The Paywall Theory
Surprised there is nothing about this at all, but... after developing, learning, and releasing some of my products for free, not only does it attract the good, but also the bad. Maybe it's my programming or my scripts of not filtering out the bad, but I've come to this conclusion that: a paywall is guaranteed protection.
In almost all instances, even asking visitors and users of your product to give $1.00 or $5.00 seems to ward off almost everyone immediately. Is this necessary a bad thing? I'd rather have users who want to pay to use than users who see something for free -- and don't want to help support the product at all.
And to be honest, I'm okay with that. I build my products for me -- and share them with the world. Why waste my time building something for other people and hoping they will use it when I can just build it for me? And if they want to use it, go ahead, just help me pay for it and continue to support the product.
Thoughts?
From my experience, customers who want free/cheap products require more customer support and seem to ask for more features. On the other hand, higher-paying customers are usually more pleasant to deal with. It's really interesting.
The old adage that you get what you pay for really starts to filter some people out.
I think what you are seeing is that everyone has an opinion until they have to pay for it. Then it comes down to value for money. I'm not a fan of micro-economics in an IH business. If a customer is willing to pay you a dollar he or she's probably willing to give you $2. or $3. Or better yet, $36 up front for a year if it gives them something of value immediately in return. In a day and age where a bloody coffee can cost north of $10 (depending on what you get) if you solve a real pain point for a customer, that value should be paid for. And in return, they deserve something that just works.
Now for the crutch. That DOESN'T give them the ability to OWN you. The cost of support is a real COGS. You have to account for it. Which is why once they give you their hard earned money they deserve something back almost immediately in value so the next conversations via support are about product improvement... not making what's there work. You can't afford it... nor can they.
One of the reason I like B2B over B2C is that with material subscriptions (our average ARPU/ARPA is $499/month) gives us room to afford time with the customer. At $1 its impossible to have meaningful dialog that gets real returns for both parties. Support would eat away at profits. And I would have to have hundreds of thousands of customers which means I couldn't support them well if I wanted to.
I appreciate you build for you. But once you take people's money though, you build for THEM. The customer. It's an exchange for goods, and now both parties need to agree to deliverables and value. $1 may seem like you are filtering out... but honestly it may get costly as those that pay demand more. So you may as well increase it to something more material so you get something out of it. And at that small a fee, do it as ARR instead of MRR.... and hope they get enough value to renew. If not... and you have significant churn at least you got something of value to offset the time you will spend with them in communications.
YMMV. Get rid of the cheap bad people by delivering something that attracts valuable good people that drive your profitability so you can keep going. Even if its just 'ramen profitability'... at least you can eat (sort of).
Very well put. You've even given me an idea to increase my prices. Eventually, someone will come along, see the product, and really connect with it. Even from pricing my products cheaper than the average -- the clientele is just not worth dealing with at times.
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