Freemium conversion percentages, Online companies
Even though this blog i mainly targeted at freemium for non-tech companies. I have compiled a short list of different online freemium conversion rates. These are just the ones I could find with a quick scan of the web, if you have any more, please write them in the comments
Of cause conversion the rate is just a part of a calculation that includes costs, user base and price of premium. Yet it can give a an idea of how others are doing.
Skype 7-8,5 % Source
Flickr 10 %
ning 3 % Source
Club Penguin: 25% Source
Habbo: 10% Source
Runescape: 16.6% Source
Puzzle Pirates: 22% Source
Companies at dealmakers - Echosign, Seriosity, Smartsheet, Central Desktop, Oddcast, Yugma and others. Between 1.5 and 5 % average 3 % Source
Shareware sometimges less then 0,5 % Source
Buzzgain free to premium users 2.7% Source
Open source software 3 % Source
Xing 7,9 % Source
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Photo credit: ONER TUYLUOGLU
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Should be noted that the Dealmaker data is more than a year and a half old (May ‘07). From conversations I have had with other CEOs who promote a freemium model, may have shared that their conversion rates are improving. Why? It’s as much about the services improving as it is about improved targeting and changes in distribution strategy.
The across the board avg conversion rate is one that I’m hearing less about. Much more focus on the conversion rates within specific channels. For instance, a broad-based list mailing may deliver sub 1% whereas a targeted promotion with a distribution partner can deliver 15% or higher. Depending how you manage the levers/programs within a given month or quarter, your average can fluctuate materially.
Another interesting take on this survey might be to ask what the conversion rate is within your best segment, how much volume does it produces, and what the average cost to acquire as a multiple of ARR (annually recognized revenue) is.
While interesting, you might hear fewer CEOs speak openly to the performance within their top distribution segments.