SaaS

What is Freemium?

Definition

A pricing model that offers a free tier with limited features while charging for premium functionality. Freemium works best when the free product delivers genuine value and naturally motivates upgrades.

Related Terms

LTV (Lifetime Value)SaaS

The total revenue a business expects from a single customer account over the full duration of the relationship. A healthy SaaS business targets an LTV-to-CAC ratio of at least 3:1.

Churn RateSaaS

The percentage of customers or revenue lost during a given period. High churn signals product-market fit issues, while negative net-revenue churn (expansion outpaces losses) is the gold standard for growth-stage SaaS.