Definition
Freemium conversion rate is the share of free users who become paying customers, usually within a fixed time after signing up.
Formula
Freemium conversion rate = free users who upgraded within N days ÷ free users who signed up in the cohort × 100.
Measure per sign-up cohort with a fixed window, so recent users aren't counted before they've had time to convert.
Improving it
Look at what converted users did before upgrading: which limits they hit, which features they used. Make that path easier, and show the upgrade at the moment a user needs what it unlocks.