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Saas Conversion Rate


When it comes to the SaaS world, the conversion rate can mean various things. The most basic fundamental definition of what is SaaS conversion rate would be:

  • Conversion rate is a percentage of paid customers who became that after a free (trial) period

It doesn’t matter how many users you have if there is no guarantee you will ever make a profit out of it. You have to impress them during their free trial period. If you do that, once the trial period is over, they will absolutely want to continue using your product.

SaaS free trials

Therefore, the proper implementation of the free trial is crucial for the financial stability of the SaaS company. Successful conversion rate optimization in the SaaS onboarding process can build your entire business on healthy foundations. Nature of your product, core audience, your goals- all of these factors determine which model of the free trial you will use in an attempt to increase the conversion rate.

The most common free trial model is one in which, during the sign-up process, the company requires the user to fill in the data related to the credit card. This means that the user can use the service for a certain period of time free of charge, and after that period (which is usually around 15 to 30 days) he will have to start paying if he wants to continue using it. It is of paramount importance to mention during the sign-up process that they are able to cancel the subscription whenever they want. Additionally, you need to make sure that customer experience in SaaS is a positive one so that your chances of converting them is higher. Once again, this request for a credit card may turn down potential customers. But, it has the most potential to boost your SaaS conversion rate.

The other two types of free trials are more aimed at increasing the number of free users than the number of those who pay. This is especially the case when we speak about freemium. Freemium is the example where the customer can use the services for free for an unlimited period of time. The only difference between free and paid customers is that the latter has a much wider range of options. For example, let’s say you sell applications using freemium as a type of free trial. In that case, anyone who downloads the application can use it, but only those who pay for it can use the advanced and more sophisticated features on it.

Freemium requires initial investment and patience when attracting customers and trying to convert them to one of the SaaS subscription models.

  • Freemium can bring you the most customers while free trial (where you request in sign-up process credit card information) can convert most of them to subscribe customers

Good Conversion rate

Any conversion rate that is above 8% is a solid one. The average conversion rate for SaaS businesses is between 5-8%. But there is no general rule omnipresent across all sectors of the SaaS world. However, you should shift your focus more to the question- What is a good SaaS conversion rate for you. Every business is unique in its own way and the same applies to conversion rate. So make sure to not waste your time by looking at how others are doing, instead focus on your efforts so that you can achieve defined business goals.