Should I abandon Free/trial packages completely for a SaaS product?
I've been trying to find sweat spot with my SaaS pricing/offer. I already tried charging a lot and now I tried free package + paid addons.
And result has been poor:
- Addon pricing scheme seems to create negative reaction with some potential customers. (uncertainty about end price, not sure that free package is even worth it...)
- People that actually go with free package -- have very low activity and only one user converted to "premium" offer.
I'm considering dumping free/trial packages completely and just charge flat $9/m subscription fee.
Has anyone been through something similar? Any gotchas you've encoutered that you might want to give me heads up on?
Freemium or not Freemium is a difficult question. A lot of times it boils down to answering the question: "Will adding one user to the platform create more value for all users on the platform?" If the answer is yes, then you want as little friction to sign-up as possible and freemium is good. Otherwise the value is only achieved for a user, a team, etc. and you price all plans (no free plan). Maybe giving a 30-day trial if necessary.
The answer is always it depends.
How much does a free user cost you? In both resources and time.
How frequently do they convert?
Are they just marketing to others with word of mouth?
That's the problem, that with ~50 free customers I acquired only one converted into premium member.
Only 3 free customers are actively using it.
And I don't think that anyone did any lip service for my product (but to be frank, I have no way to know about it).
I try to engage with inactive users and some of them do answer (or give back feedback) -- but still not using the platform.
Based on my experience, Freemium should only be considered as a lead generation channel.
Most of your freemium users won't convert at all.
So charge them even $5/month.
That's exactly my experience, seems like free users and those that pay are completely different audience. I'm more afraid, that I'm pushing people that could pay towards free package (and losing a possible revenue).
I will try to gradually phase out free plan out of platform -- and just make it a dirt cheap package to start off.