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Don't Offer a Free Plan

nofreeplan.com

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Re: Don't Offer a Free Plan

#51

Post by qwerty456127 »

I'd argue you should measure how active does a user use a product and only charge them when you see they actually make reasonably heavy use of it.

An inactive user doesn't cost much and can convert into an active-and-paying user once. A slightly-active newcomer doesn't cost much either and can actually bring value by reporting bugs (incl. UX bugs like unintuitiveness).

I wouldn't pay for what I had no chance to try. A free month is also useless: I just sign up and then see it expire as I fail to find spare time to actually try it.

Just measure how active the user is and tell them they will have to start paying soon once they reach a certain threshold in median daily interactions or in storage/traffic/whatever. Don't forget to provide an option to export and delete their data.

Re: Don't Offer a Free Plan

#52

Post by jariel »

If there is any network externalization at all, you have to have a free plan, because 0.01 is a barrier.

Consumer services are like this.

But SaaS can be as well.

But it's true you don't need to provide businesses anything for free over time.

If a company can't pay you $20 a month, they are mostly useless to you.

Re: Don't Offer a Free Plan

#53

Post by andrewem »

9dev wrote: post #11

The article is missing out a huge argument in favour of free plans: the opportunity to generate data. This doesn’t even need to be done in a shady manner - imagine analysing what users usually type in free form boxes, normalise that and build a tag hierarchy, for example. There’s a billion way to make a free plan useful - it’s not just a curtesy to your users!

Have you (or anyone else here) done that and succeeded at it? I can see why one would assume it could somehow be useful, but in the absence of someone accomplishing it I’m skeptical.

Re: Don't Offer a Free Plan

#54

Post by christiansakai »

Slightly unrelated, but the mantra "Charge More" should be applied in context. I have a friend who is currently selling a super beginner Japanese lesson (and by super beginner, I really mean super beginner) that she charges for $45 x 6 month === almost $300, yet the content can be found on $9 apps in the App Store. She is confused why, despite her 8k followers subscribed to her email, she can only convert a handful few to the lesson.

Re: Don't Offer a Free Plan

#55

Post by EdwardDiego »

ben509 wrote: post #43
jonpurdy wrote: post #13

Anecdata: Trello and Jira both have free plans that I used that caused me to recommend them for paid usage at multiple companies I’ve worked with. Those free plans resulted in $xx-$xxxx monthly subscriptions. Asana has a paid plan with a 5-user minimum limit. I never bothered to even try it since I wouldn’t have the extended time to play with it. As a result it never even got mentioned to companies I’ve worked with.…

I think trials can be improved for services where you can discern whether the user is directly interacting with it. You give them 100 days of usage, and then decrement a counter when they interact with the site the first time each day.

This would be ideal for me. I might not need to use your project every day, so only giving me 14 days that count down from my sign up is not ideal.

Also, please don't send multiple "You've only got X-N days left in your plan!" pressure-to-convert emails.

Re: Don't Offer a Free Plan

#56

Post by jrochkind1 »

Free plans are marketing, not that people on free plans will convert to paid plans en masse, but that people who will start out on paid plans hear about the product because of how many people are using the free plan. The blog posts, the twitter posts, the conversations over drinks.

How likely is the free plan to work to do that, how do you make it more likely? i don't know. I just recognize the products that have done it. There is of course still a danger in the free plan costing you more than the marketing is worth.

Of then of course, once you become a household term (which would have been hard to do without the free plan), the free plan can be an albatross you'd like to get rid of.

An example which comes to mind is travis, which I don't think would have become nearly as popular without the free plan -- in part because they were kind of introducing the whole market of cloud CI. And of course, the recent new private equity owners of travis just got rid of the free plan, although I don't know how generalizable that particular example is, private equity is almost always about slashing costs at the intentional expense of future growth.

In fact, this now reminds me of recent discussions we've had about open-source centered busineses, like perhaps ElasticSearch. The open source license is what gets you the market share, but then perhaps interferes with your desire to maximize exploitation of that market share. Similar perhaps to what free tiers, at their best, will do.

Re: Don't Offer a Free Plan

#57

Post by lovemenot »

I wrote a SAAS pricing sheet last week, but I felt something was off.

Having read this article, I will replace free-tier with low-one-time-price / lengthy-but-capped duration / all-you-can-eat of somewhat restricted functionality. Where functional restrictions obviously correspond to our cost increasing linearly.

This approach seems especially pertinent to a service which has mostly one-time utility. ie few people would need a recurring subscription anyway. e.g. wedding planner for brides

Re: Don't Offer a Free Plan

#58

Post by EdwardDiego »

I steadfastly agree with the "don't require payment details for a trial period".

If I'm trialling this for usage in my workplace, I am not going to give you my personal credit card, and the business credit card is very rarely used for software subscriptions, and only if we have no other choice in payment options.

It's an immediate turn-off, plus it speaks of a slight lean towards dark patterns where my free trial turns into a paid account if I forget to cancel (because I wasn't using your service enough to think of it). I'm sure it looks good on your conversion rate Excel graph though.

Re: Don't Offer a Free Plan

#59

Post by NearAP »

While I understand the points being raised, I disagree with the proffered solution

1) Some folks build a small SaaS product to sharpen their skills, learn new things and as a strategy to position themselves for a higher paying job (they can put it on their resume and discuss it during interviews)

2) It also depends on your target market. Some folks convert to paying customers (huge paying customers) because they have experimented extensively with your product. Take Google App Engine (GAE)- folks use it extensively for small websites, and then when they have something they think can be commercialized, they become paying customers.

3) You can do like GAE and have a daily free quota which is basically a freemium model

4) Regarding the complaint about the headache of supporting free customers - you can make it clear that the free plan doesn't come with support or it comes with limited support

Re: Don't Offer a Free Plan

#60

Post by EdwardDiego »

hartator wrote: post #41

At https://serpapi.com , we are actually aiming for the reverse. We don’t have a free plan at the moment only free trials with credit card validations and are going to introduce a small free plan soon-ish. 3 big arguments for a free plan from our perspective: Ease for marketing, allow Enterprise users to try out when giving up credit card info is a process for them, and lower Stripe dispute rates.

> only free trials with credit card validations

Yeah, this has stopped me trialling services several times in the past, because I don't want to use my personal credit card, and the hoops to use a business credit card are rather time consuming.

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