About the Freemium & Trial Conversion Calculator
This calculator models a freemium or free-trial funnel from signup to paying customer. Enter monthly signups, the share who activate (or start a trial), the share of those who convert to paid, your price and monthly churn, and it returns your overall free-to-paid rate, new paying customers and MRR each month, lifetime revenue per signup and how much MRR you will have after a year.
It helps SaaS founders, product managers and growth teams decide whether a free plan pays for itself. Free users cost money to host and support, so the calculator also nets out the cost of serving users who never pay and shows the break-even conversion rate below which the free tier destroys value.
Lifetime value uses a simple price ÷ monthly churn model, and the 12-month MRR projection assumes signups, conversion and churn stay constant. For a free trial, set activation to the share of signups who start a trial and paid conversion to trial-to-paid.
With the default inputs, the lifetime revenue per signup is $30.00. Change any value above to recalculate instantly.
How to use the freemium & trial conversion calculator
- 1Enter monthly signups and the share who activate or start a trial.
- 2Enter the share of activated users who convert to paid.
- 3Add average monthly price, gross margin and paid churn.
- 4Optionally add the monthly cost and lifespan of free users.
- 5Read revenue per signup, break-even conversion and the 12-month MRR chart.
Formula and method
The funnel multiplies the two conversion steps to get the share of signups who pay. Lifetime revenue per paying customer uses the standard steady-state formula price ÷ monthly churn, so revenue per signup is that lifetime value multiplied by the overall conversion rate.
Net value per signup uses gross profit (LTV × gross margin) and subtracts what it costs to host and support the signups who never pay for the months they stay. Setting net value to zero gives the break-even conversion rate. The 12-month MRR projection adds each month’s new MRR and removes churn from the existing base.
- LTV
- Lifetime revenue per paying customer
- Free cost
- Monthly cost to serve one free user
- MRRₘ
- Monthly recurring revenue at the end of month m
Worked examples
Freemium product with an activation step
50% activation × 8% paid conversion = 4% of 10,000 signups, or 400 new customers paying $30 ($12,000 new MRR). At 4% churn each customer is worth $750, so a signup is worth $30 in revenue and about $22.85 in gross profit after serving free users. MRR reaches about $116,187 after a year.
Free trial with no free tier cost
40% of signups start a trial and 25% of trials convert, so 10% of signups pay $49. At 3% churn lifetime revenue is $1,633, or $163.33 per signup, and MRR builds to about $250,000 in 12 months.
Low-priced consumer app where free users cost too much
Only 2% convert at $10 with 6% churn, so a signup brings $3.33 of revenue and $2.50 of gross profit. Serving the other 98% for a year costs $5.88 each, a net loss of $3.38 per signup; conversion would need to reach about 4.58% to break even.
Frequently asked questions
What is a good freemium conversion rate?+
Many freemium products convert roughly 2–5% of signups to paid, with top performers higher. Free trials typically convert better — often 10–25% of trial starts, and more when a credit card is required upfront.
Is freemium or a free trial better?+
Freemium suits products with low serving costs and strong network or word-of-mouth effects. Free trials suit products whose value is clear quickly and that cost more to serve. Model both funnels here with realistic rates and compare net value per signup.
How do I calculate free-to-paid conversion?+
Divide the number of users who became paying customers by the number who signed up in the same cohort, and multiply by 100. Measure by cohort so that late converters are credited to the month they signed up.
Why include the cost of free users?+
Hosting, support and infrastructure for non-paying users are real costs. If conversion is low and free users stay a long time, those costs can exceed the gross profit from paying customers, making the free tier unprofitable.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.