Some traction but no product/market fit yet – what would you do?
Hey folks, we've built a complaint resolution platform with a freemium model.
We've got some of the biggest companies in the U.S. (Fortune 20) using our product on a daily basis so we can use that as social proof.
However, but we don't have a lot of paying customers. We're struggling to convert freemium users into paying customers and I am looking for ideas.
Here's how our product works:
-
Consumers file public complaints on nonono.com
-
We deliver complaints to businesses. Businesses have a fair opportunity to respond before they get rated: consumers are only able to rate the outcome of the resolution after an interaction with the company.
-
Businesses avoid negative reviews. Instead, they get excellent resolution reviews that build trust and improve online reputation.
See Houzz case example here: http://bit.ly/2KYaIG5 (just one slide)
One of the challenges for us is that it's difficult to determine who should we talk to (Head of Customer Support or Marketing or Customer Experience or maybe the head of growth) and figuring out what is the best working value proposition.
I know the best way to tackle this is just to talk to our potential customers but I was also hoping to get some constructive feedback here.
Thanks in advance!
P.S. I love brutally honest feedback.
I don't really like freemium, if your product provides value then people should pay for it. If they don't want to pay now they won't pay you later either.
I'd recommend switching to a subscription model, especially since youre b2b. If people are hesitant you can offer sth like 30 day money back.
Thanks jsco!
I agree with you, at least to a certain extent.
However, the freemium approach has worked pretty well in the sense that we have some big companies using the product and offering feedback.
The problem is that there are no companies searching for a solution that we've built. We need to show the value first.
That said, maybe we could do a 3-month free trial instead of a freemium.
I like the money back suggestion.
Reminds me of a story I heard from the founder of the the first hotel booking/rating service. They were in a similar position to you, and all of the hotels basically just ignored their calls even though the hotels were happily using the service. So eventually they got frustrated and stopped trying to get "sales" until they had a bit more consumer traffic to work with as leverage.
Then they would call only the hotels who were already getting lots of traffic/bookings, which gave them real leverage in the sales conversation. And customers ended up paying to continue the service (which was already working provably well) instead of trying to convince them to pay before it was mission-critical.
(The way they actually arranged it was to simply turn off the highest volume hotel's traffic, and then wait to receive a phone call from them asking where all those wonderful leads had gone. They'd reply with something like, "You've exceeded the booking limit for our free hotel partners, but our premium partners get unlimited bookings through the platform. Based on your most recent numbers, that should be worth about $X00,000 per month.")
I can imagine you using a similar pattern, creating a fear of missing out on some important, unresolved customer issues once they're already seeing massive value and exceeding X,000 customer complaints per week (or whatever number makes them sit up and pay attention).
Doing this sort of thing breaks a lot of indiehacker best practice since you basically only get paid if you reach scale, but it's possible that that's just a constraint of the idea you've chosen. I'm not sure, but I think you probably need to build this particular product like a scalable startup instead of a bootstrapped one. But it's also very possible that I'm missing something (or am completely wrong about everything.)
In any case, good luck.
Rob, thanks for your thorough response. It gave me a lot to chew on.