Software as a Service June 29, 2020

How important is it to offer a free plan?

JamieO

Trying to decide if it's worth adding a free plan to DevInsight.

As a consumer, are you more likely to sign up and try a service that offers a free plan?

As a maker, do you get value from offering a free plan? More value than a time limited free trial?

  1. 2

    Personally, I'd be very hesitant to add a free plan for DevInsight. It can really be a "false hope" metric that has you chasing top of the funnel marketing. But I don't think it's a make or break decision either way.

    1. 1

      Definitely want to avoid those vanity metrics! I think the free plan might be overkill when I can add a decent free trial that showcases all of the features. But I think you're right about it not being make or break.

      The key right now is getting enough people using the software and providing feedback so I can make sure it's on the right track.

  2. 2

    List the top five reasons why potential customers don't buy your product. If you can get two of those five cleared with a free trial or free version of your product, then yes offer a freemium model.

    People feel shy to try a new way of doing something, so you have to take necessary steps in reducing the risk involved in the process.

    Freemium is not a permanent management style, you can adapt with time and change your strategy as you grow.

    1. 1

      "Freemium is not a permanent management style" is great, thanks for that. It is sometimes easy to forget that everything is quickly and easily changable.

  3. 2

    I don't know if a free plan is always required, but some way for me (as the potential customer) to figure out if this product is going to get me the value I'm looking for. Maybe that's a free plan, though usually the features are so crippled it's not worth my time. I actually find that I prefer a free trial of a full plan.

    Calendly is the most recent example of a tool where this was true. I used the free trial of the top plan, it was everything I wanted, so I'm now a paying customer at that tier. Important: they didn't ask me for my credit card before I started the trial. If they did, I probably wouldn't have signed up.

    1. 1

      Thanks for the feedback. Sounds like it's a careful balancing act to make sure if you do have a free plan that it offers enough functionality to be useful.

      Good point about the credit card requirement, I'm currently thinking about removing that from the signup.

  4. 2

    I reckon in some cases having a free plans allows potential customers to stick along for longer.

    If you offer a time-limited plan, maybe it's not enough for them to figure it out, or decide they really need it. By having some free plan to have them on the platform allows you to keep them around for possible purchasing a full plan.

    Just my 5c.

    1. 1

      My thought with adding a free plan is that because DevInsight is quite complicated, it might not be immediately obvious what the value is to you, so a free plan gives that value and eventually you'll want to upgrade for more value.

      But perhaps if I can get across the value to users by a clearer landing page then a free plan is not needed. Thanks for your feedback

      1. 1

        I actually believe giving people the time to hang around is a better way in most cases. Noone reads landing pages, no matter how well-thought they are, and most people would just prefer pressing buttons.

        So I think @andrewgassen is on the point here, having either a good free plan, or a free time-limited trial of the fullest plan is a good way to go.

  5. 1

    Here are my insights on Free plan and Free trail:

    1. Free plan - Also called a Freemium model. I would suggest having this when you have many features to offer. Basic features that are offered free will keep your customers around. As they scale, you will have a chance that this customer may upgrade their plan.
    2. Free trail - Have this feature when you have limited features to offer. The downside of this plan is that people tend to move away from your platform after the trial period ends. In my experience, the churn rate is high in this model.

    We have our platform berlocks.com that offers a free trial plan to our customers and we have experienced churn rate after the trial period expires.
    I would recommend having a free plan.

    What category of the 2 points mentioned above does your business fall into?

  6. 1

    I will be adding a free plan for my product, but it is going to be very basic. Showing the available features, but disabled for the free pack. So the user can get a glimpse of what he gets if he upgrades.

    I don't know if this is the best approach, but I'm gonna try it out.