It’s tempting to jump straight to tactics when it comes to freemium. There’s so much more you can do than just a hard paywall: engagement moments, upgrade triggers based on usage, contextual nudges… I’m getting excited just writing about it!
But what deserves more attention is working out what to offer free vs. paid. There’s a lot of generic advice out there:
- “Give them a taste of premium”
- “Provide value”
- “Balance value and pushing upgrade”
None of which answers the tricky question: what do you offer in your free versus premium tiers? How did freemium giants like Duolingo, Slack, and Strava figure out what belongs in each?
That’s what I want to cover here. I promise to stay strategic rather than tactical, but practical enough that you and your team can actually use this to decide what belongs in each tier. Follow this step-by-step process, and you’ll end up with a clear, defensible freemium strategy.
What does the data say about free vs. paid?
Before we begin, a quick note: the numbers can make freemium look like the underdog: hard paywall products have median conversion rates of about 10.7%, compared to 2.1% for freemium models, and can generate roughly 8× more revenue per install after 14 days. While it’s true that hard paywalls can be huge performers, it’s not the rule. And that’s only the median story.
The strongest freemium products — think of companies like Duolingo, Slack, and Strava — show how wide the performance spread can be. Top freemium apps can achieve retention rates between 42.4% and 58.1%, far outperforming average outcomes.
In other words, freemium rewards exceptional execution: the difference between a mediocre strategy and a great one is enormous, and getting the tier design right is what determines whether you land in that top bracket.
So, let’s jump into six steps to creating a freemium strategy that actually drives upgrades.
Step 0: is freemium even right for you?
I’d be doing you a disservice if I skipped this step, but if you’ve already thought this through, no offence taken at all — jump straight to Step 1.
Still with me? Let’s cover the considerations when deciding if freemium is right for your app.
Understanding audience size in free vs. paid
The first consideration is audience size. If you’re building a product you want to scale broadly, freemium is usually the default choice. The word-of-mouth potential and advantage of a large top-of-funnel reach often outweigh the downside of a lower conversion rate. On the other hand, if your product serves a very niche audience, you may want to save yourself some time and go straight to a hard paywall model (possibly paired with a trial).
If you compare day 35 downloads to paid for freemium vs. hard paywall, the averages differ greatly:
That means that, in a freemium model, you typically want at least ~1,000+ free users to build a meaningful paid cohort. Based on these ranges, if you have around 5,000 users, freemium might yield roughly 110–225 paying customers, whereas a hard paywall could convert closer to 325–1,085.
If you’re unsure whether your audience is large enough to support a freemium strategy, it’s worth estimating your Serviceable Addressable Market (SAM) to see whether you can realistically reach the scale needed for freemium to work.
Unless you have a very good reason why people would convert at a higher-than-average rate — Slack converts at over 30% because of its business case and strong freemium strategy — the math needs to work for lower conversion rates.
Revenue delay within freemium apps
Freemium apps tend to lean toward more habit-forming, viral products. That virality comes at a cost: there is a delay in revenue. Hard paywall users mostly convert on Day 0, while a larger share of freemium users convert weeks after download, meaning you need the runway to wait:
Willingness to pay and pricing confidence
It’s harder for newer apps to understand willingness to pay with a freemium model because you need a bigger audience to learn from. Is it not converting because people won’t pay — or is it converting less because of freemium? For new apps, it could be worth temporarily starting with a hard paywall to learn, then switching to freemium once you understand your price sensitivity better. Alternatively, if you expect word-of-mouth to be your primary growth driver or you’re in a crowded market, you can take the Headspace approach: start with a very generous free tier and then, over time, move more behind the paywall.
Don’t let freemium make you timid on pricing
There’s no published data directly showing that freemium apps charge less than hard paywall apps, but in my experience, the tendency is there — and it’s a trap. RevenueCat’s data shows that higher price points actually drive better Day 35 conversion rates (2.8% median vs. 1.4% for low-priced apps) and higher revenue per install.
The logic is counterintuitive but sound: if someone has experienced genuine value in your free tier and still chooses to upgrade, they’re a high-intent buyer. Price accordingly. Your generous free tier should give you confidence to charge more, not less.
Action time
Fill in the following template:
We'll start with [Freemium / Hard paywall] because [reasoning].
Step 1: what is your goal with freemium?
You’ve decided freemium is right for you. Now the question is what you want that free tier to do for your business.
Your goal shapes everything that follows: how generous your free tier is, where you draw the paywall line, and how aggressively you push for upgrades. People often think freemium’s main benefit is purely for word-of-mouth or volume, but freemium can serve many goals.
1. Stand out in a competitive market
Healthi, a weight-loss app, intentionally went freemium because its major competitors — Weight Watchers and Noom — didn’t offer a free version. This helped them gain traction and stand out in a crowded market.
When standing out from the competition is your goal, you’ll typically want a generous free version to begin with. You’re using free as a wedge against incumbents. Over time, as you establish your position, you can tighten the free tier and charge more — similar to what Headspace did and what we see with several larger AI apps.
2. Drive organic growth through word-of-mouth
People are much more likely to recommend a free app than a paid one, and many freemium apps benefit from running fewer ads as a result. Duolingo’s former VP of Product, Cem Kansu, put it bluntly on the Sub Club podcast: at Duolingo, free users were never treated as freeloaders. They were the primary distribution channel. Around 80% of new users arrive organically, powered by viral loops, shareable progress, and the app’s built-in motivation systems.
When this is your goal, you need to think carefully about how to ensure free users get enough value to recommend you, and whether you can build viral loops into your freemium model. If free users don’t love the product, there’s nothing to spread.
3. Help build a habit
Some apps naturally take longer to build value or to understand. In these cases, freemium can give you time to convert users who a trial (rarely longer than 30 days) simply can’t.
When this is your goal, think about the actions needed to get the user far enough along to pay. For example, Fitbod, a fitness app, offers three workouts completely free before you need to pay. After three workouts, you’re starting to get into the habit of using the app and seeing the value. The free tier isn’t about generosity, it’s about giving users enough runway to form the habit.
4. You need volume for your app to work
Some apps need scale for their core product to function, whether that’s data, community, or network effects.
For example, I worked with an IBS app that was just starting out. Their main feature of value was a powerful scanning tool that helps you understand what you can and can’t eat based on what triggers your gut health issues. They were intentionally very generous with the scanning tool — more generous than they needed to be — because every new market they entered, they needed a lot of data on what foods to include, and this was cheaper and easier to source through user data than external data sources. For one new market they were testing, they went so far as to omit a paywall entirely because their data outweighed short-term revenue.
If their goal had been just word-of-mouth, they could have offered less, which is exactly what they did in their main market, where they already had enough data. They still grew substantially organically, resulting in YoY revenue up 70%–80% and paid conversions rising from 6.6% to 13.7% (well above average for freemium).
Strava is another example: free users recording activities generate the route data, segment data, and social activity that make premium features like heatmaps, leaderboards, and route suggestions valuable. The more people tracking for free, the better the paid product becomes making it worthwhile having a generous free tier.
5. Have a positive impact on the world
The final reason is a tricky one. I’ve worked with an app that genuinely grew out of a desire to help people (one of the best parts about specialising in wellness apps). They had a very generous free tier: you could use the main features without ever paying. But people weren’t activating as much as premium users — we’re talking 1%-2% active for freemium vs. 60% for premium.
With free user activation being extremely low, they weren’t actually achieving their impact goal. You need to find ways to stay true to this mission while actually delivering value. For example, when Headspace removed its freemium content, it still offered free meditations on YouTube to stay true to its goal of having a positive impact, just through a different channel.
So start by defining your main goals to ensure you design your model the right way. Depending on your goal, you may intentionally choose to be more or less generous.
Action time
Fill in the following template:
Our main goal(s) with freemium are [goal(s)] because [reasoning]. This will have the following [impact] on how we shape our model.
Step 2: define what user success looks like
Your users have a job they’re trying to achieve with your app, and when they achieve it, they retain. If you have the data, look at what it shows for paying users; if you don’t, define the actions that will predict success.
I like how Alice Muir Kocourková explains it:
“Free users should be able to achieve meaningful progress toward their goal — but not reach the full solution.”
So you need to know not only your goal, but theirs too. That then allows you to work backwards to what actions get them to that point.
Action time
Fill in the following template:
For [specific audience] who [job to be done / problem they're trying to solve], our app [how it addresses the pain / painkiller focus] by [your unique way of delivering value].
Step 3: choose your freemium architecture
Based on the above, you can now think through how to shape your freemium setup. Not all freemium models are built the same way. Some apps offer very different features for free vs. premium users, while others offer a taster of premium features. Before you map individual features to free and paid, you need to decide how the free tier relates to the paid tier. There are three broad approaches, each suited to a different type of product.
1. The taster model: same product, with limits
Here, users get the full product experience up to a certain limit. The free version doesn’t feel stripped down, it feels complete enough to use and get real value. The upgrade trigger comes from usage growth, not from missing features.
Loom, the video-sharing platform, is a great example. I used it for free for a good year, maxing out at 5-minute recordings and saving up to 25 videos. I didn’t use it often, so I’d occasionally delete older videos to make room. Over time, I started seeing the value, and I reached a point where five minutes felt frustrating, and sending four separate videos to a client did not exactly scream professional. I switched to paid and have been a loyal customer for years.
Other examples include Zoom (free users get the same tools but hit a 40-minute limit) and Notion (same editor and workspace, but with block limits and limited guest invitations).
When this works well:
- Usage impacts value: saving more videos, longer recordings, more storage are genuinely more valuable as you use the product more.
- Your core value is what drives word-of-mouth, so you want or need free users to experience the real thing.
- There’s a natural inflection point where casual usage becomes serious usage. Think of it as the ‘defining the relationship’ moment — you don’t want an app situationship.
For this to work, you need to identify, or create, that natural inflection point where casual clearly becomes serious. Set limits too high and users never hit them; set them too low and the free tier feels like a trial with extra steps.
2. The split model: different features for different jobs
Here, free and paid users get distinctly different capabilities. Premium isn’t ‘more of the same’ — it’s a different set of tools serving a different (usually more advanced or professional) use case.
For example, CapCut, the video editing app, offers basic video editing features for free, but as I edited my video and wanted fancier subtitles and better editing tools, it was indicated that these were premium features. I could edit without them, but for a business use case where I wanted a more polished result, paid made sense.
Surfline, a surfing app, works the same way. Casual once-a-year surfers only need a basic forecast, and the free app handles that well. Serious surf fanatics want extended forecasts, wave timeline features, and detailed swell data.
As a casual surfer myself, I just want to know whether I can surf (and hope I can stand up). I have no clue what the wavelengths and frequencies mean. But as those casual users start to fall in love with surfing (or move closer to a beach), they may become paid users at a later stage.
When this works well:
- You serve distinct user segments with different needs (casual vs. power user, personal vs. professional, individual vs. team)
- Paid features have meaningfully higher value, or higher cost to serve, that justifies a separate tier
- Free features are strong enough to stand alone — they’re not just a teaser for what’s behind the paywall
The risk: If the split feels artificial, e.g. if users constantly bump into locked features during their normal workflow, it creates frustration. So the locked features should feel like a different destination, rather than a roadblock on the same path.
3. The hybrid model: taster limits + split features
Many of the best freemium apps combine both approaches: some features are available to everyone with usage limits, while others are exclusively premium. This gives you two distinct upgrade triggers: “I need more of what I already use” and “I want access to something new”.
Slack offers you a taster, or well, practically a full free meal. You get the full workspace experience, but message history is limited to 90 days, and you’re capped on integrations. Yet features like Slack Connect (cross-organisation channels) are fully premium, because they’re classic business features that signal a team should be able to pay. Casual teams never need them; business teams can’t live without them.
ChatGPT works similarly too: free users get access to capable models with usage limits (taster), while advanced models, deeper reasoning tools, and higher-volume image generation are premium-only (split).
And Duolingo also does the same: free users get all lessons (the core product) with ads and limited ‘hearts’ (taster), while unlimited practice, progress quizzes, and offline access are premium-only (split).
When this works well:
- You have both a broad casual audience and a smaller power-user segment.
- Some features scale with usage (good for limits) while others are binary; you either need them or you don’t.
- You want multiple upgrade triggers at different points in the user journey.
Which approach is right for you?
If you aren’t sure, these questions can help:
- Does your product’s value increase with usage volume? (More messages, more storage, more recordings.) Lean toward the taster model. Set limits where casual use flips into serious use.
- Does your product serve clearly different user types? (Hobby vs. professional, individual vs. team, consumer vs. business.) Lean toward the split model. Gate features by segment, rather than usage.
- Is your user base very broad, with a wide spectrum of needs? Lean toward the hybrid model. Use taster limits for the core experience and split features for power tools.
Don’t feel like you need to set and forget; this may be something you test and evolve as you learn. Your architecture can change over time, it’s much easier to tighten a generous free tier than to loosen a restrictive one.
Action time
Fill in the following template (I promise you it's worth thinking these through — consider it app journaling! Great for the soul, and for app growth.)
We will go with [model type] to begin with because [reasoning].
Step 4: map your free vs. paid offering
Now, this is likely to be something you will optimize and experiment with vs. set-and-forget, but you need to start somewhere. Based on the above, if you’ve worked that out already, this step should feel quite natural.
Now, this is likely to be something you’ll optimize and experiment with rather than set and forget, but you need to start somewhere. If you’ve worked through Steps 1–3, this step should feel quite natural.
For each feature, map out whether it’s free, paid, or limited — and critically, write down the strategic rationale for why. This forces you to articulate the reasoning, which makes it much easier to revisit later and to align your team. For example, here’s how some of Strava’s features map out:
| Feature | Free | Paid (Summit) | Strategic rationale |
| GPS activity recording | ✓ Full access | ✓ | The product is about tracking. Gating it kills the network. Every recorded activity = content for the social feed. |
| Activity upload from devices | ✓ Garmin, Apple, Wahoo etc. | ✓ | Device integrations expand the top-of-funnel. Every synced watch is a distribution channel. |
| Segment leaderboards | Limited (personal only) | ✓ Full leaderboards | This is the upgrade hook. Competitive athletes need to see where they rank so this is a natural “aha moment” trigger. |
| Power analysis (cycling) | ✗ | ✓ | Niche but extremely high willingness-to-pay. Cyclists already spend thousands on gear. |
| Clubs & group challenges | ✓ | ✓ | Clubs are viral loops: each club invite is organic acquisition. Free access maximises reach. |
A few additional considerations as you map this out:
1. Keep AI costs in mind
If your app uses AI features, some things you’d like to offer for free may simply be too expensive to give away. This is reshaping freemium for AI-first apps: rather than gating features, many are adopting usage-based models where free users get a set number of credits or queries.
ChatGPT, for example, doesn’t lock features so much as it limits how much of the best model you can use before you need to upgrade. When mapping your features, note the cost to serve alongside the strategic rationale — it may override your preference.
2. Consider platform-specific differences
Your strategy may need to differ for iOS and Android, based on the differences in how those user groups monetise. Lose It! has a platform-specific paywall strategy: the same feature (barcode scanner) is free-with-ads on Android, but paid on iOS. Some apps also lean more heavily on ads for Android because there’s a lower likelihood of paying. This breaks the “sacred rule” of platform parity, but Lose It! led with data and adjusted based on what actually worked per platform.
3. Having your Bill of Rights in place
This might be the most important part of this step. As you map features to free and paid, you also need to define what you’re not willing to move.
Here’s the problem: it’s very easy to slowly shift more and more of your offering to premium, one experiment at a time, until the free tier offers little value. Each individual experiment might show a lift in conversion rate. But over time, the cumulative effect of reducing free value — on word-of-mouth, on user experience, on brand love — is almost impossible to measure until it’s too late.
Chris Hulls, Founder and CEO of Life360 (the family safety platform used by over 80 million active users), talked about exactly this on the Sub Club podcast. Life360 recently wrote a ‘Bill of Rights’ for their free users, an internal document that acts as a constitution for what cannot be touched. Whilst their Bill of Rights isn’t publicly available, to give you an idea of what it includes, Chris did share:
“This is probably the most important: the core map, location history, and place alerts, they must be free. Doesn’t mean we can’t move the paywall a bit, but real value there, no deceptive tactics… The real anchor is all around the lifeblood to who we are.”
Jacob Eiting, RevenueCat’s CEO, nailed why this matters in that Sub Club podcast: nobody runs a holdout group long enough to see the cumulative effect of chipping away at the free tier. You can A/B test removing any single feature, and retention looks fine. Do it 20 times, and you’ve quietly eroded the thing that made people love you.
I love the concept of the Bill of Rights and recommend taking notes on your own. This is likely a longer-term project, and if you are larger already, an internal discussion, but worth thinking through the following questions:
- What must always be free, no matter what? These are the features that are the product. If you gated them, you’d kill the thing that keeps people coming back. (Life360: core map + location sharing + place alerts. Duolingo: daily lessons. Strava: GPS tracking and the social feed.)
- What is the core value that free users receive, and is it real value, not a teaser? Chris’s test is simple: real value forever for free, period, rather than some crippled demo or a countdown to a paywall. A genuinely useful product someone could use indefinitely without paying.
- What can we experiment with, and what’s off-limits for testing? Some things you A/B test aggressively (paywall copy, timing, pricing) and some things you never touch because they are core to the free experience.
- What would make a free user feel cheated if we moved it behind the paywall? This surfaces the emotional contract, not just the functional one. Users might not churn immediately, but they’ll stop recommending you.
- What dark patterns or ‘growth hacks’ are we explicitly ruling out? Life360 included this in their Bill of Rights: no deceptive tactics, no ads that interrupt the Job to be Done, no springing changes on users without notice. Writing down what you won’t do is as important as what you will.
Step 5: work out if a trial is needed
Sometimes newer freemium apps default to offering a free trial, thinking they need to. It’s well-intentioned, but definitely not a requirement. Rather, trials should be strategic: offering them when users need to experience premium features to understand their value, or only to highly engaged users or win-back users.
A few considerations:
1. Do users need to experience premium to understand it?
If your premium features are the kind of thing people need to try (like advanced analytics or personalized coaching), a trial makes sense. If the free-to-paid gap is self-evident from the free tier, e.g. “I can see the leaderboard exists but I can’t use it”, a trial may be unnecessary.
2. Consider reverse trials
Rather than a traditional free trial that ends and asks users to pay or leave, a reverse trial gives new users premium access for a limited time, then drops them to the free tier. This is increasingly popular in freemium apps because users experience the gap between paid and free from the perspective of losing something (loss aversion), which is a stronger motivator than never having had it.
It’s distinct from a traditional trial because the user lands on freemium rather than churning entirely.
3. Don’t go too long
In general, avoid overly long trials to prevent further delay of monetization. Daily-use apps can get away with a 3-day trial, while weekly-use apps may need 7 days. Match trial length to your app’s usage cadence so users have enough time to experience value but not so much that the urgency to decide disappears.
Action time
Fill in the following template:
We [will/won’t] offer a free trial because [reasoning].
Step 6: start working on how you communicate and push for upgrade
Only once you’ve designed a strong setup can you jump to the part I got all excited about at the beginning: the tactics. It’s not to underestimate them; they just work 10x better once you’ve designed the foundations well. Alice Muir Kocourková shares some great pointers on how to do this in her article How to turn freemium users into loyal subscribers. I’d recommend prioritizing the following areas first:
1. Communicating freemium value
Not getting caught up on listing everything, but zooming in on the few drivers that matter to that user to upgrade. First, work on your overall upgrade message, then get fancier by improving based on user intent and usage (Alice has some great tips for this).
2. Onboarding for expectations
If your goal is word-of-mouth, you need to be much more intentional in onboarding so that the free experience is strong; if you are focusing on long-term conversion, you may push a bit harder for paid upfront.
How much you communicate about premium during onboarding is a strategic choice. But no matter your goal, don’t be too discreet. Nothing is worse than thinking an app is fully free, only to get a nasty shock after you’ve invested effort in setting it up and using it. That erodes trust fast.
3. Working hard on paywall timing and visibility
A common mistake in freemium is low paywall visibility. I was watching a show on the Channel 4 app (Okay, it was Married at First Sight: Australia, don’t judge me too much) and I got about 11 episodes in, being driven absolutely mad by the ads. I ended up Googling and discovered that I could upgrade to ad-free for £3.99. Maybe they earned more from me through the ads, but I was at the point of abandoning the show in frustration at the 10–15 minutes of ads per episode. Not knowing about premium nearly caused me to churn entirely.
Consider what the right moments in the journey are to surface your upgrade offer. Spotify is the gold standard here: their ad interruptions aren’t random annoyances, but carefully calibrated strategic friction — a reminder of what premium feels like, placed at the exact moment you’re most annoyed by the free experience. It’s no coincidence they achieve a 46% freemium-to-paid conversion rate.
The best freemium apps don’t just build a great free tier and hope people upgrade. They design specific moments throughout the user journey where the value of premium becomes undeniable, and then make it effortless to act on that feeling.
Freemium isn’t glamorous
Freemium is one of the hardest monetization models to get right, but when it works, it compounds: free users drive word-of-mouth, which drives more free users, which strengthens your product (through data, network effects, or community), which makes premium more valuable, which funds more investment in the free tier. It’s a flywheel, but only if the foundations are strong.
The work in this guide:
- Deciding your goal
- Defining user success
- Choosing your architecture
- Mapping features with rationale
- Determining if you need a free trial
- Writing your Bill of Rights
All of this isn’t glamorous. But it’s the difference between the median freemium app (2.2% conversion) and the top 10% (where freemium apps outperform even hard paywalls), so do the strategic work first, and then I give you full permission to go wild on the tactics.