October 26th 2010
Freemium is not a pricing strategy. Pricing part 10. Freemium is at best a tactic in a strategic plan. In the depths of my cold salesy (black) heart I abhor giving anything away for free. Real customers pay.
- Free users are not hot prospects
- Free users are not customers. (Repeat twice and rinse)
- Free sets your reference price to zero . You can not lower it, and heaven help you when you try to raise it.
- A start-up whose only product is free is seen as less. Less sustainable, less stable. Remember Xmarks? I know they are coming back, but with a premium product.
There are a host of ways to monetize your freemium “tactic’ . At last count I have a list of over 25 separate things you can do. This is one of the areas where RocketBuilders helps companies get revenue (increase value) where they only see a struggle. Here are a few ideas:
- Colligo has a free product download , read only – you pay to be able to write to it
- Freshbooks gives you a small free trial account, With any kind of growth you need to upgrade to paying for more users/more accounts. This also increases your lock in.
- Dropbox gives you a free cloud storage account. Its so useful that you quickly fill it, needing to pay to upgrade capacity.
- Flickr allows three free albums. Once you get lots of pics in there, keeping them organized requires an upgrade.
In the always pay model, remember Quicktax. You buy the Standard edition, work your way through the forms and aha you get a prompt, ” You need the upgraded small business/investor/professional version to get more help on saving more money on your taxes. Click here to enter your credit card number.” Voila the upgraded version is unlocked. Brilliant.
- MailChimp Do-It-Yourself Email Provider Reaches 500,000 Users (prweb.com)
- Going Freemium: One Year Later (mailchimp.com)
- Slideshare Is Going Freemium (mashable.com)
- Editor-in-Chief of Wired Magazine Promotes Freemium Business Model on Wix Website (pr.com)
- Free-for-All Web Marketing – Part 1 (jeffkorhan.com)
- Freemium business models for enterprise software? (dondodge.typepad.com)
- 6 characteristics of successful Freemiums (techvibes.com)
- Web Faceoff: Freemium vs. Ad Supported (mashable.com)
- The 3 Keys to Success with Freemium (startup-marketing.com)
- On Freemium (Again) (diversity.net.nz)
- More Social, Freemium Chatter Coming from Salesforce.com (thenextweb.com)
- Running Lean. Iterate from plan A to a plan that works. Ash Maurya.
- Training your customers for regular price increases. Pricing part 12
- Does finance still set your prices? Pricing panel part 7.
- Free. How today’s smartest businesses profit by giving something for nothing. Chris Anderson.
- Pricing survey indicates you are dropping prices, but for the right reasons? Part 1.