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Ask HN: Strategies on Converting Free Users to Paid Users?

1 pointspelcg3y ago5 comments

Hey HN!

A few months ago I launched a SaaS for Discord groups which has a newsletter as well. There is a basic plan and a paid plan for those who want to supercharge their discord community (think advanced access control, management, community perks, AI based help, etc.)

Since shipping, I see around 87% of customers (out of around 20,000+) are using the service for free and only about a small percentage ~12-13% are paying.

Is this normal when having a SaaS that there are a huge amount of free people? I'm glad free people see some value in my service, but the only worry for me is the server costs as this scales up.

What do you guys do in this situation for converting free customers into paying customers?

Thank you!

5 comments

5 comments · 3 top-level

mcny3y ago· 2 in thread

> Since shipping, I see around 87% of customers (out of around 20,000+) are using the service for free and only about a small percentage ~12-13% are paying.

Congratulations on shipping!

Are new people mostly "free people" or do you continue to have a good mix of over 10% paid users? Is your free tier too generous? Is it too difficult to pay? As a "free people", I would love it if you priced your free tier in a sustainable way.

pelcgOP3y ago

They are mostly free users using the service, we do restrict our tier a lot and the price to upgrade is around $10/mo, we use Stripe Checkout to process the payments.

> I would love it if you priced your free tier in a sustainable way.

I would love to know more what you mean by this.

mcny3y ago

I recently started using a free postgresql database service provider and within a few months they folded and got acquired/hired by some bigger company and sunset the entire product with a short notice (it was on the front page of HN). Meanwhile, elephantsql continues to serve me, even though the free tier only allows tiny 20MB databases so I can play with postgresql easily. Not that I do it everyday or even every week but it is there when I need it.

I mean you should limit the free users to a point where you aren’t worried about the whole thing collapsing under the weight of free users.

[random advice from the internet]

My intuition is that trying to find new paying users will be a better use of your time than trying to convert free tier users to paid.

And it is probably better to extend an existing service in ways that allow paying customers to pay you more money and that attract new paying customers to the solution.

At best, a free tier provides an organic path from uncertainty about the service to deciding it is worth paying money for the service to solve whatever problem it solves.

In the average case, a lot of free tier use is driven by the psychology of it's-free, and people will quit before they convert even when it is a bit disadvantageous.

Good luck.

Congrats on the launch! Still early in my process but I found this YC Startup School video useful relative to your question. [0]:https://youtu.be/oWZbWzAyHAE

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