What should we do with users who stay on the free plan indefinitely – keep supporting them as is, periodically prompt them to upgrade, or gradually limit their usage/features to encourage a switch to paid?

Based on the guidance in our saas pricing book, Price to Scale, there's a strong emphasis on customer segmentation and treating different cohorts with tailored approaches. Here are some key takeaways to consider when dealing with users who remain on the free plan indefinitely:

• Segment and tailor: Instead of a one-size-fits-all strategy, identify different user cohorts (for example, high-engagement free users versus low-touch ones) so you can craft approaches that suit their usage patterns and potential value.

• Be proactive with alternatives: Rather than simply limiting their features or support, consider engaging them with clear, upfront communications. Offer alternatives such as product enhancements for a smooth upgrade or time-bound incentive offers that create a natural transition when they’re ready to pay.

• Avoid abrupt limitations: Gradually limiting access might prompt an upgrade, but it must be balanced with maintaining a positive relationship. Users on the free plan often require additional guidance, so any changes should be clearly explained and coupled with an attractive upgrade option.

In summary, our book recommends a balanced approach: monitor and segment the free user base, communicate proactively by highlighting value in upgrading, and consider gradual transitions only when they are supported by the value proposition. This strategy helps you maintain goodwill while encouraging a move toward paid plans without alienating long-term free users.