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Freemium business model pricing

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Re: Freemium business model pricing

#11

Post by mattfrench »

ahoyhere wrote: post #9
stevenwei wrote: post #6

Earlier quoted context omitted.

I noticed that you guys have a free plan. Is that a significant percentage of your user base? It's a little bit hidden and I didn't see it at first (which I guess is the point).

You're asking the wrong questions :) Is it a significant portion of accounts? Yes. There are thousands of free accounts and about 600 paying. But do people who actually use their free accounts stay free? No, at an overwhelming rate, they upgrade. Something like 30-50% of all free accounts with more than 5 time entries upgrade. Most free accounts are drive-bys or people who are merely curious. I'm also looking into wa…

ahoyhere, thanks for the insight. I am working on pricing for our startup right now. We serve different markets, but I found your pricing structure interesting, that is why I used it as an example. Is there something to be said for offering a very cheap package instead of free (similar to the Chompstack pricing)? Have you guys tried that at Freckle?

Re: Freemium business model pricing

#12

Post by ahoyhere »

mattfrench wrote: post #11
ahoyhere wrote: post #9

Earlier quoted context omitted.

You're asking the wrong questions :) Is it a significant portion of accounts? Yes. There are thousands of free accounts and about 600 paying. But do people who actually use their free accounts stay free? No, at an overwhelming rate, they upgrade. Something like 30-50% of all free accounts with more than 5 time entries upgrade. Most free accounts are drive-bys or people who are merely curious. I'm also looking into wa…

ahoyhere, thanks for the insight. I am working on pricing for our startup right now. We serve different markets, but I found your pricing structure interesting, that is why I used it as an example. Is there something to be said for offering a very cheap package instead of free (similar to the Chompstack pricing)? Have you guys tried that at Freckle?

Hi Matt, you're very welcome :)

Here's how I see the difference between us and Chompstack: there are no for-fun restaurants.

We have a free plan because...

1. some people are just drive-by gawkers, who will rarely sign up at all, and maybe one day if they actually need time tracking they'll come back.

2. some people refuse to give CC details until they've checked it out

3. because of the nature of the app/data, it costs us nothing in terms of resources to have a lot of free users - it's not like social network data or file storage - and we do not offer support to free users

4. for people who use time tracking for their business, the premium features (invoicing, many projects, multiple people) are huge benefits

That was the free part... for the "very cheap package" idea, we're working on a paid version of Freckle that has some premium features (multiple projects, etc) but not the ones to do with earning money (invoicing), that'll offer to non-hourly-billing productivity nuts for a lower price.

That's about as far as we'll go, though, I think :)

Re: Freemium business model pricing

#13

Post by ahoyhere »

kirvyteo wrote: post #10
ahoyhere wrote: post #9

Earlier quoted context omitted.

You're asking the wrong questions :) Is it a significant portion of accounts? Yes. There are thousands of free accounts and about 600 paying. But do people who actually use their free accounts stay free? No, at an overwhelming rate, they upgrade. Something like 30-50% of all free accounts with more than 5 time entries upgrade. Most free accounts are drive-bys or people who are merely curious. I'm also looking into wa…

Interesting! I am trying to work out the price plan for my startup as well. Can I ask if you got people signing up for paid accounts directly or they did the free plans first and convert later?

Lots sign up for the paid accounts directly.

We have a standard 3-6% monthly conversion rate from free -> paid. But, if you look at it in detail, the numbers get more interesting:

About 17-25% of those each month have 5 or more time entries, which is our bar for an "active" account. (A low, sorta primitive bar, but still.)

Of those, 35-55% upgrade to paid :)

Thing is, unless you are in a very similar field with a similar interaction design quality / providing similar value, to people who "get" value for money, my experience on these points probably won't help you.

That's why our sign up page de-emphasizes the free plan regardless, it's just an easier route :)

Re: Freemium business model pricing

#14

Post by mattfrench »

ahoyhere wrote: post #12
mattfrench wrote: post #11

Earlier quoted context omitted.

ahoyhere, thanks for the insight. I am working on pricing for our startup right now. We serve different markets, but I found your pricing structure interesting, that is why I used it as an example. Is there something to be said for offering a very cheap package instead of free (similar to the Chompstack pricing)? Have you guys tried that at Freckle?

Hi Matt, you're very welcome :) Here's how I see the difference between us and Chompstack: there are no for-fun restaurants. We have a free plan because... 1. some people are just drive-by gawkers, who will rarely sign up at all, and maybe one day if they actually need time tracking they'll come back. 2. some people refuse to give CC details until they've checked it out 3. because of the nature of the app/data, it co…

Ahoyhere,

I have learned more about pricing stuff from you than I hoped! Thanks for the valuable insight. I have one more question that does not apply to you and Freckle directly now, but I was wondering if you could share some thoughts on it anyway. Before launching a product, how important is it to have a marketing page visible on our website?

Re: Freemium business model pricing

#15

Post by ahoyhere »

mattfrench wrote: post #14
ahoyhere wrote: post #12

Earlier quoted context omitted.

Hi Matt, you're very welcome :) Here's how I see the difference between us and Chompstack: there are no for-fun restaurants. We have a free plan because... 1. some people are just drive-by gawkers, who will rarely sign up at all, and maybe one day if they actually need time tracking they'll come back. 2. some people refuse to give CC details until they've checked it out 3. because of the nature of the app/data, it co…

Ahoyhere, I have learned more about pricing stuff from you than I hoped! Thanks for the valuable insight. I have one more question that does not apply to you and Freckle directly now, but I was wondering if you could share some thoughts on it anyway. Before launching a product, how important is it to have a marketing page visible on our website?

Definitely important. You want to start reaching out to your audience well before you launch, and collect their email addresses. That was part of how we got about $1000 of paying business right out of the gate. We're doing it again:

http://charmde.sk

I'm Amy, by the way. And I'm starting to write more about my biz/approach to biz @ http://unicornfree.com if you're interested :)

Re: Freemium business model pricing

#16

Post by mattfrench »

ahoyhere wrote: post #15
mattfrench wrote: post #14

Earlier quoted context omitted.

Ahoyhere, I have learned more about pricing stuff from you than I hoped! Thanks for the valuable insight. I have one more question that does not apply to you and Freckle directly now, but I was wondering if you could share some thoughts on it anyway. Before launching a product, how important is it to have a marketing page visible on our website?

Definitely important. You want to start reaching out to your audience well before you launch, and collect their email addresses. That was part of how we got about $1000 of paying business right out of the gate. We're doing it again: http://charmde.sk I'm Amy, by the way. And I'm starting to write more about my biz/approach to biz @ http://unicornfree.com if you're interested :)

Love the design of both Freckle and Charde.sk. Thanks for the help. As a young and first time entrepreneur, I like to think I know the answers, but most of the time it is not the case. Finding out what is needed from a strategic standpoint is something that I have found others are willing to share, especially bootstrapped, product based startups. I will definitely be checking out your blog at unicornfree.com! My name is Matt :)
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