Freemium Conversion Revenue Model
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Estimate the total revenue potential from a freemium user base based on conversion uncertainty.
NOTEAbout This Model
## Estimate the total revenue potential from a freemium user base based on conversion uncertainty. This model estimates **Total Expected Revenue** based on uncertain inputs: Free Tier Users, Conversion Rate To Paid, Average Revenue Per Paid User. Run the simulation to see the distribution of possible outcomes.
VARIABLEFree Tier Users
poisson(5.5e+4)
Estimate of the current or projected active free-tier user base.
free_tier_users
VARIABLEConversion Rate To Paid
beta(2, 19.45)
Typical SaaS freemium-to-paid benchmarks fall within this 0.5% to 5% range.
conversion_rate_to_paid
VARIABLEAverage Revenue Per Paid User
triangular(5, 27.5, 50)
The monthly subscription price or ARPU for the paid tier.
average_revenue_per_paid_user
FORMULAPaid User Count
free_tier_users * conversion_rate_to_paid
Calculate the number of users who convert to the paid tier.
paid_user_count
FORMULATotal Expected Revenue
paid_user_count * average_revenue_per_paid_user * 12
Calculate the total revenue generated from the paid tier over the specified duration.
total_expected_revenue
OUTPUTTotal Expected Revenue
total_expected_revenue
Total expected revenue from converting free users to paid plans. Sensitive to conversion rate assumptions—small improvements in conversion can dramatically change the revenue outlook.
What is Carlo?
Carlo is a visual tool for Monte Carlo simulation. Model uncertainty by dragging probability distributions, connecting them visually, and running thousands of scenarios instantly.