Freemium SaaS: 5 Steps before Launching and Growing

The myth around freemium SaaS products and product-led growth is that simply offering a product for free will automatically result in growth. It requires a lot of groundwork to get it right, like validating your audience and refining your product, which determines whether you’ll attract the right users and convert them into paying customers. Here’s my step-by-step approach if you are launching a freemium SaaS:

1. Define Your Value Proposition and Ideal Customer

Before you build or launch, you need to know exactly who you are building for and why they would care. In Validating Product-Market Fit, I wrote that if you can’t clearly state the problem you solve, who you solve it for, and why it matters, you are not ready to launch. Spend time interviewing potential customers, asking what matters to them, why they haven’t solved it, and understanding what would make your product a must-have, not just a nice-to-have.

In my post, 5 Most Challenging Things with Product-Led Growth, I mentioned:

2. Listen using Onboarding Calls and Paywalls

Don’t keep building and launching blindly. Get your product in front of real users early through private betas, user interviews, and onboarding calls. In my 30-minute breakdown of an Onboarding Call, I wrote about how using the onboarding call as a way to learn what our prospects were struggling with, what solutions they were looking for, what expectations they had, and what they were willing to pay.

In Paywall Learnings, and Pricing & Packaging Strategy I talk about the fastest way for me to optimize our pricing model and getting customers to pay:

3. Nurture Free Customers to Paying Customers Using Customer Success

Customer success is the growth engine that turns free users into paying customers. Scaling proactive support and community resources help users realize value fast, reduce churn, and improve retention. Product-led growth customer success teams should use product feedback and sales objection to create self-serve documentation, FAQs, interactive demos, etc, and keep product-led growth bumpers to get users to activate.

First I wrote your Onboarding Sucks. In it, I talk about how you have* to hop on onboarding calls and hear what your customers say. Are they just nodding? Are they asking what to do next? Are they unclear about the terminology you are using? Are you making them feel reassured?

And the whole team, from sales, product, marketing, and customer success can help bridge that. The customer success team continues to follow-up with customers to nurture and upsell them. Any objections should be incorporated back into onboarding. Any expectations should be handled during activations. Improve tooltips, documentations, UX, and paywalls. Invest in help content, responsive support, and proactive outreach. As I wrote in my guide on Customer Success in PLG:

4. Leverage Word of Mouth

The best growth is earned, not bought. Delight users by solving real problems and they will share your product with others. In Word of Mouth, I explained:

So word of mouth and virality are not luck. Virality is the result of strong product retention. Retention is the one growth metric to optimize. 40% of our PLG sign-ups came directly from word-of-mouth and referrals. Onboarding calls encouraged activation and retention, and it also put a “face” to the software. After 100+ onboarding calls, we knew how to reassure customers, and they became our champion and advocate on social. Learn more about how to drive word of mouth in my guide on Product Led Marketing:

5. Set Up Metrics, Churn Analysis, and Feedback Loops

You can’t improve what you don’t measure. Before launch, start tracking metrics that matter most: activation rate, free-to-paid conversion, churn, and customer lifetime value. Churn analysis is critical to understanding why customers leave—every lost customer is a lesson. Learn more about

Lead your team using usage data, onboarding calls, paywall feedback, and customer feedback. The best SaaS teams treat customer feedback like oxygen. It fuels every decision. Build a Customer Feedback Roadmap.

Bottom line:
Launching a freemium SaaS product is a process. Don’t just believe freemium will work for every industry. In the beginning, most customers don’t know about you; only if you can start conducting customer development can you start figuring out what matters to them. And then, can you develop your marketing strategy around your freemium? Define your value and audience, test and refine relentlessly, design onboarding for real users, build anticipation, and measure everything. I have learned (sometimes the hard way).

P.S. Experiment fast. As I talk about A Year in Life as Head of PLG, it starts with optimism. Along the way, it requires constant experimentation, communication, and resilience. Things can get uncertain, so iterate quickly to get yourself out of the rut.

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I am Gary Yau Chan. 3x Head of Growth. Product Growth specialist. 26x hackathon winner. Building ClarityInbox. I write about #PLG and #BuildInPublic. Please follow me on LinkedIn, or read about what you can hire me for on my Notion page.