It’s expected that comments on this thread would be divided into two camps, from both sides of the table - customers and service providers.
Don't Offer a Free Plan
101–110 of 232 posts
Re: Don't Offer a Free Plan
#102Slightly 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 f…
With just the information you've given, there's no way you can conclude with certainty that the price is too high. The real question is, how targeted is the email list towards a japanese language course offering, and what is the open rate on the email list. If everybody on the list is interested in learning japanese, AND, the email list has good open rates, that MIGHT mean her pricing is too high. Or not. That said,…
Well, I looked into her courses (and I, though not a beginner, already tried more than 20 apps out there so I know what a $300 or $9 content should look like), and plenty of people on her social media commented that it is way too expensive...
Going by your logic, why doesn't she increase the price to $30000?
Re: Don't Offer a Free Plan
#103Earlier quoted context omitted.
The article says, "Counter-intuitively, the less the user pays the more likely they are to need your help", but that's not so counter-intuitive if you invert it. Cheap users tend to be inexpert users. Expert users who really value your offering enough to pay more are those who understand why it's worth the money. They likely understand the problem or use that your work addresses, and they have enough knowledge to kno…
Also once you deal with medium to large companies they will have an internal support team solve a lot of minor issues before it ever gets escalated to you.
Apart from those (I could name some medium and large financial services companies the following supplies to, but won't for obvious reasons) who officially have their own first-line support (and even try demand a per seat discount on that basis) but that support is useless: their idea of providing support is simply forwarding emails to us, no triage, no collation, no digging for extra information. Heck, sometimes they are worse than useless and make things worse, like not passing on some of the information the end user _did_ think to provide.
Not all are like this if course. But the proportion who are terrible is higher than you'd like.
Re: Don't Offer a Free Plan
#104Anecdata: 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.…
The article specifically mentions free trial periods as being a good idea.
Terrible title on their post then.
I, personally, rarely use a trial period for anything I’m testing for the long term. It’s not worth integrating it into my day to day if I may have to pay more then I want.
BUT, I do think it’s important to offer a free level for a lot of simple services to get people hooked. Costco does it, and it works for a lot of software.
Re: Don't Offer a Free Plan
#105Earlier quoted context omitted.
Also once you deal with medium to large companies they will have an internal support team solve a lot of minor issues before it ever gets escalated to you.
Apart from those (I could name some medium and large financial services companies the following supplies to, but won't for obvious reasons) who officially have their own first-line support (and even try demand a per seat discount on that basis) but that support is useless: their idea of providing support is simply forwarding emails to us, no triage, no collation, no digging for extra information. Heck, sometimes they…
I guess that is possible, I am only working with anecdotal evidence here. I have only ever seen the case where internal support handles most issues and less than a handful needs to be escalated to the vendor each year.
Re: Don't Offer a Free Plan
#106This is really aggressively oversimplifying a complicated problem that exists across a huge number of different types of software. In some cases, sure, a free plan is going to cost more in effort than it pays in users who convert to paid. That said, the objection that free users are going to take up too much time is pretty easily solved... look at Google, which has zero customer support and an enormous number of free…
I view articles like this as if I'm watching a high school debate team competition where the author is forced to argue a side while ignoring the positives of the other side. Fun for seeing emphasizing different perspective, not so great for giving a balanced view.
> In some cases, sure, a free plan is going to cost more in effort than it pays in users who convert to paid
Definitely. This is the most common mistake I see with free plans. Over-eager founders like to think of their free plan as a trial period, where users will either stop using the product or go on to subscribe.
Instead, huge portions of your userbase simply want as much free product as they can get without paying for anything. Never underestimate the number of people who will gladly use your product right up to the limits of the free plan without stepping over.
This can be okay if those free users end up doing free marketing for you. Dropbox is a perfect example of a tool where many (most?) users never even have a need to upgrade from the free plan. However, those free users were poised to recommend Dropbox when their companies were looking for a file storage and sharing solution. They also spread the Dropbox name around with Dropbox share links.
Slack is another great example of a free plan that lulls users into proselytizing for you. How many companies adopted Slack simply because some of their teams were already using the free plan to get work done?
Yes, free plan customers tend to complain way more than you'd think. However, you don't have to listen to them whine. You just have to make sure they aren't soured on the experience in general. If your core product can be reduced to something with near-zero operating costs and an absolutely bulletproof, hands-off operating mode, a free plan isn't much of a drag on your company.
However, if your product is such that free users generate the same costs/server load as regular users, you're going to inadvertently create a business model where your 10% of paying customers are subsidizing the 90% of free customers. You really need some clear limits on the free plan and an ultra low overhead backend to make this work at all.
Re: Don't Offer a Free Plan
#107It is sad but true that users that pay less, or zero, are more demanding on customer support and make unreasonable demands via social. Had a guy this week using our free product that has 90% of the paid products features berating us on Twitter for not being 100% free and demanding we convert and rely on donations to support our 40 person team. Makes me regret having a free offering. In my 20 years doing software star…
“ demanding we convert and rely on donations” People whining for more is fairly normal. Wanting it for everyone in perpetuity is new. Does everyone think most businesses are somehow ad supported?
> Wanting it for everyone in perpetuity is new.
Nah, that behaviour has been around since before this millennium. They don't actual want it for everybody but they think they might get a better response if they look less self oriented.
"do what I want/need, not just for me you understand, but for the community"
Re: Don't Offer a Free Plan
#108I would say that statement is incorrect. In many ways it depends on your SAAS product's economy.
Having free users have it's own benefits:
1) You can consider them as beta-testers as they will help you find issues with product faster
2) The most critical users frequently covert to evangelists if you listen to them (considering their "demands" are reasonable) 2.1) It's really useful to have active community around your product for different reasons. And it might be hard to do with corporate users for example :)
3) Access doesn't have to be completely free. You can make them hoop through some loops - sharing about SAAS on social networks, inviting friends and so on.
4) Frequently you can actually convert a decent amount of free users with good discounts. Longer people use your service the higher is gonna be the conversion rate. In general discounts ain't a good solution, but a lot of people don't actually need your software - they see a good deal for some interesting product and buy it in reserve for the future. I think a lot of us been there with all deals on Steam, having hundreds of games in a library you haven't and probably won't play :)
5) Many users are actually ready to pay for some kind of support if it's not too expensive. But if you built a decent community around your product your free users can frequently get help they need on your forum or some board.
6) As others said frequently previous personal experience really helps with onboarding so there is a higher chance somebody gonna recommend it to their companies.
There are gonna be other benefits as well too. Personally I have around 10 years in product marketing management and development in Russia and USA. And as some of our products were Shareware I must say the biggest problem in ex-USSR countries was always a huge amount of pirates, but from my experience if you play it right you can use even them as huge promotional channel.
P.S. Getting a good "PR" manager is a good thing too. Frequently you can contact people who are vocal and berating your product and just give them access to Premium features for free :) You won't receive money from them, but having less negative reviews will help your sales. Frequently they would appreciate the gesture and make favorable recommendations. (In many times people just are unhappy with something else in their lives, they just project negativity on your product cause they are in a bad place and getting a response from a real human means a lot to people - if it's not just some "sorry script" many customer support agents use).
Re: Don't Offer a Free Plan
#109The article misses the biggest reason to offer a free plan. If your competitor has one and you don't, they're the "default" that everyone uses, and nobody bothers looking at your product. Along the same lines, you're probably not entering a completely new business, so you need to give someone a reason to check out your product.
The intelligent free plans are the ones that offer some things for free, but they say "If you like what you get in the free plan, you can pay to get X" for some useful X. Evernote did it for years with their free plan. Evernote was THE notes app. Now that they don't really have a free plan any longer, but Notion does, it'll be interesting to see how it works out. But keep in mind that Evernote is an established company, not a startup looking for the first 10 paying customers.
Re: Don't Offer a Free Plan
#110Anecdata: 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.…
The examples of Trello and Jira are specifically problematic, because their history says otherwise: Jira built its considerable market share and brand awareness without a free plan of any kind, offering instead just a short-term trial license; I remember just a few years ago that the price of admission was thousands of dollars per server, and yet here it is. And Trello comes from the other direction, having been enti…
I read the "influencer" in original post as descriptive not prescriptive.
> the companies in question evidently don't value information, and have instead relied on personal hubris
Nothing in the post indicated hubris to me. "I have used this service before and can give you an estimation of how well it fits our usecase" is probably the best information about a service you can get. The alternative is to spend time and money to discover that yourself.