user base creates more brand visibility. You end up with more people talking about and sharing your product.

2. Provides Valuable User Feedback

With more users trying your product, you can access a broader range of feedback. This information helps your team identify ways to improve the product. It also helps you understand your product because you can distinguish between who would use it and who would pay for it.

3. Creates Opportunities for Upselling

Over time, freemium users become hooked on the core features and start to desire the rest. With the right incentives at the right time, converting them into customers is straightforward.

This is especially true for businesses that use your product as part of their workflow. Eventually, it becomes painful to switch to a new product.

4. Builds Brand Loyalty

Many people appreciate companies that allow them to try before they buy, and that positive experience can translate into long-term loyalty. Even if some users never convert, they might recommend your product to others.

What are the Disadvantages of Freemium Pricing?

Those benefits of freemium pricing sound great, right? Like all pricing models, there are some downsides. Understanding the challenges of freemium pricing will help you minimize their impact.

1. High Operational Costs with Free Users

Supporting a large base of non-paying users can get expensive. You’ll need to maintain servers, customer support, and other resources for users who may never convert to a paid plan. This is unsustainable if the cost of maintaining those users outweighs the revenue of paying customers.

2. Difficult to Monetize

In some cases, it can be challenging to find the sweet spot for monetization. Offering too few features in the free version can discourage sign-ups, while offering too many can hurt freemium conversion rates. Finding the right pricing structure requires constant testing and adjustment.

3. Potential Devaluation of Your Product

When users get something for free, they may not always perceive the product as valuable. This can make it harder to justify the price of your premium offerings. The perceived value of your product needs to be clear, or users might never consider upgrading.

Alternative Pricing Strategies

While the freemium business model is right for some organizations, it’s not the only option. Depending on your business model and goals, you may want to explore other pricing strategies.

In fact, it’s perfectly fine to use multiple pricing strategies at the same time. For instance, you might offer a free trial and then switch to usage-based pricing. Or you might go with a freemium model with premium features charged on a per-user basis.

The point here is that you have a lot of options, so it’s important to conduct thorough research to learn about your customer base and experiment with different models.

Let’s take a look at a few more of the popular pricing options.

1. Free Trial

Instead of offering a permanent free version, a free trial gives users access to all the product’s features for a limited time. The free trial period usually lasts seven to 30 days. Users feel a sense of urgency to decide whether to buy before the trial ends. Like freemium pricing, free trials let users experience the product before buying.

2. Tiered Pricing

Tiered pricing offers several plans at different price points, each with its own set of features. These additional tiers allow you to offer plans that meet the needs of different customer segments. If a user is willing to pay more, they get more value.

3. Usage-Based Pricing (Pay-as-You-Go)

In usage-based pricing, users only pay for what they use. It’s a great model to attract users who may be hesitant to commit to a flat subscription fee. For instance, a cloud services customer can’t pay much until they have users, but they also won’t use your product much.

4. Flat-Rate Pricing

Flat-rate pricing is the most basic model: users pay a single price for all features, typically on a monthly or annual basis. This pricing is easy to understand and appeals to users who want simplicity and predictability.

5. Per-User Pricing

Common in SaaS, per-user pricing charges customers based on the number of users who will access the product on the same team. It’s scalable and easy to understand, especially for businesses that want to manage costs as they grow.

Freemium Product FAQs

We dived deep into freemium pricing, but you may still have questions. These FAQs will help!

Is a Free Trial the Same as a Freemium?

No, a free trial provides temporary access to all features, while a freemium approach offers a limited feature set indefinitely. That said, free trials and premium models are often used together.

Does Freemium Pricing Increase the Number of Potential Customers?

Yes, it often attracts more users since there’s no upfront cost, which helps build a larger user base. But it only works if your free features are truly valuable for your potential customers.

Can Freemium Lead to a Loss of Income?

It can if too many users stay on the free plan without upgrading or if the cost to support them on the basic version exceeds revenue. To avoid this, it’s important to carefully select which features are free and which are paid and Implement a smart conversion strategy.

What Should You Consider Before Using Freemium Pricing?

Consider your core offering, customer acquisition costs, conversion strategies, support costs, and how to balance free versus paid features. All of these concepts work together as part of the freemium model.

How Do You Convert Free Users to a Premium Plan?

Convert users to premium plans by showing the value of premium features, using targeted messaging, and creating usage limits that encourage upgrades. Like all strategies, this requires careful research into your customer and experimentation to find the optimal balance.

What Percentage of Users Typically Convert From Free to Paid?

Conversion rates for freemium customers vary but are often between 2-5%, depending on the product and market. But that doesn’t mean that 5% is your ceiling. Some well-optimized product strategies have achieved greater conversion rates.

How Long Should You Expect Users to Stay on the Free Plan?

Many users will stay indefinitely, but successful conversion often occurs within the first few months. If you don’t see a reasonable number of conversions within the first three months, consider adjusting your conversion strategy.

Is Freemium Pricing Suitable for All SaaS Products?

Not always. It works best when there’s a clear upgrade path (basic services vs. premium services), and the free features provide value without giving away too much. Free features should also be relatively inexpensive for the SaaS to provide.

How Do You Avoid Cannibalizing Paid Sales With a Freemium Plan?

By offering enough value to free users without giving away advanced features that drive upgrades. If a majority of your users are sufficiently served by the free features, consider adding more limitations.

What Metrics Should You Track in a Freemium Model?

Track user acquisition, activation, average conversion rate, churn rate, and customer lifetime value.

Can Freemium Impact Brand Perception?

Yes, positively or negatively. A well-executed freemium can build goodwill, but a poor free offering can harm brand value. It’s a good idea to conduct some brand monitoring when you launch your freemium pricing product.

What are Some Common Mistakes SaaS Companies Make With Freemium?

Offering too many features for free, lacking a clear upgrade path, or failing to effectively monetize the user base. Alternatively, some companies leave too many features behind the premium tiers, which fails to attract enough users.

Is Freemium Pricing Right for You?

The freemium pricing strategy is a powerful technique, but that doesn’t mean it’s right for every digital product. And even if it makes sense for your product, it has to be handled carefully.

For many brands, the solution is to bring in an outside optimization team who will help you explore options and find the right path.

Our Digital Experience Optimization Program can help you unlock the full potential of your website, app, or digital product by optimizing the user experience according to your pricing strategy.

The post How To Use Freemium Pricing To Drive User Acquisition and Adoption appeared first on The Good.

About This Episode:

This week on Drive & Convert, Jon and Ryan discuss how to convert free trial users to paying customers. 

Check out the full episode to learn:

1. The importance of optimizing the free trial experience for SaaS brands.
2. How to gain an understanding of the factors that motivate your users to buy.
3. Proven strategies to encourage your users to convert from free to paid.

The resource Jon mentions in the episode can be found on thegood.com here.

If you have questions, ideas, or feedback to share, connect with us on LinkedIn. We’re Jon Macdonald and Ryan Garrow.

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Episode Transcript:

[00:00:00] Announcer: You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon McDonald and Ryan Garrow.

[00:00:15] Ryan Garrow: All right, Jon, you have given me a topic that you want to talk about today. That is something we’ve not done a ton of on this podcast. We’re going to, we’re going to dabble in talking more in the SaaS side of the world than the[00:00:30] e-comm side of the world today. And, I mean it probably could be some e-comm stuff, I don’t know how it would work as well, but you get to give me some insight today on how to move a free trial customer to a paying customer.

[00:00:42] Ryan Garrow: Isn’t that, is that something, did I understand correctly? 

[00:00:45] Jon MacDonald: Yes. Thank you for humoring me and letting me talk about this today. today. And I do think it applies to some degree to e-commerce brands as well, because there are brands who offer free trials or, and there are different methods of doing that in e [00:01:00] com.

[00:01:00] Jon MacDonald: The ones we’ll talk about today could, with a little bit of adjustment, be used for e-comm, but. The home for these is really in SaaS. That is where most free trials have started and been utilized over the years. And some e-comm folks have taken that and run with it since. 

[00:01:18] Ryan Garrow: Yeah, I think a couple of things, like I don’t know as much about SaaS as I do e-comm.

[00:01:22] Ryan Garrow: And so I’m actually really interested in a lot of how these work, because as my brain will probably go right to how do I apply this to the [00:01:30] Thousands of e-comm customers we work with in looking at how they do trial subscriptions, how they do memberships for free that they can move into a premium price point.

[00:01:39] Ryan Garrow: So that’s how my brain’s going to be thinking through a lot of this and some of you out there maybe as well, but Jon does handle some of the largest. lead gen companies out there and helps with their conversion and optimization. So his brain is well tuned to success in this for sure. 

[00:01:55] Jon MacDonald: I appreciate that.

[00:01:56] Jon MacDonald: It is all my team’s doing here at the good. So I [00:02:00] will say that I know what’s going on. I, there are way smarter folks here than me at this point, which is a good area to be in. But yeah, let’s talk a little bit about converting these free trial users into paying customers, because I think that it’s really important.

[00:02:15] Jon MacDonald: There’s no secret that free trials are the, where the most SaaS organizations mess up in my opinion, right? And this is because no one signs up for a free trial unless, they want to learn more about your product, but these free trials get pushed [00:02:30] off to the side a little bit. It’s a great lead gen tool for them, but not necessarily something they optimize.

[00:02:36] Jon MacDonald: We’ve had a lot of success doing that because we take a unique perspective on this. And that’s that most customers are signing up to, to learn how your product benefits them. They’re not looking to just get a free trial. They couldn’t care if you offer one feature or 50 features. They want, just want the product to solve their problems and make their life easier.

[00:02:57] Jon MacDonald: So that’s very similar to [00:03:00] Ecom and a very similar problem, right? Again, it’s only two reasons people are at your website, because they have a pain or need and they think you can solve it, and then they want to convert and accomplish that as quickly and easily as possible and get on with their lives. If you want to convert these free trial users, your task is to show them how your product meets their needs.

[00:03:20] Jon MacDonald: And that’s it. If you can’t help them achieve that desired outcome, it’s They’re just simply not going to buy, doesn’t matter how much of a trial or whether it’s free or not. 

[00:03:29] Ryan Garrow: [00:03:30] Interesting. I like how that’s been put there around how you’re solving a problem rather than, it’s I feel like I get sold a lot of features on these.

[00:03:37] Ryan Garrow: So hopefully I can go back to these-commpanies and be like, no, go listen to this podcast with Jon cause he’ll solve all your problems and I’ll give you my money. Yeah. 

[00:03:43] Jon MacDonald: SaaS, even in pricing with SaaS is a traditional thing. three up table pricing, and that’s a checklist of features under each table.

[00:03:50] Ryan Garrow: Further down it goes, the more value it has to me, supposedly. The 

[00:03:53] Jon MacDonald: more features, not necessarily the benefits to the user all the time. It’s a good way to focus on that. [00:04:00] What’s the old adage in advertising that nobody’s buying the hammer? They’re buying the ability to basically nail something together, right?

[00:04:09] Jon MacDonald: That’s their goal. So it’s the same adage here with your SaaS products. 

[00:04:14] Ryan Garrow: Okay. So as we dig into the data here that we do have to look at some of the normal metrics that I think of without thinking a little bit differently, like the conversion rate is not as a SaaS company necessarily focus on the how many people sign up for a free trial.

[00:04:27] Ryan Garrow: That’s nice, but the real important metric is. [00:04:30] How do they go from my free product to a paid product? And that is a slightly different conversion rate than what analytics tracks, for example. 

[00:04:37] Jon MacDonald: Exactly. Now, if your marketing’s job is to get more people into a free trial, and that is considered a lead, then it is your job as a product owner, conversion person, to make sure that they convert from free to paid.

[00:04:51] Jon MacDonald: And so that is the conversion rate that matters, in my mind. It measures the percentage of users who transition from a free version of a product into a paid [00:05:00] version, right? And a lot, we’ll talk about different models, if you don’t convert this, it can cost your company a lot of money and not just in customer acquisition costs.

[00:05:09] Jon MacDonald: It can cost you a ton of money in server fees and everything else to service those folks. Think about All of these AI apps that are out there right now, they’re not, they didn’t build their own AI. They’re using open AI or chat GPT’s API calls, right? And those add up so quickly. And so [00:05:30] you really need to be conscious of giving people too much free runway.

[00:05:34] Jon MacDonald: without focusing on converting them. So if you want users to upgrade to these paid tiers, there’s really an important metric to track. And it’s also important for these freemium models where users can access some of these features for free and are encouraged to pay for more premium features. And we’ll get into those models, but there’s a formula that I think we need to start with just to level set.

[00:05:57] Jon MacDonald: And this is a free to paid conversion. conversion [00:06:00] rate. That is the number of users who convert to paid divided by the total number of free users times 100. Okay, so total number of users who convert to paid divided by the total number of those free users times 100. So not too dissimilar from a conversion rate.

[00:06:18] Jon MacDonald: But okay, let’s do an example. So let’s say a SaaS company has 10, 000 free users, 500 of them upgrade to a paid version. The free to paid conversion rate would be [00:06:30] 500 divided by 10, 000 times 100%. And that gives you 5%. Okay. 

[00:06:35] Ryan Garrow: So it’s interesting how you could turn off lead gen marketing and not get any new leads, but you could still be working on increasing your conversion rate, even without that new traffic, cause your free users are still 10, 000.

[00:06:47] Ryan Garrow: And then you just pick, a timeline to figure out your conversion rate. Oh, we had 200 this week convert, so our conversion rate this week was 2%. 

[00:06:55] Jon MacDonald: Exactly. And it’s interesting because so many SaaS brands [00:07:00] focus on getting more people into that funnel when really what they need to do is focus on converting the folks that are in that free trial already.

[00:07:07] Jon MacDonald: And a lot of them offer, free trials that last a very long time six weeks, a month. Three months, whatever it might be. The challenge with that is you’re now extending that window, right? So as you can imagine, you’re going to really want to push that number as high as possible as more conversions to paid account.

[00:07:26] Jon MacDonald: That’s when you get your revenue. Want to focus on the revenue and then the profit, [00:07:30] that is where you need to look. 

[00:07:31] Ryan Garrow: Yeah, I can see how a marketing team would like a really long free trial to be like, Oh no, we don’t need to change that. Just keeping the free trial. So we have a chance to sell them moving forward because I would be worried about, losing the opportunity when in reality, it’s probably not likely that person is going to convert if they’ve been a free user for so long.

[00:07:49] Jon MacDonald: Let’s talk about how to convert these free users before we do that, because I really want to level set on a couple of things. One of them I want to talk about is what I mean by a free trial. Okay. [00:08:00] And let’s come back to that point though, because I really want to talk about why that’s a misnomer for these marketing teams.

[00:08:07] Jon MacDonald: So there’s actually three different types or models around free trials. And there’s a whole bunch of tactics under each of these, but there’s three main groups and that is the freemium model, which most of us know about, right? There’s the reverse trial, which is probably new to a lot of folks. And then there’s a trial with payment, which once I tell you what it is [00:08:30] you’ll know what it is already.

[00:08:31] Jon MacDonald: But a freemium model is a two tiered model with a free tier and a premium plan. Pretty simple, right? This is the traditional SaaS model. We’ll grant you free perpetual access to a restricted version of our product, hoping that by limiting the accessible features, maybe giving you four out of six or something of that sort, and.

[00:08:53] Jon MacDonald: Placing caps on the features. Maybe you only get X number of downloads a month. This is the [00:09:00] hope that you will upgrade to a paid version to access all the full features that you’re going to hit that wall with usage. And you’re going to say, you know what I want to level up. I’m going to pay.

[00:09:08] Jon MacDonald: You can also think about this in some cases, freemium users can. get charged in a la carte for usage, meaning that you could say if you, maybe it’s the platform’s free, but every time you download it to dollar, right? Something of that sort, right? So there’s a couple of ways you could do freemium here, but this is what everybody knows.

[00:09:26] Jon MacDonald: Oh, I’m going to get your platform. You’re going to let me do a [00:09:30] limited subset of items. When I need more, I’m going to have to pay make sense. I’m paying for my usage, but this is where marketing teams can really mess up because they’re trying to get everybody into a free model. And the expectation is it’s going to perpetually be free.

[00:09:44] Jon MacDonald: That costs the -commpany a lot of money in the end, right? To service those folks. Just think about all the support alone when somebody has a challenge and they’re not paying. The second model is a reverse trial. This is one that I mentioned might be new to some folks. It’s a time based [00:10:00] approach and this was actually coined at Dropbox.

[00:10:02] Jon MacDonald: And users start with a full access to the features for a limited time during a trial phase. Okay. Why is this a reverse? They get moved to a freemium plan with limited product features after that time is up. So for a limited time, they’re getting the product’s maximum value at the beginning of that trial experience.

[00:10:21] Jon MacDonald: And if they want to regain access to those full features, at that point, they’re going to need to. Okay. purchase a paid plan. 

[00:10:27] Jon MacDonald: So I like that one.

[00:10:28] Jon MacDonald: Yeah. If you think about it, this [00:10:30] works really well at products like Dropbox because once you have all your files uploaded to the Dropbox and you want to access those later, you got to start paying.

[00:10:37] Jon MacDonald: It works really well when you have that hook, that mechanism that hooks people in and they’re not going to want to give up that access later. The third is trial with payment. Now in a trial with payment, users are required to provide their payment information upfront. You’ll see on SaaSs a lot of times, or even e-commmerce subscription products that say no credit card required.

[00:10:58] Jon MacDonald: That’s because a lot of people [00:11:00] have grown tired of trial with payment, meaning I’m going to give you my credit card. You’re going to give me 30 days or whatever limited period of time, free access. And that trial is free until specified date until agreed upon date, at which point you’re going to charge me a recurring subscription for that full suite of products.

[00:11:19] Jon MacDonald: So you’re basically. I’m giving you the authorization to charge me in the future unless I cancel beforehand. Now the number one problem with this is that brands make [00:11:30] a ton of money on this by people who forget to unsubscribe, right? We’ve talked about this before. I’m guilty 

[00:11:36] Ryan Garrow: of not unsubscribing and then being mad at myself.

[00:11:39] Jon MacDonald: And this is such a epidemic that there’s TV commercials for services that do nothing but look through all your transactions and alert you to what you have for recurring charges and then let you push a button to cancel that service. So it’s really interesting that this has become so frowned upon and it’s become such a [00:12:00] problem that people are willing to spend hundreds of millions of dollars to advertise.

[00:12:04] Jon MacDonald: To get you to use their product just to solve this problem. So it obviously works. It gets people to convert, but it also creates a down, downward effect. 

[00:12:14] Ryan Garrow: Yeah. So I know which one I don’t like the best because I fall in prey to it. Is there one of these that you think works better than the other two? 

[00:12:22] Jon MacDonald: Yeah, I think it really depends on the product itself.

[00:12:26] Jon MacDonald: Okay. So like that reverse trial I mentioned. You have to have a [00:12:30] product like Dropbox where you’re providing a lot of value that creates lock in, right? If you don’t have that lock in, at that point, you’re really gonna, just, everyone’s gonna flee you when that reverse trial happens, okay? The freemium model, great, but you better have a really good product that people are like, yeah, this is free and I want I need more access.

[00:12:50] Jon MacDonald: It’s impeding my workability or my personal life, whatever it might be. 

[00:12:54] Ryan Garrow: Yeah. And you’ve probably got to have a good enough product to get me like, so I get some value out of that, [00:13:00] but then I can, Whoa, I can see how my life gets so much better with this. That’s probably not an easy one to pull off.

[00:13:08] Jon MacDonald: It’s not, unfortunately, because. First of all, there’s always the consumers who are going to try to hack their way around it, right? I know people who use Dropbox and always are downloading their files and only uploading what they have to the maximum space just so they can share files with people.

[00:13:25] Jon MacDonald: So they’ll go in and they’ll upload whatever they need and then store it there and then when [00:13:30] they’re, done, they’ll download it and delete it off of Dropbox so they keep that space. It’s a pain in the butt for those users, but they don’t want to pay. So they’re willing to stick within that limited time frame, right?

[00:13:41] Jon MacDonald: There’s people who go out and just create another account and get a whole nother free trial or whatever it may be, right? So you, there’s a lot of ways that consumers will try to hack this and you need to understand what is the model that is going to provide so much value for your consumers that they won’t try to [00:14:00] hack it, that they’ll just pay because it’s easier to do that and keep all their, data together, their preferences, whatever it might be.

[00:14:06] Jon MacDonald: And they’ll also say, Hey, you know what? You’re giving me so much value that yeah, I’ll pay for more access. Like it’s worth it. 

[00:14:13] Announcer: You’re listening to Drive and Convert, a podcast focused on e-commmerce growth. Your hosts are Jon McDonald, founder of The Good, a conversion rate optimization agency that works with e-commmerce brands to help convert more of their visitors into buyers and Ryan Garrow of Logical Position, [00:14:30] a digital marketing agency offering pay per click management search engines optimization and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you. 

[00:14:47] Ryan Garrow: Because certain things I am a hundred percent guilty of. Like new emails. Like I’ve done a lot of that personal hacking in business.

[00:14:55] Ryan Garrow: And so sorry for all the SaaS companies out there that you’ve got a lot of my [00:15:00] accounts in there, but for some of them, there was probably a price point that I would have assigned that value. And it was probably to me. Yes. Okay, fine. It is worth five bucks a month for me. And I don’t have to go through the hassle of.

[00:15:11] Ryan Garrow: Creating a new account, but maybe they wanted 30 bucks and I’m like that for me was a threshold that it’s better off for me to hack around it. 

[00:15:19] Jon MacDonald: Yeah pricing is a whole nother game, right? For sure. And there are commpanies that do nothing but focus on SaaS pricing. It’s that complicated of a challenge.

[00:15:29] Ryan Garrow: [00:15:30] Got it. Because I assume it’s sliding scales like, okay you could go to 5 to get Ryan, but then you’re actually making, two pennies per user and nobody wants to SaaSs with 0. 1 percent margin, 

[00:15:40] Jon MacDonald: right? Otherwise you might as well be in the agency business, right? Yeah. 

[00:15:44] Ryan Garrow: Come work with us.

[00:15:45] Ryan Garrow: It’s great. 

[00:15:46] Jon MacDonald: The reality on this too is. You have to understand that in SaaS, the less support, the less people or accounts you have to support, the better, because that is going to be a big portion of your margin, [00:16:00] is people talking to people about their problems, right? If you have someone who converts at 5, You could also charge 25, then you don’t want to deal with the extra four people, right?

[00:16:13] Jon MacDonald: Five times five is 25. So it’d be five users at 5 or one user at 25. If I’m thinking about it, the margin is going to look a lot better at that 25 probably not even because I’m getting 20 extra dollars a month out of that user has more to do with the fact that. that I’m not [00:16:30] servicing five people.

[00:16:31] Jon MacDonald: Now I don’t have to worry about five accounts. I have to worry about one, and that’s really where I think a lot of the margins will end up. 

[00:16:37] Ryan Garrow: Yeah, that’s, I love that. A great example of that is to help make it clear for me. But what we’re talking about really is not pricing. Cause that’s a different conversation.

[00:16:44] Ryan Garrow: We want to know how do we actually move these people from free to paid because that’s not a simple process. Because people like me make it difficult. 

[00:16:53] Jon MacDonald: Cheaters like, like us, right? Converting free trial users to paid users is really, goes back to just [00:17:00] demonstrating your product’s value, right?

[00:17:02] Jon MacDonald: This is what I was saying up front where, how is it benefiting your consumers that sign up for an account, not what the features are, right? So you can do this by strategically placing messaging throughout your site and or your app. But keep in mind that your free trial signups already know the product is good.

[00:17:20] Jon MacDonald: What I mean by that is. You got them to sign up in the first place. So there’s some hope of benefit there for them, right? Cause getting them to sign up, whether it’s a free trial or not still can be a [00:17:30] pain in the butt. It still takes some effort. Okay. No matter how one login you use, or if I can log in with my Google account, whatever it is that, yeah, that kind of makes it easier, but it’s not perfect.

[00:17:41] Jon MacDonald: No, no sign up is so your job is to convince them that the value they’re going to get from the product is worth the price. And there’s several ways to do this, right? So you can highlight benefits. Pretty simple, right? We’ve talked a lot about benefits. You offer social proof. You give benefits. Product tours, right?

[00:17:59] Jon MacDonald: What are [00:18:00] all the functionality and features you’re missing? I actually just onboarded for a tool that gave me a seven day free trial. But if I went to their weekly product onboarding webinar that they do, it was a live webinar, and if I got on there. registered and attended, they would double it to two weeks.

[00:18:18] Jon MacDonald: And they did that because they were confident that if I figured out how to use the product effectively within that two weeks, I would subscribe. And so I was really interested in [00:18:30] this and I started chatting in the chat during the webinar, like I didn’t know who else was on this webinar.

[00:18:35] Jon MacDonald: It turns out there were dozens of people on there, which was awesome. So the offer. Of extending the trial obviously works, but the information was great. But I also started asking them like, how’s this work for you? Does this convert? I’m really intrigued by this model. I haven’t seen someone do this before.

[00:18:51] Jon MacDonald: How’d you get this idea? And they were very cool and answered my questions. But at some point during the webinar, they’re like, look, Hey, Jon, we see your questions. That’s [00:19:00] awesome. Hit me up on LinkedIn. I want to chat about this. It sounds a lot about what we’re trying to do here, but that’s not what we’re doing.

[00:19:05] Jon MacDonald: We’re here to talk about the onboarding.

[00:19:10] Jon MacDonald: But I was also, this is how I nerd out and I thought it was interesting. So give those product tours maybe with some incentive and boost your users engagement, right? So they were doing both of those with that example. I don’t think you can invite this kind of thinking unless you know your customers right?

[00:19:26] Jon MacDonald: Once you know what triggers them to buy, then you can build [00:19:30] your user experience around that. that will convince them to convert. So you can’t just put banners up everywhere that says you’re in free trial. Click here to convert. You have to understand where the value is and then add that notification where the value might be missing for them.

[00:19:44] Jon MacDonald: But if they paid, they would get that, unlock that extra value. 

[00:19:47] Ryan Garrow: Got it. Okay. And so what are some of the strategies you leverage them when you’re trying to move these people through? Because you’ve. You’ve got to have, areas in that you can test and measure, I assume, because it’s Jon McDonald.

[00:19:59] Ryan Garrow: You’ve [00:20:00] done this. 

[00:20:00] Jon MacDonald: Always down to test it, right? We actually have this really great resource up on thegood. com. So if you go to thegood. com, click on insights. There’s a search box there. It’s the encyclopedia of our content from 15, almost 16 years. Search for free trial in that box. It’s right up there.

[00:20:18] Jon MacDonald: And the article and resource will come up. It’s got, I think, nine or so specific detailed strategies with examples that you can use. If you really want to dive in, we’ll cover a couple of those [00:20:30] today, but that resource article is way too long to talk about all nine of these on a podcast. So, I’ll highlight a couple of them.

[00:20:38] Jon MacDonald: But I highly recommend checking out that full list. Now you should use some, or you could use these in conjunction with each other, right? So you don’t have to just stick to one of these options. These are just ideas that there are several different ones and you can test and combine them and experiment really to find the ones that are going to produce the best results for your brand.

[00:20:58] Jon MacDonald: Okay. So I [00:21:00] talked a lot a minute ago about putting up notifications. You really need to remind your users to upgrade early and often, right? Don’t make the mistake of waiting until the end of the free trial to prompt users to upgrade. I can’t stand anything more than I go to log into an app, and I had no idea that the free trial was going to be up soon.

[00:21:21] Jon MacDonald: They didn’t send emails. They didn’t tell me in the app. I go to log in, and it’s Oh, your free trial is over. And I was ready, primed, trying to get work done [00:21:30] aside on my calendar. It was just a really frustrating experience. So don’t make that mistake, right? Prompt your users to upgrade from the beginning of their experience and remind them that they aren’t getting that full feature.

[00:21:42] Jon MacDonald: You can do CTAs. You can do this in app notifications, tooltips. pop up overlays, onboarding videos, support messages, right? So if they’re looking for support, you can, in the reply to that, you could mention the upgrade and just the general email marketing flows. So you have a lot of options for [00:22:00] where you can do this, but don’t wait till the end to do that.

[00:22:03] Jon MacDonald: That’s where you end up with problems. 

[00:22:04] Ryan Garrow: And I, and if I’m in a free trial, I get it. You’re going to try to convert me. So I’m not going to be mad that you’re messaging me like you can do it too often. I assume just like most things, but you probably also have to assume that not all of your emails are hitting my inbox or I automatically put them in clutter or something like that.

[00:22:22] Ryan Garrow: So test and measure likely those different calls to action and different areas to hit me 

[00:22:26] Jon MacDonald: for sure. And this is the next one, which is. It’s to present [00:22:30] gated features near free features, okay? So what I’m saying here is strategically place these prompts or highlight these premium features adjacent to free ones.

[00:22:40] Jon MacDonald: So you create this opportunity for those free trial users to envision how the paid ones We’ll enhance their experience, right? So this also has serves the benefit of consistently reminding what they’re missing. It sparks that curiosity and it demonstrates the tangible benefits of upgrading. So in the same vein that you were just talking about, I’m not going to [00:23:00] be upset that you’re reminding me I’m on the free level.

[00:23:03] Jon MacDonald: I’m also not going to be upset that you’re reminding me that there’s potentially a better world over here. If I pay, I can get access to, I know I’m not paying. Thank you. I know that I’m on the free trial, so it’s okay to remind them of what they need to do there. The next one is to offer great onboarding experience.

[00:23:20] Jon MacDonald: I gave that example a minute ago, but the onboarding process is really, it’s that first impression that they’re going to have of your product or service. And [00:23:30] a positive experience here is significantly going to influence the decision to upgrade. We have for SaaS brands, we’ve worked sometimes on nothing but that onboarding experience.

[00:23:39] Jon MacDonald: And there are actually companies out there that focus exclusively on onboarding experiences. It is that important. If you. Go in and you’re going to provide this clear, concise step-by-step guide. You can use things like tool tips, interactive tutorial, walkthroughs to highlight these key features and even demonstrations [00:24:00] on how to use everything effectively.

[00:24:01] Jon MacDonald: There is a tool out there, a sales tool, it’s called Clay, C L A Y. That’s a sales automation tool. That’s really taken off right now. They are the masters at this. They have done nothing but. On LinkedIn, they have people who are just creating one to two minute videos of how to use specific functionality that is really interesting.

[00:24:22] Jon MacDonald: And you start getting, planting that seed of, Oh, wow, you mean I can create this flow to do this specific task? [00:24:30] Specific action. That’s really cool. I bet I could combine that with these other ideas I’m now having or man, I saw this other video last week that can combine with what I’ve seen right now. So that type of onboarding and awareness can go a really long way to converting people.

[00:24:46] Jon MacDonald: This last one is to use paywalls to demonstrate these paid features. Now, we all hate paywalls. I get it. Everybody hates a paywall. Nobody wants to be hit with a paywall. It’s called a wall for a reason. Now, the value that it demonstrates, [00:25:00] though, is that it entices users to upgrade to unlock the full access because they were trying to do something that they wanted to do.

[00:25:07] Jon MacDonald: It’s a great time to tell them, you don’t have access for this, but you just pay and you get access. And if you design it really thoughtfully, they can drive conversions without causing a lot of frustration. Now, we did this, we’ve done at the good. We’ve overhauled paywalls for The Economist, for The Telegraph, and a few other publications.

[00:25:26] Jon MacDonald: And that’s been really great because [00:25:30] everybody hates hitting the paywalls. And they try to go use other browsers, incognito mode, whatever, just to continue their experience. So how can you make it really easy for them and what does that look like? Now, each paywall should clearly articulate the benefits of upgrading to a paid version.

[00:25:48] Jon MacDonald: Okay? We really want to persuade people through that messaging, highlight the key value propositions and make sure they know what they’re going to get. Now, one of the coolest paywalls I’ve ever seen that worked extremely well [00:26:00] was I hit the paywall and then it said, you know what? We will give you access, if you just give us your email address, we’ll continue to give you access to two additional articles a day.

[00:26:12] Jon MacDonald: So I got the three free that everybody gets, but if I would get up to five, if I just gave them my email address now. That felt like a great exchange of value because they now know who I am. And what that meant was every once in a while I was getting a reminder that was tailored for me, [00:26:30] right? Because it had, they knew they were able to track what I read, what I liked, and they were able to then, Taylor, the messaging, Hey, you would like more of this type of content or, Hey, this article is coming out, or did you miss this article, et cetera, to try to show me how much value, but personalize that, right?

[00:26:48] Jon MacDonald: So there are a lot of ways to handle this. And. Those were just four pretty simple paywall or excuse me, conversion strategies that were the paywall, the great onboarding experience [00:27:00] present gated features next to the free ones. And then just remind people early and often there’s five more, at least up on the good.

[00:27:07] Jon MacDonald: com if you wanted to get more of those. 

[00:27:09] Ryan Garrow: Dang, SaaS can get complicated. And trying to get people to part with their money. E-comm seems simpler many times. 

[00:27:16] Jon MacDonald: I was going to say we all thought e-comm was difficult, but the SaaS world is, can go really deep. And so it’s part of why I love it. I 

[00:27:24] Ryan Garrow: imagine it’s likely difficult to move your Strategy around [00:27:30] from, free trial to, doing the reverse trial to doing the trial with payment.

[00:27:35] Ryan Garrow: Like it doesn’t feel like that’s going to be an easy thing to move around. So you probably have to be very intentional and test small early on. Before you go 

[00:27:44] Jon MacDonald: big, once you have the wins behind a solution, it can be hard to change that because all your marketing is going to be done on it. You’re the way you’ve built your product marketing and product management teams are all going to be geared up for those specific methods.

[00:27:58] Jon MacDonald: Without question, yeah, you [00:28:00] really want to make sure you have this settled in, and then you can tweak it from there, but you probably don’t want to change the entire methodology that often. 

[00:28:08] Ryan Garrow: Jon, I appreciate the education today. Now I’ve got to go re listen to this a few times, probably try to figure out how I can apply this to some of these things I’m thinking about in Ecom.

[00:28:18] Jon MacDonald: Yeah maybe that’d make a great episode sometime we can how to convert free. Free to pay trial and how that works for e-Comm as well. 

[00:28:25] Ryan Garrow: Yeah, I’m definitely gonna come up with some stuff to test and measure. For sure. Love it. So [00:28:30] thanks for the time. 

[00:28:30] Jon MacDonald: Alright, thank you Ryan.

[00:28:38] Announcer: Thanks for listening to Drive and Convert with Jon McDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at drive and convert com.

The post Drive and Convert (Ep. 116): How to Convert Free Trial Users to Paying Customers appeared first on The Good.

How do you understand if your features are supporting user exploration while leaving enough out of reach to incentivize conversion?  

Enter verb scoring.

A handy tool that evaluates and scores user actions based on permissions, verb scoring offers product teams an avenue to align on and improve their product monetization strategy.

The early payoff is to understand where the strategically placed friction is within a user experience. Then, once you are aligned on how your product’s features support your strategy, you can build a shared vision for the purpose of each feature.

Whether your goal is to gain share-of-voice, build a stable of free users, monetize existing ones, or connect with leads, verb scoring helps you build an intentional acquisition and monetization strategy.

In this article we will:

• Define verb scoring
• Review verb scores (with examples)
• Demonstrate how to use verb scoring to evaluate your and/or your competitor’s acquisition, retention, and monetization strategy

Note: This is part one in a two-part series on verb scoring. Stay tuned for the follow-up on how verb scoring can support your product strategy (with examples).

What is verb scoring?

Verb scoring is the act of evaluating actions that users can take in your and your competitors’ products and then scoring them based on the level user of entitlements (or the amount of friction) required to perform the action. 

What are the primary benefits of verb scoring?

A verb scoring exercise allows you to evaluate your strategy. Then, you can produce an artifact that communicates it in a visual, shareable, and succinct feature matrix.  

This at-a-glance accounting of your product features allows you to:

• Evaluate your acquisition, retention, and monetization strategy
• Compare your strategy to that of your competitors, and
• Build a smarter strategy that’s best suited to your unique product.

The output of your Verb Scoring Matrix might look something like this:

What do we mean when we say verb?

In the context of verb scoring, verbs are the core features of your product broken down into discrete actions. They are actions users can take within your product, such as creating a ticket, editing a transcript, or sharing a document with a friend.

While in other contexts it’s advisable to stay focused on the core benefits of your product, scoring a product via discrete verbs is helpful in this context. It mirrors the ways users might talk about a product’s limitations. For example, users might say, “I love that I can create a poster, but it won’t let me resize it.” In this example, create and resize are the verbs.

Using verbs, rather than benefits or features, is a user-centered way to evaluate your product’s functional limitations from the perspectives of users with varying entitlements.

What products could benefit from verb scoring?

Verb scoring is especially useful for any product in which acquiring paying customers relies on some combination of having both free and paid features. It’s also useful for products with teams deciding whether or not to gate parts of the digital experience.

What are the various verb scores?

There are six different verb scores that represent growing levels of “friction” required to utilize them. Each serves a different purpose in your strategy:

Let’s look at each verb score in more detail.

Anonymous

The verb score with the least amount of friction is scored as Anonymous.

Anonymous verbs are those in which a user can take an action completely for free, without giving away any information about themselves.

We call these verbs Anonymous because they don’t require any information (e.g., name or email address) to use them, so the user can remain “anonymous” and make use of the features.

Think of using an online PDF compression tool. If a user doesn’t need to give anything away to take the action and can do it an unlimited number of times, then the verb is scored as Anonymous.

Example: PandaDoc’s Online PDF compression tool allows users to compress a PDF document for free without requiring an email address.

Anonymous verbs are the most frictionless ways users can take an action within your product.

Limited Anonymous Use

We add just a small amount of friction in the next verb score: Limited Anonymous Use (LAU).

With LAU verbs, users can take an action without providing information, but we impose limitations on its use in some way (or at some point).

Example: Adobe does this with their online PDF converter on the user’s second use. The first time a user converts a file, he can do so without giving away any information.

However, try to use the free online PDF converter again, and the user is required to share an email address to download their converted document.

Example 2: Many online media publications use LAU verbs when it comes to giving away content. New York Times readers can read one article for free, but once they try to read a second article, they are asked to create a free account to enjoy more content. In this example, the verb “Read Articles” is scored as LAU because users can do it anonymously, but only a limited number of times.

LAU verbs might have limitations based on the number of uses, number of free uses per day, or other variables. Because the user is allowed to take the action anonymously, but there are eventually limitations on that use, we score verbs Limited Anonymous Use.

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Free with Registration

When verbs can be performed for free, but only after users have provided personal information (like an email address), they are coded as Free with Registration.

Example: Posting on X (formerly Twitter). Once a user has signed up for a free account, they can post, reply, and retweet without limitation.

To take advantage of Free with Registration verbs, the user must give some amount of personal information. This is typically only an email address and name.

Limited Registered Use

When verbs are free to users who have registered, but the capabilities of that verb are limited in some way, those verbs are scored as Limited Registered Use or LRU.

Many companies that have a large free user base rely heavily on LRU features.

Example: Canva gives away a lot of free functionality, but most of their “free” features have limitations. Free users can add text to images, but not the fanciest scripts. Free users can utilize some templates, but not all of them. 

If an action can be taken by a registered user, but the full capabilities of the feature are reserved for paying customers, that verb is scored as Limited Registered Use.

Trial with Payment (TwP)

While some actions can be taken by users who have provided little more than an email address, others are reserved only for customers who have provided a form of payment in exchange for extra functionality. We call these verbs Trial with Payment, or TwP.

TwP verbs are typically high-value actions that users are willing to pay for. In exchange for their use, we ask users to put down some form of payment. But, as the name Trial with Payment implies, users are not charged during a “trial” period. Instead, their card is held and charged only when the trial period ends.

Example: In Canva, users who want to export a design to an SVG must enter a trial period and provide payment information. As such, the verb “Export to SVG” is scored as TwP.

Gated

The word “Gated” is often used as a catch-all for features that have some level of friction. But in verb scoring, the meaning of Gated is specific and is reserved only for the most tightly guarded features.

In verb scoring, Gated features are those that users can’t leverage until they are paying customers.

Truly Gated verbs can’t be accessed by simply signing up for a free trial. They are behind a hard paywall, with up-front payment required to take advantage of them.

Example: Stripe, an online payment processing tool, opens up nearly all functional parts of its dashboard to registered users. Users can create products, draft invoices, create templates, and connect their bank accounts for direct deposits. But when it comes time to actually send an invoice to a client or get paid, those features are reserved for paying customers only. They will not be available via any form of a free trial.

When a feature is reserved solely for already-paying customers, we score that feature as Gated.

A framework for scoring verbs

To execute a verb scoring exercise, you can use the verb score decision tree. This tool helps you take what you just learned in this article and follow a logical process to score your and your competitors’ verbs.

You’ve scored your verbs. Now what?

Once you score your and your competitors’ verbs, you can plot the features/scores on a matrix to demonstrate shared understanding with your team in a crystal clear artifact.

The tool, called a Verb Scoring Matrix, is the starting point for competitive and strategic analysis specific to product monetization.

Plot the features in Verb Scoring Matrix to clearly compare your feature-gating strategy to that of your competitors.

Now, you can get off to the races on developing a strategy as you have a better understanding of how the user experiences friction across your product experience. Additionally, you’ll know how that experience compares to that of your competitors.

To be clear, we aren’t advocating for adding unnecessary friction to a user’s journey. What we are advocating for is having a shared understanding of how your product’s features either support or inhibit your strategy through this friction.

But understanding your features is just the beginning. The next step is to build a shared vision for the purpose of each feature you’ve scored. Then, adjust your strategy accordingly. The second part of this series on verb scoring is available here.

The post An Introduction to Verb Scoring: What It Is and How To Leverage It For Product Acquisition & Monetization appeared first on The Good.

A pricing page is where you onboard potential customers to learn about your different plans and pricing options and decide what fits their needs best.

However, you need a fully optimized page that effectively communicates your SaaS product’s value, or else they may leave it to a competitor with a clearer value prop.

Whether you’re a SaaS startup or a mature business looking to improve your pricing page conversion rates, we’ll provide you with valuable insights to help you maximize revenue.

What You Need to Include On Your SaaS Pricing Page

Your pricing page should encourage users to go from indecision to certainty. The best pricing pages have clear, customer-friendly language, simple layouts, and are free from any misleading marketing tactics.

At a minimum, pricing pages should include:

1. A value-driven headline: Highlights your SaaS’s unique value proposition, enticing potential customers to learn more.
2. Brand-consistent pricing tier names: Clearly labeled pricing tiers that align with your brand and reflect each plan’s different features and capabilities.
3. Transparent pricing ranges: Outlines each plan’s features, limitations, and pricing.
4. FAQs: Addresses common questions about your SaaS product and pricing, such as billing, cancellation policies, and refunds.

Additional options include:

5. Upselling the annual plan: Encouraging customers to sign up for an annual plan by offering a discount or additional benefits as well as making this the pricing tier default.
6. Freemium models: Offering a free plan with limited features to attract potential customers and provide a low-risk way to try out your product.
7. Testimonials: Showcasing client reviews helps establish trust and social proof.
8. Currency conversion: Providing pricing in multiple currencies for customers in different regions to improve accessibility and reduce confusion.

Clear pricing pages also save your Customer Success team time by addressing common inquiries and allowing them to focus on more complex issues.

Now that you understand the key elements of a conversion-focused SaaS pricing page, let’s examine examples of successful SaaS pricing pages.

13 Best SaaS Pricing Page Examples

#1 Clearscope: Clean and Simple

Clearscope, a content optimization tool, keeps it simple on its pricing page (in fact, they boast about this on the pricing page).

From the start, Clearscope simplifies the purchase process even with its basic pricing plan names (Essentials, Business, Enterprise), with a brief description of each so customers know which to choose for their use case.

The plan pricing is bold, with vibrant CTAs encouraging customers to click, and highlights key features of each plan so customers can easily compare them.

Below the plans, Clearscope offers a “Meet Our Customers” section for social proof and a comprehensive FAQs section to provide additional information for potential customers.

How This Page Increases Conversions

• Clearscope’s pricing page provides clear information on plan features and benefits
• Easy for customers to choose the right fit and reduce decision paralysis
• No minimum contracts or penalties add to the flexibility of Clearscope’s plans
• Ability to upgrade or downgrade plans
• Emphasis on customer success, including free training and priority support

#2 UserInput.io: Tailored to Use Cases

UserInput.io provides user research and feedback services to help businesses and individuals improve their products and user experiences.

UserInput takes a non-traditional approach to its pricing page. Instead of a typical pricing page, UserInput tailors each pricing page to the services it offers (Customer Feedback, User Testing, and Audits) so customers can easily find the service they want, read about it, and feel compelled to purchase the service.

This works because each use case offers different pricing and services, and if UserInput combined all the plans on a single pricing page, customers might need clarification and leave frustrated with too many options.

Within each page, UserInput bolds the price, includes subheadings with a brief service description, and outlines every included plan feature.

How This Page Increases Conversions

• A clear headline calling out the pain point
• A list of benefits for each feature
• Clear pricing information
• Customer testimonials
• Money-back guarantee to build trust with potential customers

#3 PandaDoc: Plan Transparent

PandaDoc, a document signing competitor to DocuSign, leads with the transparency model. This page isn’t just clear; it’s aesthetic with its forest green glow.

PandaDoc goes above and beyond, not only by offering extremely transparent pricing, features, and use cases for each plan but by adding a section comparing each plan’s more advanced features so customers know everything that’s included in any plan.

The layout is simple and clean, quickly guiding the user down the page.

How This Page Increases Conversions

• Clear and detailed information about the features and benefits of each pricing plan
• Toggler for annual plan and monthly plan so users can choose between the two
• Pricing plans with different levels of features and pricing, providing customers with options
• Customer testimonials
• Option to try PandaDoc for free to encourage potential customers to test the product and see its value before purchasing

#4 FreshBooks: Comprehensive Plan Options

FreshBooks, an accounting software, offers a features-rich pricing page. After reading its page, customers should know exactly what plan suits their needs.

First, it provides the essentials: plan name, use case, price per plan, how many billable clients per plan, and a large green CTA with an option underneath to try the plan for free.

FreshBooks presents each plan in its own column, clearly highlighting its features, pricing, and savings.

If users want more information, FreshBooks goes the extra mile by providing everything included in every plan, with a plan comparison chart below, helping customers understand the differences between the plans and choose the one that best fits their needs.

 How This Page Increases Conversions

• Clear and easy-to-understand pricing structure, with four basic plans that are designed for different customer types
• Offers a 50% discount for the first three months, which is a great incentive for customers to sign up
• The plan comparison chart helps customers easily compare the features of each plan side-by-side
• Offers add-ons that customers can choose to add to their plan for an additional fee
• Includes trust signals such as the 30-day money-back guarantee, SSL encryption, and customer support

#5 MailChimp: Organized and Efficient

Mailchimp, an email marketing platform, follows UserInput’s method of separating each pricing table by use case. However, MailChimp doesn’t use separate landing pages, but rather uses toggle options so users can select what they want.

Cleverly, Mailchimp includes an option where users can select how many contacts they have per month in a dropdown. This calculator provides correct price estimates for how much users will pay monthly for any plan.

Then, it lists comprehensive features available in each plan, including email sends, users, audiences, customer support, pre-built templates, and more. So if customers need or want a specific feature, it’s easy to find without inquiring with the customer service team.

 How This Page Increases Conversions

• A dropdown menu allows customers to select how many emails they need, which gives them the pricing immediately
• Mailchimp offers a 15% discount to nonprofits and charities, showing that the company is committed to supporting social causes
• Offers a free trial for its paid plans, allowing users to test out the features before committing to a plan
• No hidden fees or complicated pricing structures
• Social proof through its various award icons at the bottom of the page

#6 Frase.io: Clear and Flexible

Frase.io, another content optimization tool, and direct competitor to Clearscope, presents a straightforward pricing breakdown.

It’s a clean page, free of extra fluff that gets in the way of the user experience. For example, each plan’s name corresponds to its use case, Solo, Basic, and Team. So, if customers want Frase for their team, they know to select Team. Or, a freelancer can select the Solo plan.

Frase also outlines what’s included in every plan using brand-consistent icons and briefly defines each feature.

 How This Page Increases Conversions

• Offers multiple pricing plans that cater to different types of users
• Offers a free 5-day trial for only $1, which allows visitors to test out the product without committing to a long-term subscription
• Presents clear and concise information about each pricing plan and the pricing options available, including annual options
• Includes a “Pro Add-On” section, which offers additional premium plan features for an additional $35/month and is presented as an easy way for users to upgrade to a more comprehensive plan with additional benefits
• Includes a section outlining the benefits of using Frase, including the AI writer and automated content briefs, which are included in every plan
• Offers a “Got a Question?” section, which allows visitors to ask questions about the product and clarify any doubts they may have before committing to a plan

#7 Semrush: Feature-Focused

Semrush, a search engine optimization tool, has a pretty straightforward pricing page.

One intriguing feature is the “Pay annually” toggle on the top left, encouraging users to save 17% by highlighting it in orange.

Customers who want a more thorough breakdown of each plan’s key features can scroll to see what is included in each.

Semrush adds social proof by providing a carousel of testimonials at the bottom from industry leaders at top-rate companies like Wix.

How This Page Increases Conversions

• Clearly outlines the different plans available, the key features included in each plan, and the pricing for each plan
• Includes testimonials from satisfied customers, which can help build trust and credibility with potential customers
• Offers a 7-day money-back guarantee, which can help alleviate concerns and encourage potential customers to try the service
• Offers a range of plans to suit different needs and budgets, including the ability to add additional users or create a custom plan.

#8 Slack: Benefit-Packed Features

Slack, a communication and collaboration platform, leads with a strong value prop “make teamwork more productive.”

Instead of a list of technical features, each plan offers a benefit. For example, “Timely info and actions in one place with unlimited integrations,” “Compliance requirements met with data exports for all messages,” tie features into how they help customers solve common problems.

Further down on the page, Slack has a detailed comparison chart, followed by an option for government officials called GovSlack that complies the U.S. government.

Right below that, Slack has a small callout highlighting their enterprise security efforts, showcasing their commitment to ensuring customer security.

How This Page Increases Conversions

• Clearly lists the different pricing tiers and what features are included in each tier
• Feature comparison chart that allows users to compare the different pricing tiers side by side
• Prominent call to action buttons for each pricing tier, making it easy for users to sign up for the plan they want
• Highlights Slack’s enterprise-grade security and compliance features, which can help reassure potential customers concerned about security and data privacy
• Includes information about GovSlack, a version of Slack explicitly designed for government agencies and their external partners

#9 Airtable: Intuitive Design

Airtable, a low-code platform for creating and sharing relational databases, offers a hierarchical design that encourages users to upgrade to the “Most popular” pro plan found in the blue color.

Assigning different colors to the different plan tiers also helps draw the eye to the brighter colors. It tricks a prospect’s brain into ignoring the free plan as the white background blends in with the site’s background.

It also shows logos of big-name clients that use its services: Expedia, Medium, Levis, Time, and Buzzfeed. How’s that for social proof?

Then, it follows the traditional pricing page format with a detailed comparison chart and frequently asked questions.

How This Page Increases Conversions

• Clear and organized list of features and pricing plans for different types of users
• Highlights most popular plan and offers a free trial
• Provides detailed information about features, benefits, and support for each plan
• Comparison table and list of frequently asked questions to help customers make an informed decision
• Includes customer testimonials and mentions the number of companies that use Airtable to build trust and credibility
• Designed to make it easy for customers to understand the product and pricing plans
• Visually appealing and easy to navigate, with brightly colored CTAs draw the eye to the most expensive plan
• Encourages customers to sign up for paid subscription plans

#10 Figma: Use Case Toggler

Figma, a prototyping tool for designers and developers, organizes its pricing page by using a use case toggles: Figma for design + prototyping and FigJam for whiteboarding.

Otherwise, it’s a classic example of a successful pricing page with simple plan names, different billing cycles, clear call-to-action buttons, and an upgrade to Enterprise below.

Similar to the Airtable pricing page, the CTAs for the paid plans are brightly colored compared to the plain white free plan, encouraging the eye to go for the most expensive plan.

How This Page Increases Conversions

• Highlights the most popular plan and offers a free trial for customers to test the product before committing to a paid plan
• Provides detailed information about the features and benefits of each plan, including the number of users, files, collaborators, and integrations, as well as the level of support and services provided
• Offers a comparison table of the different plans and a breakdown of associated costs, making it easy for customers to compare and choose the best plan for their team
• Includes a list of frequently asked questions to help customers make an informed decision and provides dedicated onboarding planning and support for Enterprise-level service customers
• Mentions discounts for schools, classrooms, and non-profit organizations, which may incentivize these groups to try Figma

#11 Miro: Leading with Social Proof

Miro, a visual collaboration platform, starts its detailed pricing page off with social proof by saying it’s trusted by 99% of Fortune 100 companies, further backing it up with the logos.

Once again, it draws the eye to the more expensive Business plan by outlining it in bright blue and changing the CTA button color to blue.

Each plan’s features are clearly called out in the pricing plan boxes, but those who want more detailed information can scroll down to compare plans.

Similar to the Slack example, for security-conscious individuals (who isn’t these days?) Miro highlights its security and compliance by displaying security certifications like SOC 2 Type II and ISO/IEC Security.

How This Page Increases Conversions

• Highlighting that Miro is trusted by 99% of the Fortune 100
• Offering a free plan that allows users to try Miro before committing to a paid plan
• Showing the benefits of upgrading to a paid plan, such as unlocking more features and increased security
• Offering different payment options, including monthly and annual subscriptions, to provide flexibility for users
• Providing education support for staff and students of educational institutions
• Displaying security certifications
• Including an FAQ section

#12 Coda.io: Customizable Billing Calculator

Coda.io, a collaborative productivity tool, offers a billing calculator to prospects when they first land on the pricing page.

They can choose between team size, number of Doc Makers on the team, and the plan they’re most interested in. This gives people an idea of the plan’s cost before scrolling down to the actual pricing plan chart below.

The calculator feature also may save their sales team from answering pricing questions so they can spend their energy on more important tasks like winning customers back.

After the calculator, this page follows the standard plan layout with pricing boxes, then a comparison chart, and an FAQs section below.

How This Page Increases Conversions

• The tiered pricing model allows customers to only pay for the features they need
• Coda uses the concept of “Doc Makers” to differentiate between users who create documents and those who collaborate and edit them
• Coda offers a “Free” pricing plan to encourage users to try out the product
• Coda provides detailed information on Packs included in each pricing tier, which are pre-built integrations with third-party tools

#13 ChargeBee: Currency Toggler

ChargeBee, a recurring billing software, presents pricing options in an elegant and uniform design through toggle switches.

Visitors can choose their billing cycle (annual, monthly) and their country’s currency. This is especially important for SaaS companies with many global clients because they can see plan pricing without using a currency calculator.

Below the pricing chart, ChargeBee specifically tailors a section to its target audience (early-stage startups) and encourages them to explore the additional benefits they offer by placing a callout below the pricing chart.

Then, they continue to target common customer pain points like churn reduction, failed payments, and time management, further convincing users why they should use ChargeBee.

How This Page Increases Conversions

• Offers a variety of pricing plans that cater to different business needs and sizes
• The pricing page provides clear and transparent pricing information
• Visitors can toggle between different billing cycles and currencies, which enhances their user experience
• Calls out to early-stage startups, encouraging them to learn more about what they offer specifically for this audience.

Create Your Conversion-Focused SaaS Pricing Page

Hopefully, these 13 SaaS pricing pages inspire you to plan out your own creative page to package your product.

Your pricing page should provide clear, customer-friendly language and a simple pricing layout free of misleading marketing tactics.

The essential pricing page design components:

• a value-driven headline
• brand-consistent pricing tier names
• transparent price tiers
• an FAQs section

Additional options include upselling annual plans, offering freemium plan options, showcasing testimonials, product demonstration videos, and providing pricing in multiple currencies.

Take inspiration from these examples, but always consider your own unique value proposition, target market, and business model.

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The post 13 Examples of Effective SaaS Pricing Pages That Drive Conversions appeared first on The Good.