Should I do a free tier?
To free, or not to free, that is the question...
I am starting a community behind my new startup to increase socialization opportunities. The TAM is roughly 27M kids in the U.S.
Draft landing page is here: Lift Academy
I have set it up already with a basic membership at $7.99 and a premium membership at $19.99.
The important thing to know is that the primary value/marketing/message is for the Parent. Some is for the Child, but their needs are much simpler (make new friends, be bored less).
I can AFFORD to offer a free membership with basically none of the other benefits aside from Safe Buddy Matching, without crushing the model with extra costs.
The reasons AGAINST are:
-Each of those free users was a potential customer I might've paid for
-I'll need to keep the pressure on to convert them
-There is no "skin in the game" if they're a free tier user
-Going to wait longer before revenue comes in
-Less profit to share in the affiliate growth channel
-The upgrade path will be much harder once they're signed up, as they will have to ask their parents
-Removes some of the esteem of being a member if there is a free membership
-I am not sure what value the free members provide other than fuel in the beginning
The reasons FOR are:
-Could help me grow faster as it removes a price barrier
-They're potential customers for events and upgrades
So.. what are your thoughts here?
I'm going to be testing soon and getting in the conversion costs and acquisition costs on the lower tier membership. But this is something I have no experience with, so I thought I'd get some opinions!
Calling my #TheCommittal brain-trust...
@louisswiss, @helengriffinjr, @vimalin, @jpusateri, @Guidione_Machava, @natejcho, @DF_V, @davey, @VisionIsScary
@breedaddy, @janice
Free tier may be a good idea, but I'd be very ready to turn it off an on, or maybe introduce a wait list so you can gate them in batches as possible.
Done! Great idea
Dave,
Short answer Yes.
Longer answer:
I've been involved with online communities for 2 decades, started some, participated in others. So do have a bit of background on this part.
Looked at your site. Top right "Get Tested" -> sounds scary in COVID times... goes to the price table.
There's a wall of text, that's not inviting to become a member. The rules etc.. should be behind another menu option.
If you want members then they at least need to see what they get. There's ways to do that. A wall of text isn't it. You might be able to get away with a few blog posts and a video showing off what it is. But you don't have that community right now, so how can you show off something you don't have. It's a bit of a catch 22.
So in order to get the community to start you'll need something for free.
There's many ways to convert people over to a paying model once they are a member. You could even do something like first month for free or as you say limited features.
If you don't have any community members then it's hard to convert them as they don't know how to find you. Even if they find you, then they still don't know what you have on offer. There's no fun way to find out now.
Get people to come over and separate from their money immediately? Not an easy thing. Have them over for free, see they get value, then offer something even better for some money? A lot easier. Especially once you get their email address as you then have a way to contact them and let them know what other great thing they can get (here's where you can show some of that price tables etc..) Give it to them in easy digestable chunks. Remind them. etc...
The hardest part is to get a community to start. Once it's growing things do tend to get easier.
--
Wil
Thanks Wil. Wall of Text = Bad. Got it :)
I need to shift the home page probably to the member/community page and overhaul with benefits. This is a draft, and I'll use your notes to help me refine.
I should have mentioned, I founded the FB Game Developers group which just crested 30k members. It was organic, and provides very little value, but I enjoy it from time to time. But it's a super high organic search. I don't think I have that to work with here.
Thanks for taking the time to comment!!
Sorry didn't want to sound harsh.
I think you got a great thing going and with the current state of affairs you would want to move fast as the market is out there right now.
Not at all, I learn far more from harsh, it's how I'm wired. I've taken some of the things you said and maid some dramatic changes already. My "should have mentioned" was to give more context in case you thought of something else. Thanks again for your time taken and honest opinion, it's improved my offering already.
I'm in the opposite camp of @vimalin. And this post has me staying the course.
If you'd like to confirm, quick and early, that what you're building is valuable, then charge for it. If people aren't willing to pay for community now when it's in scarce supply and sorely missed, then they damn sure aren't going to pay for it after you've built a non-committal group of folk. @vimalin is right. It's hard to separate folks from their pocket book. Especially given the current context of economic uncertainty. But you'll have to make the ask sooner or later. I say ask now.
(Grinning) And why are you hanging onto that logo? Hit me up via email, I've a great logo designer that's quite reasonable.
I am going to go with a combined approach. I am going to offer a couple of the large groups I know a type of free account to seed the user-base and address the chicken-egg problem @vimalin pointed out. The first batch of users to sign up is going go need to wait for data to be available before the friend algorithm will match them up! They'll still need to input CC info, to comply with safety guidelines. That will be a private offer and flow which I will build ASAP.
Staggered VERY shortly afterwards I'll begin identifying my CAC via FB ads.
I took another stab at the logo and I'll def take you up on that soon!
No problem, I'm not claiming to be right all the time.
There's nothing wrong with trying the "charge for it fast" method first.
It all comes down to if the target group of prospects is able to find your product and realize that you have what they need. If you can do that without having to go with a free tier, then the better.
Hi @Davey, I think you should go with the free option for now. It will give you the opportunity to learn from your community and to know what they value the most.
Hey Dave,
We are considering the same thing! We have decided that being a free tool will be the best way to onboard customers. We decided that the value of having initial users and getting consistent feedback was worth the wait for some revenue. The only thing that we are worried about is the fact that since people may not be paying for the service, they will be too kind and nice in their feedback, unlike paying customers who will demand certain features (which gives us a lot more feedback than simple compliments from users who have it for free).
The one thing I do want to mention is that we are in a different space as we are a B2B SaaS company, so the microeconomic effects may be different based on your users.
Let us know what you decide!
I'd ask a few questions before deciding on free tier or not. Are there other competitors in the niche that offer a free service? If there are then I'd be more inclined to add one. If not then I would think it's best not too.
Another option is to have a very low priced tier instead of a free tier (think the price of a mobile app, rather than the price of SaaS). It gets people used to routine of paying and they are more likely to upgrade than someone who isn't paying anything.