Freemium, Free Trial or Subscription: How to Monetise Software

There is no universal model. Freemium maximises users but dilutes conversion, a free trial filters towards serious users, a subscription funds a product that evolves, and a one-time purchase suits tools used a few times a year. The right choice depends on frequency of use and the product's repeated value.

This is the second episode of our series on building a SaaS. After the first episode, here is the question that follows every launch: how to earn money from software. We chose different models for different products, and we explain why.

Freemium offers a limited free version and sells a full one. It lowers the entry barrier and feeds word of mouth. Its trap: the free version must be useful enough to attract and limited enough to make people want to pay. Too generous, nobody pays; too restricted, nobody tries.

Studies on paywalls contradict each other depending on how conversion is measured (from download or from the payment screen). Keep caution in mind: no general rule replaces a test on your own product.

A trial gives access to everything for a limited time. It suits products whose value shows with use. Its trap: the user may forget to try, or lose the thread before it ends. It also needs a clear path to value before the deadline.

A subscription makes sense when the product delivers a continuous service: hosting, updated data, regular use. It funds the product's evolution. But it meets resistance: people dislike paying monthly for a tool they use twice a year.

For software you open now and then, a single payment is often better accepted. The downside for the vendor: one-off revenue, no recurrence, which means you must keep finding new customers.

• VectorPop: free with 5 SVG exports to try on real files, then a Pro version at €39 as a one-time payment. A vectorizer is used a few times a year: a subscription would be poorly received.

• VoxCut: a free version with a duration limit per file, then a Pro version as a one-time purchase. Users process files of widely varying lengths.

• VidScope: a free plan of 2 analyses, a €9 pass for 5 videos, a Pro subscription at €19 a month for 15 analyses and a lifetime licence at €149, with a launch offer at €79. The cost of an analysis (AI models) justifies quotas.

These choices are not final. We measure them, as explained in how to price a SaaS product.

• How often does the user need it? Rarely: one-time purchase. Regularly: subscription.

• Does the product have a variable cost per use (compute, API)? Then plan quotas.

• Is the value visible in a few minutes? Then freemium or a trial works.

• Can you measure conversion? Without it you are choosing blind.

The monetisation model is a hypothesis. Choose the one that matches real use, measure conversion, and adjust with data. To understand why users do not pay, read why a SaaS can have users but no sales. You can see our models at work on vectorpop.fr, voxcutpro.com and vidscope.fr.

What is the best monetisation model for software? There is none best in general: it depends on frequency of use, cost per use and the product's repeated value.

Freemium or free trial? Freemium attracts more people, a trial filters serious users. Test both on your product if possible.

Is a one-time purchase still viable? Yes for occasional tools, as long as you keep acquiring new customers, since revenue is not recurring.

When is a subscription justified? When the product delivers a continuous service or has a recurring cost, such as hosting or compute on every use.

How do you know the model works? By measuring conversion between free use, the payment screen and purchase.