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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on our pricing strategy book, Price to Scale, you want to look for natural signals in a user's behavior that suggest they’re outgrowing the free offering. Key metrics and signals include:
• High Usage or Consumption Levels
When users consistently hit the usage limits of the free tier—whether measured as API calls, data volume, or another core metric—it signals that their business needs have grown beyond what the free version supports. Our book explains that when users “move up” into usage tiers naturally, it’s a sign they’re ready to pay for additional consumption.
• Increased Engagement with Premium Features
When users begin to explore or frequently engage with features reserved for paid plans (or attempt workarounds to access more functionality), it indicates they see added value in premium offerings. Rather than force an upgrade, our approach suggests creating tiered pricing that facilitates a gradual transition based on natural growth.
• Frequency and Recurrence of Use
Metrics such as daily or weekly active usage can be a strong indicator. If users show consistent, high-frequency activity and start leveraging your product as a critical tool for their operations, these behaviors warrant a shift to a more sustainable revenue-generating tier.
In practice, rather than artificially pushing for upgrades, our book’s philosophy is to design your tiers so that a user’s growing engagement and needs make the paid version the natural—and economically justifiable—next step. This approach not only respects the customer's needs but also positions your pricing strategy to scale organically with their success.
In summary, by tracking usage limits, premium feature engagement, and overall frequency of use, you can accurately identify when a PLG user is ready to transition from your free tier to a paid plan.