How to turn freemium users into loyal subscribers

Turning free users into paying subscribers is both a massive opportunity and one of the hardest challenges for subscription apps. Freemium is great for scale and reach — but if there’s no clear upgrade path, it becomes a leaky bucket fast. Since around 80% of free trial and conversions typically happen during onboarding, Freemium needs to do the heavy lifting of proving value. Still, all is not lost if users don’t convert right away — those who upgrade later in the lifecycle may stick around longer and renew more reliably.

In this guide, we’ll show you how to structure that conversion journey, from onboarding and CRM to trials and paywalls. Expect strategic considerations and real-world examples to help you connect the dots between user behavior and long-term revenue.

Key takeaways:

• Design freemium with intent – Offer real value in the free tier, but leave just enough out to create upgrade motivation (strategic friction).
• Drive early activation – Guide users to their “aha moment” within the first session to build trust and momentum.
• Segment by behavior and intent – Not all free users are equal; focus your efforts on those showing signs of conversion readiness.
• Use onboarding to set expectations – Show the difference between free and premium early, and reinforce it through CRM and UI nudges.
• Build habit loops – Align your engagement strategy with your product’s natural rhythm (daily, weekly, etc.) to drive retention.
• Trigger paywalls at the right moments – Don’t just focus on design—show them when motivation is highest (onboarding, milestones, limits).
• Structure trials and re-trials smartly – Guide users during trials to experience value, and re-offer trials to high-intent freemium users.
• Introduce flexible pricing – Capture value from users who can’t (or won’t) pay full price with Lite tiers, a la carte features, or family plans.
• Focus on long-term retention – Conversion is a milestone, not the finish line. The real win is building lasting relationships.

Show the value of premium by making free feel intentionally incomplete

Creating a successful freemium experience starts with setting clear boundaries between the free and paid experience. What are free users getting? What are they missing? And how do you help them realize that? Free users should be able to achieve meaningful progress toward their goal  —  but not reach the full solution. The freemium experience should feel useful, but intentionally incomplete. You want to give them around 80% of the solution so they can experience success and build trust in the product. The remaining 20%, the part that completes the job or unlocks the full benefit, is where Premium comes in. This gap should be just wide enough to create a compelling reason to upgrade, without frustrating or alienating users. That balance is what’s called strategic friction. 

One approach to strategic friction is to insert ads into your product. This gives users a taste of the cost of staying on the free tier but they pay with their attention rather than with money. For some segments, it’s enough of a nudge to consider upgrading, especially if Premium promises an ad-free experience.

Some users may churn from onboarding once they see that there’s a paywall. Unless you clearly show the difference between the free and paid experience, they might not understand that there is a freemium use case. And for some users, they want to preview the value proposition first before fully committing. 

Strategic considerations

• Offer 70–80% of the core solution to build trust without solving the entire problem.
• Design with “strategic friction” to highlight what users are missing.
• Use ad placements in the free tier as a soft incentive to convert.
• Re-engage users who bounce at the paywall using targeted push notifications or winback emails.

Calm offers 3 free listens but locks the majority of its content  —  including sleep stories and courses  —  behind a paywall. Users are encouraged to upgrade after completing a few free sessions, especially once they begin forming a daily habit.

Identify the “Aha” and stickiness moments that predict subscription

Every app should have a clear activation event: a key action that unlocks future value. For example:

• Completing a meditation
• Creating a project
• Uploading a file

Activation and retention metrics are essential for identifying whether users are on the path to conversion  —  and for nudging them when they’re not. Onboarding flows should drive users toward that action within the first session or two. That “aha” moment builds confidence and sets the stage for future conversion.

Once you’ve defined your activation metric, you can begin tracking which users hit it and which don’t. This segmentation offers crucial insight into your freemium user base. Users who activate but don’t subscribe right away have still taken a major step  —  they’ve experienced value, and they’ve formed an initial habit. These users are prime candidates for targeted lifecycle campaigns, value reinforcement, or contextual paywalls.

Tracking your core retention metric  —  the recurring action tied to your app’s long-term value (e.g., weekly workouts, journal entries, or uploads) — adds another layer. Users who demonstrate this type of engagement are often one or two nudges away from converting. By understanding who’s hitting your retention metric but not yet paying, you can trigger smart interventions:

In short, activation and retention metrics don’t just measure success — they help guide users down the funnel. Used well, they can power personalized experiences that make subscription feel like the next natural step.

Strategic considerations

• Define your “aha moment” (activation metric) within the first session or two.
• Track core retention actions tied to long-term value.
• Use these metrics to create segments for upsell, education, and trial offers.
• Offer time-sensitive trials
• Reinforce value with usage caps
• Introduce paywalls after a high-value behavior

Fastic shows a paywall when a user tries to perform a high value behaviour, like viewing their starts or clicking on recipes. Both of these behaviours indicate deeper engagement with the product.

Not all free users are equal: Use behavior to guide your upsell strategy

Understanding user intent helps you personalize messaging and prioritize conversion efforts. Not all free users are created equal. Some will never convert — and that’s okay. But others are quietly showing signs of purchase intent — they’re just not ready yet. The key is identifying those high-potential users early and building around them. Here’s what to look for:

• Repeat engagement with premium-locked features: If someone keeps trying to access a locked feature, they’re signaling intent — even if they haven’t hit the paywall yet.
• Power users of the core (free) value prop: If a user is coming back daily, completing core actions, or building a habit, they’re already getting value. If there’s a high proportion of users doing this, it could be a signal that you’re giving too much away for free.
• Positive responses to onboarding or feature education: Look for users who engage with tooltips, complete walkthroughs, or interact with in-app nudges. These behaviours often correlate with curiosity and readiness to learn more.

To scale this thinking, many teams use propensity scoring — a data-driven method for predicting which users are most likely to convert based on historical behavior. These models typically assign a score to each user, allowing you to segment your audience into low-, medium-, and high-intent tiers. High scorers might receive more aggressive upgrade prompts or early access to trials, while low scorers might benefit more from educational or habit-building content.

With this approach, you don’t need to waste time messaging users who are never going to convert. Instead, focus your product development and messaging on the high-intent cohort. Personalize nudges, run targeted tests, and experiment with trial timing or discounts. Even a small uplift in this group’s conversion can have a decent impact on LTV.

Another thing to consider is that some freemium users may not be aware that certain Premium features exist. They may never intentionally tap on a locked feature, or they may assume that what they’re seeing is all your app has to offer. In these cases, relying solely on paywall interactions or passive discovery won’t be enough. Having a dedicated feature education flow — delivered through an onboarding sequence or a later-stage CRM journey — can bridge that gap. This could include:

• A walkthrough that highlights premium features in context
• A carousel message or tooltip that appears after a key milestone
• An email or push campaign that spotlights one high-value premium capability at a time

Think of this as a soft, ongoing introduction to what the user could unlock. It can be especially effective for users in the medium-intent range: they’re curious, engaged, but not yet convinced.

Strategic considerations

• Look for signals like repeat engagement with premium features or high usage of free tools.
• Use propensity scoring to identify low-, mid-, and high-intent users.
• Design targeted journeys based on user tier (education, trials, discounts).

Use onboarding to build habits, set expectations, and spark upgrades

Purposeful onboarding is a key driver of freemium conversion success. It’s your best chance to showcase value, differentiate free vs. premium, and guide users toward forming habits. The best onboarding experiences help users reach their “aha moment” early — usually by prompting them to complete a key action tied to the app’s core value (like editing a photo or completing a meditation).

To maximize impact, onboarding should be segmented by user intent or goals and supported by CRM channels like push and email. Contextual nudges (e.g., tooltips, banners) and structured checklists can reinforce key behaviors and highlight locked features without overwhelming users. This helps move medium-intent users closer to conversion while keeping the experience helpful, not pushy.

Ultimately, onboarding should be less about showing everything and more about showing the right thing at the right time — to help users succeed, build trust, and feel ready to upgrade. The ultimate goal is to set expectations and plant the seed that this is a subscription app.

Purposeful onboarding is more than a quick tutorial — it’s your most important opportunity to:

• Introduce users to your core value proposition
• Set expectations for the free vs. premium experience
• Accelerate the path to habit formation
• Guide users toward the moments that matter for activation and retention
• Plant the seed for future conversion

Strategic considerations

• Use onboarding to lightly introduce the premium value proposition through:
  • Feature comparison charts
  • In-app tips that mention locked tools
  • Soft CTAs (e.g. “Want to do more? Upgrade to Pro”)
• Segment onboarding experiences based on user goals or declared interests.
• Reinforce onboarding milestones via CRM channels like push, email, or in-app messaging.
• Use checklists or “get started” goals to encourage users to activate quickly.
• Deploy contextual nudges (like tooltips or banners) triggered by user actions.
• Guide users toward “happy moments” quickly, and then highlight what more is possible with premium.

Sports betting tips app, TipsTop, clearly shows the difference between the Free and Pro value propositions on their paywall.

Personalize the path to habit and conversion will follow

Retention drives revenue and habit formation is the key driver of retention. Once users are activated, the next step is making them come back.

To drive long-term retention, you need to help users build consistent habits — and that starts with reinforcing daily or weekly engagement. One of the most effective ways to do this is by building a feedback loop that nudges users back into the product at the right time. Features like daily reminders, weekly goals, and personalized content recommendations help users stay on track and reinforce your app’s core value over time.

The key is to align your feedback loops with your product’s natural usage cadence. If your app is designed for daily check-ins (like wellness or learning apps), consider streaks, motivational messages, or progress tracking. If it’s more episodic, lean into weekly summaries or milestone celebrations.

When combined with personalized onboarding and CRM, these loops create a rhythm that keeps freemium users coming back — and positions them for conversion later in the funnel.

Think about your product’s natural usage rhythm (daily? weekly? monthly?) and build around that cadence. There’s no point in trying to force a daily usage habit around a product with a monthly use case. That’s a losing battle.

Personalization is one of the most effective ways to keep freemium users engaged and nudge them toward conversion. When your app feels relevant — tailored to a user’s goals, preferences, or usage patterns — it becomes harder to abandon and easier to trust.

Start by collecting input through onboarding surveys to understand each user’s interests, motivations, or desired outcomes. This information can then be used to guide content recommendations and feature suggestions. As users interact with your product, adapt their experience using behavioral data — highlight features they’re most likely to value, or offer contextual nudges based on what they’ve done (or haven’t yet done).

Segmenting your users by type — for example, casual browsers vs. power users — lets you tailor messaging, offers, and CRM campaigns more effectively. Push notifications, emails, and in-app prompts can all be personalized based on this segmentation.

Ultimately, personalization isn’t just a “nice to have” — it’s a key ingredient in moving users through the freemium funnel. By making each touchpoint feel relevant and timely, you create a more compelling case for users to keep coming back — and eventually upgrade.

Strategic recommendations

• Align your feedback loops with your app’s natural usage cadence (daily, weekly, or monthly).
• Reinforce value through habit-forming features like streaks, progress tracking, or milestone celebrations.
• Use push notifications or emails to trigger reminders or check-ins at times when users typically engage.
• Personalize content and prompts based on behavioral data to ensure relevance.
• Test different feedback mechanisms — like weekly summaries or goal resets — to keep the experience fresh.
• Avoid trying to force daily engagement for products with inherently low-frequency usage.

Don’t just design paywalls: Trigger them strategically

Many teams spend a lot of time optimizing how their paywall looks — but the biggest wins often come from optimizing when and how users see it. Before obsessing over design, make sure your paywalls are actually being triggered at the right moments.

Here are five high-impact moments to consider:

1. Onboarding. Motivation is highest right after a user installs your app. This is a great time to show the value of premium and prompt a trial — especially since many users churn after Day 0. Don’t wait for them to find your paywall deep in the UI.
2. Happy moments. These are key moments when a user succeeds at something for the first time — like editing a photo or completing a meditation. It’s the perfect time to reinforce value and introduce the benefits of upgrading.
3. Friction points. “Positive friction” happens when a user hits a meaningful limit — like maxing out free features or daily usage caps. These moments make the need for premium clear and contextual.
4. Indirect intent. Some users never hit a locked feature but still behave like high-converting users. Track engagement patterns and trigger paywalls accordingly.
5. Direct intent. When users directly engage with locked features or reach a paywall but drop off, follow up with winback strategies like targeted discounts.

Strategic considerations

Use free trials strategically, not generously

Free trials are a great way to reduce friction to paid — but only if they’re structured around your app’s value. Used well, they can introduce premium features at the right moment, highlight the upgrade path, and move high-intent users across the line.

Strategic considerations

• Offer trials to users who are already engaged, rather than pushing them on install.
• Experiment with “reverse trials” — start users on Pro and remove access after a few days unless they upgrade.
• Guide users during the trial to ensure they experience key value moments.
• Use behavioral triggers and CRM nudges to reintroduce trials to long-term freemium users.

• Create onboarding-style checklists or progress bars to direct users through premium features.
• Prompt exploration of high-value features.
• Remind users what they’ll lose near trial-end, using data from their usage.

Consider re-trials for experienced freemium users

Some users stay on the freemium plan for months — even years — while continuing to actively engage. If they’ve demonstrated high intent but never converted, a re-trial offer can create a fresh window of opportunity.

Re-trials work best when triggered by usage milestones or CRM rules (e.g., “You’ve unlocked 80% of what Pro users get — try it free for 7 days”). Just be sure to segment carefully to avoid cannibalizing full-price conversions.

Design tiered plans that align with user needs and budgets

Not every user who’s engaged is ready — or able — to pay for your full-featured premium plan. Introducing tiered offerings, including lower-priced “Lite” plans or one-time purchases, can help capture revenue from users who may otherwise never convert.

Strategic considerations

• Use behavioral and pricing sensitivity data to segment users by willingness to pay.
• Introduce entry-level or “Lite” plans that offer limited access at a lower price point.
• Offer add-ons or a la carte features for users who only want specific functionality.
• Use upsell pathways from Lite to Pro once users build trust or develop stronger habits.
• Test family or multi-user plans for high-usage or shared-use cases.

Spotify introduced a low-cost mobile-only plan in emerging markets to address affordability concerns while still driving conversion.

Wrapping up

Freemium isn’t just a pricing strategy — it’s a full user experience strategy. When executed well, it becomes a powerful acquisition engine, a behavioral funnel, and a bridge to long-term subscriber growth.

To turn freemium users into loyal subscribers, you need to:

• Clearly define what’s free vs. paid — and make it easy for users to understand the difference.
• Drive users toward activation moments early in their journey.
• Segment based on intent and behavior so that you focus efforts where they’ll have the most impact.
• Reinforce habits with contextual nudges, reminders, and feedback loops.
• Time your paywall triggers around high-value moments, not just generic app flows.
• Guide users through trials with structure — and revisit re-trials for loyal freemium users.
• Introduce pricing tiers that meet users where they are — whether that means Lite plans, add-ons, or family subscriptions.

Above all, remember: conversion is not the end goal — retention is. The best freemium strategies aren’t just about nudging people toward payment, but helping them stay, succeed, and grow into power users who stick around. Done right, freemium can be the start of your strongest customer relationships.