The Evolution of Freemium in SaaS
Freemium was once the go-to growth lever for B2B SaaS businesses. Offer a useful product for free, build user adoption at scale, and convert engaged customers over time. That model made sense during the years when the market rewarded growth above all else.
But priorities have changed. Today, profitability is in focus, and the true cost of offering free access is under scrutiny.
In June 2025, Slack announced pricing changes that reduce what’s available on its free plan, pushing more teams to adopt paid tiers earlier in their lifecycle. Notion followed with a similar approach, moving more features behind its paywall while enhancing what’s offered to paying users. The result is a strategic shift across the industry. Free access is no longer indefinite, and conversion is expected sooner.
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Why SaaS Companies Are Reconsidering Free Tiers
The freemium model comes with growing challenges. Supporting non-paying users increases infrastructure and support costs. Conversion rates remain stubbornly low. Most importantly, delayed monetization no longer fits today’s market environment, where investors expect clear paths to revenue and profitability.
SaaS firms are realizing that a broad free tier can dilute product value and attract the wrong user segments. The focus has shifted to quality of engagement, not just quantity.
Making the Shift Without Alienating Users
Changing a freemium model requires careful communication. Companies need to bring users along for the journey, not surprise them with abrupt changes.
Slack’s messaging around its new pricing emphasized added value and scalability for teams. Notion combined its pricing shift with new feature releases, helping users feel that they were gaining more even as access became more limited.
Grandfathering existing users or offering extended transition periods also helps soften the impact. These tactics show respect for early adopters and reinforce loyalty during times of change.
Is There Still a Role for Freemium?
The freemium model still has a place in SaaS, but it must serve a clear strategic purpose. If a free tier is not directly contributing to user acquisition, education, or upsell, it can become a liability.
Modern SaaS firms are reimagining their free offerings as short-term trials or limited-use introductions, designed to show value quickly and encourage upgrade paths. The era of unlimited free access is fading.
Final Thought
The move from free to paid is not just a pricing shift. It reflects a broader maturity in the SaaS space. Companies are focusing on financial sustainability, long-term value, and disciplined growth. When handled with clarity and purpose, the transition from freemium can strengthen a brand rather than weaken it.
