13
8 Comments

What do you think about free plans?

I used to think that free plans were unnecessary, but as I felt the power of word-of-mouth, I started leaning more towards giving away software for free. We launched a free plan with low limits at HockeyStack Analytics even though we targeted larger SaaS businesses. We later expanded the free plan to higher limits. Now we are thinking of starting a very generous startup program and even giving away 1-year free subscriptions to some of the larger businesses we are targeting.

Do you think this is a viable approach or am I missing something here? It seems like a relatively low-cost way of getting traction, but similar companies in our space are going the "contact sales"-only approach.

  1. 2

    Being a marketing advisor I would say that a free plan is vital for user acquisition.
    And the best practice is to turn your free users into your brand ambassadors so larger clients will count on and pay for bigger plans.

  2. 2

    Hi, @bgrgndzz!

    In my case, I offer a free 30-day trial or a demo version for Price2Spy. I think this is a good model because you can showcase the full (or limited, depending on what you want) functionality of your product, without allowing it to be used indefinitely without payment.

    I'm planning to do something similar for BotMeNot, where I'll let people do a certain amount of testing free of charge and if they want to keep doing it, then I'll start charging.

    Cheers!

  3. 2

    I think that if you've thought about it (which it sounds like you have), it can be a really viable approach.

    My #1 concern with free plans is they can cannabalise paid plans. In other words, if somebody can get value out of your free plan, why pay for a paid plan? The answer to that becomes "Give them a completely crippled version of the product", and your users end up so limited by the free plan's limitations it's frustrating!

    If you can manage that quandry, you'll be fine.

    Large companies do it because they have the resources to attend sales calls with prospects from Enterprise leads and can handle objections over calls more effectively on trials. If you're on IH, you probably don't plan to build a huge sales team... so I'd say play to your strengths and offer freemium, but also offer demos if you can.

  4. 1

    As an Indie Hacker, I love free plans as they allow me to start for free and pay as my business grows.
    This is why I also offer it myself.
    However, I do struggle converting free customers to paid plans so you need to think well about where to draw the line so the free tier will not canibalise the paid tiers.

  5. 1

    Hey Buğra, it looks like you've already started implementing free plans. What is your experience so far? It sounds like it's been working out for you otherwise you wouldn't be doing it.

  6. 1

    I prefer a free plan option because it helps to build the trust first.

    As a consumer, I don't have anything against paying for the tools that bring me the value. But in order to be sure it brings me the value, I need to explore it first. Free plans are perfect for that.

    That is why I decided to offer that in Localizely, having a Trial period - where new users can explore paid features for free, and having a Free plan once the Trial expires. Some users don't succeed to experience all they need during the Trial, and they could do that within the Free plan later.

  7. 1

    With you targeting large saas businesses this might be relevant to you. Spenser Skates of Amplitude had an AMA a few days ago on HN and this was his take: https://news.ycombinator.com/item?id=28700130.

    TL;DR people on the free tier can eventually become paying clients as they grow and start to fit the mould of your targeted clients. There's a few examples he gave as well where some of the clients on their free tier were acquired and introduced Amplitude to the companies that acquired them. Those companies are now paying clients.

    That whole AMA is a very interesting read.

  8. 1

    I am 100% for free , if I see a tool that does not offer a free trial I am thinking "what are they hiding" . I don't want to be sold to , give me the damn thing for free for a while and I will figure out if I will get value out of it.

  9. 2

    This comment was deleted 2 years ago.

Trending on Indie Hackers
How I grew a side project to 100k Unique Visitors in 7 days with 0 audience 49 comments Competing with Product Hunt: a month later 33 comments Why do you hate marketing? 28 comments My Top 20 Free Tools That I Use Everyday as an Indie Hacker 15 comments $15k revenues in <4 months as a solopreneur 14 comments Use Your Product 13 comments