Conversion Rate from Free to Paid Users
Percentage
This metric assesses the effectiveness of converting users from a free version of the software to a paid version. It’s a critical indicator of the software’s monetization success and perceived value among users. A high conversion rate suggests strong product satisfaction or successful upselling strategies, whereas a low rate might indicate a need to enhance perceived value or revise pricing structures.
Formula
(Number of Users Converting from Free to Paid / Total Free Users) * 100
Example
If 150 out of 2,000 free users upgrade to a paid version, the conversion rate is (150/2000)*100 = 7.5%.