Set the right product limitations to reduce SaaS churn

How to use the technique

• Choose appropriate limitations. Should you limit features, output, usage, capacity, or something else? This should be linked to customer lifecycle and buyer persona. Let them solve their big problem with your app but with restrictions. This will motivate them to convert and will reduce churn. Read more in our free churn optimization framework.
• Decide what features to offer free users. Of course, you can offer all the features but do apply restrictions (such as time) so as to motivate users. Else, they will stick with free plan forever.
• Differentiate premium from the free plan. There should be a clear and significant difference between premium and freemium. It should be evident.
• Limited support. Use it with care. Limited support doesn’t mean not responding to the queries of free users. Use limited support as a differentiator to persuade them to convert.
• Tell users what they're missing. Send emails. Send in-app notifications. Use powerful CTAs to show them how they can get what they're missing.
• Make conversion easy. Keep conversion straightforward. Allow users to upgrade their plan with one-click. This works best to reduce churn and increase conversions.
• Track conversions. Measure performance and conversion rate. Tweak limitations for comparison. Do users become paid customers? Read our free guide to learn everything about testing and tracking.

Mistakes to avoid

• Not setting limits at all. This can prove to be suicidal for your business. If there aren’t any limits and free users can enjoy your app without any restrictions, they won’t convert. There has to be something missing to motivate them.
  
• Limiting the core feature. Don’t limit the core feature of your app. Let users fully explore your app’s primary feature. It is best to partially limit the core feature.