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Freemium vs. Free Trial: Which Model Drives More Conversions?
Filippo Ferri
February 09, 2025
đź‘‹ Welcome to Momentum Inspired!
If you’re building a Product-Led Growth (PLG) business, choosing the right pricing model can make or break your revenue strategy.
Should you offer a freemium plan or a free trial?
âś… Freemium attracts more users but can lead to low conversion rates.
âś… Free trials create urgency but require strong onboarding to convert users quickly.
So, which one drives more conversions—and when should you use each?
Let’s break it down! 🚀
🔍 The Key Differences: Freemium vs. Free Trial
Feature | Freemium | Free Trial |
|---|---|---|
User Commitment | Low—users can stay free indefinitely. | Higher—users know access is limited. |
Adoption Speed | Faster—low friction to try the product. | Slower—users feel urgency to test everything before the trial ends. |
Conversion Focus | Upgrade when they need premium features. | Upgrade before the trial expires. |
Best For | Products with viral growth loops (e.g., Notion, Slack). | High-value SaaS tools requiring immediate onboarding (e.g., HubSpot, Salesforce). |
🚀 Your takeaway:
If your product has network effects & high engagement, freemium can drive organic adoption.
A free trial may work better if your product requires setup to show value.
đź’° The Pros & Cons of Each Model
Freemium: When It Works Best
đź’ˇ Best for: Products with low-cost onboarding & built-in virality (e.g., Slack, Canva).
🔹 Pros:
âś” Attracts millions of users quickly.
âś” Encourages long-term engagement before monetization.
âś” Works well if premium features create natural upgrade triggers.
đź”» Cons:
❌ Low conversion rates—many users never pay.
❌ Can lead to high server & support costs for free users.
đź“Ś Example:
- Slack’s free plan limits search history & integrations—driving teams to upgrade.
- Notion’s free plan allows individuals unlimited notes but requires payment for team collaboration.
âś… Your Move:
- Limit free plans with clear upgrade triggers (e.g., storage, usage, team size).
- Focus on viral features that bring in more users.
Free Trial: When It Works Best
đź’ˇ Best for: High-value B2B SaaS products requiring onboarding & activation (e.g., HubSpot, Figma).
🔹 Pros:
âś” Encourages higher conversion rates by creating urgency.
âś” Works well for enterprise customers evaluating ROI.
âś” Helps users experience full product value before paying.
đź”» Cons:
❌ If users don’t activate quickly, they churn.
❌ Requires strong onboarding to show value fast.
đź“Ś Example:
- Figma’s free trial lets teams collaborate, but requires payment for unlimited files.
- Calendly’s trial lets users test premium scheduling automation before locking features.
âś… Your Move:
- Shorten trials to 7-14 days to create urgency.
- Use in-app nudges & email sequences to drive conversions.
🚀 Case Study: How Zoom Scaled With Freemium & Free Trials
Zoom started with freemium to drive viral adoption but added free trials for enterprise sales.
🔹 Freemium Growth:
✅ 40-minute limit for free meetings → Encouraged team adoption.
✅ Viral invites → Users introduced colleagues, fueling network effects.
🔹 Enterprise Free Trial:
✅ Large companies needed more than 40-minute meetings → They upgraded fast.
âś… Sales team engaged free trial users to close bigger deals.
🎯 The Result? Zoom scaled to $4B+ ARR using both models strategically.
🚀 Your Takeaway: You can combine freemium for viral growth & free trials for enterprise conversions.
đź’ˇ Quick Wins to Improve Your Pricing Model Today
âś… If using freemium: Define a clear upgrade trigger (e.g., storage, team size, premium features).
âś… If using free trials: Optimize onboarding to show value within the first session.
âś… Test hybrid models: Use freemium for SMBs & free trials for high-ticket customers.
📣 Let’s Talk!
Which model has worked best for your business? Reply to this email—I’d love to feature your insights in a future issue!
Until next time,
Filippo
P.S. Know someone rethinking their pricing strategy? Share this issue with them! 🚀
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