Freemium: Valuable insights from the trenches
Just listened to a podcast episode with Hiten Shah and Patrick Campbell (their new show, Tradeoffs) about the ins and outs of the freemium model. Both have plenty of real-world experience, and share some good insights. There are several gems in there.
I really enjoyed it, so I f
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That was a really good episode!
I've saved it to listen to it again. 👍
Yeah, it was really good! I have a ton of respect for those two.
I used to work for a SaaS company where freemium was a vital part of the growth strategy for years. It's interesting to see those same considerations and dynamics have pretty much stayed the same.
I like how Patrick said that he thinks Freemium is the model of the future.
Time will tell.
How are you enjoying the TradeOffs show?
Regarding the freemium model, while I think it can often be amazing for many kinds of products, as small teams or even solo founders (heyoo, that's me!), there are challenges with this approach. You really need to think hard about how to minimize overhead if you're going to do it.
I agree. You have to think long and hard about freemium. Patrick mentioned in this last episode that it's more of a long-term play.
I wouldn't recommend starting with freemium if you're a small team or on your own.
This is the first episode I've listened to. I liked the focused conciseness of it.
Going to go through the other episodes later this week. There are only a total of 4 episodes, I think? Have you listened to them?
You're right -- there are only 4 episodes.
I got to listen to the first one before it was released to the public and was able to give feedback (very exciting!)
I really like listening because it gives me such a different perspective which pushes my own thinking.
Thanks @ptrei , enjoyed this episode a lot.
@AnitaToth you recommend not starting with freemium if you're a small team or on your own.. What do you think of a mixed model, where the startup offers free access for a limited period of time, then branches into a Paid or Free model?
For example, I currently work at a SaaS company that offers a free 15-day trial of the paid (premium) plan. We do this because we want people to be able to experience all of the premium integrations in real time.
There's no doubt that freemium has helped with acquisition. It gives people the time and freedom to determine whether the product is a good fit. A lot of people churn during or at the end of the trial, but our premium subscriptions continue to grow at a significant rate each month, so we are doing well overall.
People think that free doesn't pay, but it can if free users end up promoting your app. For example, our free plan includes a limited but generous feature set. A lot of people stay with us for the free plan and continue using it for years. Our app is a scheduling solution for meetings and appointments, so free users are constantly sharing booking links with their clients.
Free users keep our branding on their booking page (a small banner in the corner of the app with a link to our site) which ends up working as a viral marketing component for us. So free users attract new users, some of whom subscribe.
This model works off the principle that new visitors want gifts and clear benefits in exchange for their participation in an app or service. Unless you've absolutely nailed a niche that needs your services, and you have the authority to deliver a solution, a free + paid option seems like a good way to acquire and retain as many people as possible, while growing a revenue stream simultaneously.
Congrats on a growing product. :)
Sounds to me like you have a great product for freemium. In addition to being an acquisition channel, freemium can be considered marketing, a way of amplifying word of mouth (as you pointed out). Anything with a viral component (like your product seems to have) can benefit greatly from this. That said, you need to have the resources to support those users. If you do, then that's a-ok, IMO. :)
It's hard getting users, so getting them to stay with a free tier after their regular free trial sounds like a solid strategy. Just make sure new trial users are aware in advance of how this works, or they might not feel entirely happy about being signed up for your product "regardless".
Are you advertising the free tier on your pricing page? I could imagine there are people wanting to sign up for that directly with the intent of not checking out the paid version until later.
Exactly, the freemium model can be great if it helps with marketing. That being said, not all SaaS products are shareable and so it may be difficult to leverage that mechanism in other scenarios.
Regarding your question about our pricing page, you're welcome to have a look here: https://www.appointlet.com/pricing/
We let people just sign up via the home page without making a big deal about free vs premium, though we do make the distinction clear once you are in the app.
Ah, nice. You do state properly upfront how it works. I'm a big believer in the importance of setting expectations (and ideally then overdeliver, but that's another story).