Freemium vs Free Trial
“Freemium is like a Samurai sword: unless you’re a master at using it, you can cut your arm off.” - Rob Walling
Free plan gives you access to a paid plan for a limited amount of time.
Freemium gives you complete access to a tier of the product.
Freemium works well in the following case:
- Large addressable market (i.e. People who listen to music)
- Low cost to service each user
- Easy for users to start with your product and get value out of it
Our product has no such dynamics.
Questions to ask when considering freemium?
1. Cost to maintain a large segment of free users?
2. Can we proivde enough value, but still limit value to entice for a paying subscription?
3. How difficult is it to get started with the product?
4. How will we nurture freemium users that are ready to purchase?
5. Are we attracting the right kind of customers?
Freemium works extrememely well for companies like Calendly, where their freemium base creates a network effect. In most cases, it does not work well for b2b companies
Free Trial works well in the following cases:
- No friction
- Adds to the trust factor (? not sure what they mean by that, seems fluffy)
- Avoid accidental billings (reducing headaches)
Optin Free Trials vs Opt-Out
Do you require credit card details before giving access to the free trial?
In one case, you need to opt-out (Hunter, Lawdepot, etc.)
It doesn't make sense for me to put forward an Opt-Out model, because:
- We will have to manage unsubscriptions at scale
- Creates friction upfront for our user
This is clear for us: We are not going to ask for payment infos upfront
Yearly: 30% off.
Why? Given the high potential churn rate of our product, I think securing a client for a year is well worth 30%. We have to be careful on this because if we have an acquisition cost of 30% and a yearly cut of 30% we end up with 40% margin, excluding support and server costs.
View Google Sheets inBeat Marketing Master Doc for a breakdown
Plan #1 | Small e-commerce brands
49$/month | Free trial is limited to this plan
We're going to give export credits in our free trial. Limit the number of page viewed.
The scale at which someone conducts influencer marketing at the small scale allows him to go find influencers manually.
This makes limiting extraction limits the fall in love moment we want to build with higher tiered campaign.
Limiting our number of pages seems more adeqaute on our free trial.
When the user signs-up to the free trial, he will have the same walkthrough as anyone else.
Plan #2 | Agencies and bigger e-commerce brands
Plan #3 | Bigger agencies
Examples of company pricing
In this model, we price our client based on the value we provide them. We must ask what levers can we pull to make our value proposition higher. In v1, the only lever we have is number of exports.