Why Free Plans Don’t Work. If you're trying to grow your startup you've come to the right place.
Get my 170-page ebook on how to grow a startup and join thousands of self-funded entrepreneurs by subscribing to my newsletter at right. The following is a guest article by Ruben Gamez of Bidsketch. Not too long ago it seemed like every product I knew was offering some sort of free plan. The strategy was brilliant: get loads of people using your product and eventually turn them into paying customers.
Everywhere I looked there were stories of people making money hand over fist with this approach. When 37signals talked about giving something away for free as a marketing strategy, it made a lot of sense to me: “For us, Writeboard and Ta-da list are completely free apps that we use to get people on the path to using our other products. So when I launched Bidsketch — a SaaS based proposal application for designers — offering a free plan was a no-brainer in my book.
Early on, things were working out nicely. Before: After: Premium - Turbocharged Freemium Conversions. Turbocharged Freemium Conversions, Coming Summer 2012 Many Freemium app vendors are not converting as many free users to paid users as they would like. Our new service, Kachingle Premium (KP), bundles complementary apps at an irresistible price point, enabling KP app vendors and marketing partners to co-market their premium offerings to the aggregated free user bases of KP vendors.
Consequently, app vendors see increases in conversions, large increases in paying user bases, and revenue uplifts of 2x to 5x. We can demonstrate the revenue uplift with a very robust financial model. What makes this all work is our patent-pending, usage-based micropayment engine that we have had live for two years in the donation space. Below is a brief overview of the key 4 elements that make KP so efficient, compelling, and easy to use. Scobleizer (Robert Scoble) Interview of Fred and Cynthia The 4 Key Elements to Kachingle Premium Product Bundling. Going Freemium: One Year Later. On September 1st, 2009 we announced that MailChimp was going freemium.
On that day, we had 85,000 users. Now, slightly more than a year later, we have more than 450,000 users. We grew our user base five times in one year. Earlier this month, we actually doubled our freemium plan from 500 subscribers to 1,000 subscribers. So now, even more people can take advantage of MailChimp’s powerful email marketing and social features. Another thing that’s increased dramatically since going freemium is the number of lunches I’m invited to; seems entrepreneurs and VCs really want to "pick my brain" about how freemium is doing for us. See, I’ve heard a lot of discussion about MailChimp’s success with freemium, but it’s scary that people would want to model their companies around us. First, the stats. (5) Is freemium a stable economic model? Why.