Do I release my Salesforce app for FREE or pay $2700 to charge $30 per month?
Salesforce charges $2,700 to list a paid app on its AppExchange ($2,700 one-time with $150 annually thereafter; $0 for a free app). I can sell my app outside of the AppExchange, but with severe limitations that inhibit my potential profits (I can't implement a subscription model). In addition to greater functionality, listing the app on the AppExchange would increase my users by getting (1) greater exposure to SFDC users and (2) more trust for being AppExchange-approved. I want to sell the app for ~$30 per month.
APP HISTORY -- I spent the last 9 months validating if people would pay for my Salesforce app (sfdatagenerator.com). From June until now, I had 5 one-time purchases of $99 each, with minimal marketing and selling. (By minimal marketing, I mean finding forums where people have asked for a product like mine and responded with a link to my website.) My existing users are generally very pleased with the product, despite it being new and a little buggy at times. In theory, I would only need 6 users per month to return an ROI on the $2700 listing fee.
BIG QUESTION -- Should I list the app for free to gain an existing user base, then switch to paid? - OR- Should I risk paying $2700 and hope the app does well enough to give a sufficient ROI?
Am I asking myself the right questions?
Cameron,
All this stuff depends on your personal goals. So take everything with a pinch of salt.
One question to ask is: how long will it take me to get to $2700 with a recurring licence model billed at $30/mo?
I modelled this out for you based on a 10% growth rate (assuming you convert all your current customers in month 1 and don't take any money out for yourself). You'd see an ROI in month 11. (Don't forget to factor in the $150 renewal in month 13 if you model this out any further)
That seems not too bad. However, if you've not grown a recurring licence model before, I'd advise you to take a little time to think about how you're going to market it. It can be tougher than you think to grow a licence revenue business.
That said, it doesn't seem like a huge leap. A lot of this depends on what your current resources and commitments are like though.
I hope that's helpful.
Very helpful. Thank you for your insights
List your app as Free with some restrictions on AppExchange ... Then ask people to pay you for full version inside your app
I would start with the free option to gain traction, and only then switch to paid after getting user feedback.
Thanks @Danbars. What would make you choose free over paid?
If you're not sure yet about your product's market fit, or how it would compete with other similar products, I don't see any downside to start for free. You can have a message like "free during beta, $30/month after official release"
This way you know that customers that you get during this period do think its worth $30 and are likely to convert later.
It will also give you some time to adjust the product and make it more attractive to users based on feedback.
Once you get confidence in your model and product you can invest the money with lower risk.
I'm not sure about your risk tolerances vs mine, but I'd guess that if $2700 feels seriously risky then your business might not be ready for that. There are conceivably businesses out there that look at $2700 and think "meh.. cost of doing business" and pay it without blinking.
Your estimated ARR sounds promising, though. Maybe having 10 promised purchases would change your thinking? Or would it be better to release a more limited thing for free to gain traction?
That's a good point, and I think I'm realizing that I'm really just afraid of failing. That's what is driving my risk-tolerance down.
I want to see an ROI on the time I spend too, and I'm worried that if I just barely break even, it's not enough to make my time spent worthwhile.
That's completely reasonable! You shouldn't have to bet the farm just to try something out and see if it works.
No paid, never again. SF is asking 2700 to simply publish it, then 150 a year, and 15% from each purchase. All this would fine if it works and you can make up for the cost and for the resources employed for developing. Take in account 3 months waiting for security review to complete, and platform changes that might come along during this time. Only if you are part of a big organization which might consider publishing on AppExchange as part of a much large marketing project, then AppExchange could make sense, it does not - ever - if you want to get earnings out of it.
Here is my experience in releasing an app to AppExchange. I released a paid app on the AppExchange in 2016 (https://appexchange.salesforce.com/listingDetail?listingId=a0N3A00000DqDTIUA3). I priced it at $2700 / org / year model. Customers wouldn't need to worry about how many user license they had to purchase. I was able to break even after the first two customers and make a profit after the third. As a saleforce customer for many years and a sales force developer at my day job, my opion is most customers don't want to pay more for a very expensive SaaS product. I was hoping the per org model would be better, but I would still get the same feedback. You also have to share 15% of your sales with sales force if you sell the app through the AppExchange. You also have to compete with Sales force themselves. My product offers custom file attachment solution in sales force, but around that time SF release Salesforce Files. Not exactly similar but why pay for extra when you are already have similar features supported natively.
Not being terribly familiar with the SalesForce ecosystem: how does a $30 add-on compare to what companies are already paying for SalesForce and/or other similarly features addons?
It's not out of line at all for Salesforce. Some add ons go up to hundreds of dollars a month.
I was actually wondering of $30 would be on the low side...
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I'm not sure G Suite would work this app, but I do have another G Suite app that I built that helps the user clean out their inbox. I never launched because I ran into issues with the review process that seemed like a huge barrier. Maybe we could chat about that.