Free Trial vs. Loss Leader
Hey fellow Indie Hackers, I have a conundrum.
My company, Snapbar, just launched Studio, a professional headshots platform, on Product Hunt today. Link to PH if interested.
Here's my problem: I want to grow our product adoption (it's good but could be better).
So far we have two strategies, one of which we just implemented today with the Product Hunt launch and another that we're considering for the future. I need help determining which route to invest in.
Option 1: Loss Leader (or corporate baiting as I like to call it)
Big idea: Snapbar will offer free headshots to individuals (this is what our Product Hunt listing helped announce). This will, in theory, earn their support and ultimately result in moving up search rankings because we can become the go-to company for free headshots online. Then, because Studio is also built for teams at organizations of all kinds, our target clients will buy from us because the features they can unlock by paying for it for their company are compelling enough...
Option 2: Free Trial
Big idea: Snapbar eventually charges for individual headshots but offers a free two week trial (of the team version) that includes a small amount of headshot credits. Assuming our product is good enough, many companies will stick with the product and become paying customers while individuals still have a relatively affordable option with the non-team version.
The truth is, both ideas seem like they'd work, but both also feel risky as currently all our corporate clients pay $200 for a two week trial...
Am I being dumb? We're bootstrapped, so cash tends to be king for us, but should I just open up the floodgates and get users however I can?
Are there any obvious pitfalls I'm missing?
I'm a little confused by your terminology.
I've never heard the term "Corporate baiting" before, but sounds similar to the "loss leader" concept. A free trial is also not a true "freemium" play.
My understanding of freemium is having a free plan with set usage limits.
So consider getting rid of the time constraints (ie: 2 weeks) and just stick with the credits?
Maybe that's just semantics, but that's how I think about it.
Yeah, those are great points. I guess loss leader would be the best term for it, though because the target users were different, it didn't click right away that loss leader is how most people would see it. Thanks for that clarification.
As for 'freemium', that's another good point...editing the title of the post!
The paid individual headshots could make up for small loss in trail revenue ($200/company) and easier allow you to capitalize on the extreme value in onboarding companies onto the platform. This gets decision makers first-hand experience with the product and product is king. A great product will sell itself.
I like that idea of supplementing the loss of $200 with rev from the individual headshots. We've had limited feedback so far, but a few users did say they'd pay the $15 or so if we start charging that long term.
Loss leader if you have cash reserves to spare while you're getting those extra clients. Free trial if you're more strapped for cash and you want to give clients a "taste" of the value they can get.
Both have worked on me :)
I like the idea of a free trial, as you get to experience whether a product you've never used would work for your team, without committing to anything. If you have a good product, most people will end up paying. If they don't, they may be the type of customers to complain and want a refund anyway.
Yeah, I guess that makes more sense. It's work upfront as the product isn't SaaS and requires some investment of time upfront, but probably worth the experiment to see how often we close a deal.