I recently wrote a post tracking evolution of pricing plan of a company (Clicktale) over last 4 years. Even though they still have the free plan, the prices of individual plans increased 10x in four years: http://visualwebsiteoptimizer.com/split-testing-blog/how-pri...
Why Free Plans Don’t Work
11–20 of 118 posts
Re: Why Free Plans Don’t Work
#12Earlier quoted context omitted.
That's why you offer free trials. :)
So the real advice is: Offer free accounts and then get rid of them.
I wonder how well offering free accounts, getting rid of them and then grandfathering the free account users would work. How would the free users who have exclusive free accounts behave? Will they be more likely to promote your product (aka bragging) or would they be inclined to try to sell their account to someone?
Re: Why Free Plans Don’t Work
#13"... led to an 8x increase in paid conversions. Look at that again. That’s not 8%. That’s 800%." Technically, a 700% increase.
Good point, but he did say "increase". Perhaps he meant x+8x?
Re: Why Free Plans Don’t Work
#14I think you should use a free plan if actively using the 'free' plan will eventually force the user to go to a paid plan. e.g. dropbox. If you just give your core product away for free then users will only switch if they need the extra features of the paid plan. You can still use 'free' for marketing, because total conversion rates with a free plan will probably be higher, just don't expect these 'free' customers to…
I think you just persuaded me to double the quota on my free plan (non-recurring, pay-per-use plan)
Re: Why Free Plans Don’t Work
#15Yes, but would those companies have become popular if there hadn't been a free version in the beginning? Would as many invest in an unknown product in the beginning to eventually make it known?
This only works if the user base also evangelizes. Your model wouldn't work well if they say "Use BidSketch, its free and awesome!" and then they went there and it wasn't free, they wouldn't sign up for a paid account because their initial impression was they didn't need their wallet.
There are free/paid products that have been around for a fistful of years that people still accidentally stumble on.
Because we spend so much time on the web we think others watch whats happening all the time and catch our moves. From a marketing perspective, you have to tell the same story for 12-18 months before it becomes "common knowledge" and you need the right PR connections.
You could change your App's name and logo 10 times in 6 months and no one would really notice except for your users.
More simply put: most people don't know if a product is "known" or "unknown" - they simply decide if it does what they are looking for and make their decision based on that. You are not your user, something we developers tend to forget from time to time.
Re: Why Free Plans Don’t Work
#16I was just thinking this about Evernote the other day. I really want to pay them. They make a great product that serves me very well. I do believe they deserve my money. The problem is, the payed plan would be a complete waste for me. I don't need it. The free thing fulfills my needs perfectly. If it would be a 30 days trial, I would be a happily paying customer by now.
The same thing is true for dropbox for me. After the first month I was actively looking for a "donate" button on their website. I love the product, it works perfect, I would pay for it without thinking a second, I just have no need for the paid plan.
I understand the free plans are for marketing purposes. In my case I had more than 10 different choices for a note taking application, or a online backups system. The factor that pushed me towards Evernote and Dropbox were the consistent great reviews. Free was the cherry on top, but not the reason why I choose those two apps.
Re: Why Free Plans Don’t Work
#17Instead of saying that "free" plans don't work outright, I argue that they work for some type of products and don't work for other products.
He provided examples of niche products that so far, serve small markets. LessAccounting, Crazy Egg, - what is their user base numbers? One example he gives has a user base of 5,000 users. If you are a niche product, I don't think the free plan is ideal since you are serving a small market and need to build a user base before it makes sense.
Conversely, if you have an app that is going to get a really large user base, and I'm talking 'millions', then it probably will work (i.e. google, twitter, facebook, ect.). The example of those are far and few.
The other comment I would make is, maybe you aren't creating a compelling enough product to get a user demand that supports a 'freemium' biz model.
Re: Why Free Plans Don’t Work
#18Maybe he should also consider changing the text on the register button?
Re: Why Free Plans Don’t Work
#19Earlier quoted context omitted.
That's why you offer free trials. :)
So the real advice is: Offer free accounts and then get rid of them.
That was basically what I took away from the article. Start by offering free accounts until you gain some sort of traction and people become aware of your product, but once you start getting significant traffic stop with the free.
Re: Why Free Plans Don’t Work
#20I was just thinking this about Evernote the other day. I really want to pay them. They make a great product that serves me very well. I do believe they deserve my money. The problem is, the payed plan would be a complete waste for me. I don't need it. The free thing fulfills my needs perfectly. If it would be a 30 days trial, I would be a happily paying customer by now. The same thing is true for dropbox for me. Afte…
Why not buy the non-free plan for a week, then cancel? Or email them. They might use PayPal, perhaps you could transfer money in there if you know the right account.