Freemium Revenue Forecaster
The "Funnel Math" of Freemium. How many free users do you need to make money?
How This Tool Works
Freemium is a volume game. You give away a limited version of your product to get users in the door, then upsell them. This calculator works backwards from the top of the funnel to predict your Monthly Recurring Revenue (MRR).
- The Math:
Traffic * Free Signup Rate * Paid Conversion Rate * Price = MRR - The Goal: Find out if your conversion rates are realistic enough to build a sustainable business.
How to Use
- Traffic: Unique visitors to your marketing site per month.
- Signup Rate: Percentage of visitors who create a free account.
- Conversion Rate: Percentage of free users who eventually upgrade to a paid plan.
Example Funnel
Traffic: 10,000 visitors.
Pricing: $29/mo.
• 5% Signup for Free = 500 Free Users
• 3% Upgrade to Paid = 15 Paid Users
• New Revenue: $435/mo
Why This Matters
Many founders underestimate the traffic needed for specific revenue goals. If you need $10k MRR but only get 1,000 visitors, the math won't work unless you have a high price or viral conversion.
Limitations & Disclaimer
• This represents a single month's cohort. Revenue compounds over time as you stack
cohorts.
• It assumes all conversions happen in the same month (real sales cycles are longer).
FAQs
A good benchmark is 2-5%. Best-in-class products like Spotify or Slack can see higher rates (25%+), but for most B2B SaaS, aim for 3-4%.
Freemium is deeper (forever free) but harder to monetize. Free Trial forces a decision (buy or leave) after 14 days. Use Freemium if your product has a viral loop or low marginal cost.
Average Revenue Per User. It helps calculate if the paid users cover the server costs of the free users.