Is it just me or has the market really KILLED Freemium?
I am talking about Freemium software, the ones you could sign up for free, and use it for an unlimited amount of time until you would feel the need to pay for the upgraded version for more features or use of the service. Freemium is one of the best customer acquisition strategies.
I love the unlimited period and over time, I have converted to become a user of many of those services as my needs and requirements have grown. Over the past few months, I have signed up to a number of Apps and software services where after the first sign-up or download, I have decided to discontinue or delete the App or my account without even trying it.
For what it is worth, here are my main reasons:
A) The trial period of 7 to 14 days is extremely short. I honestly feel like it is not enough time for making an informed decision. I might be able to try and see if it is a good application or not, but I certainly won’t be able to see if it is useful enough in the long run or not. If I cannot establish what it is worth to me, how can I decide if the fee is reasonable and meets my budget and needs?
B) Additionally what puts me off immediately is that they ask for your credit card details. This is a trial period for 7 days, you can cancel if you don’t want to but if you don’t cancel we will automatically charge you. WHAT? This is not a trial. A trial is where I can decide afterward. This is almost taking it for granted that I want it but giving me the option to cancel if I don’t want to continue.
C) The Hassle. I am sure that most people who read this have at some point or another have had their credit cards charged for a service they forgot to cancel, or even worse the provider forgot to cancel or refund. This happened to us recently. We signed up to a service. First week of the trial, we need to change the domain name and they said the only way to do it was by setting up another account and that they will refund the first sign-up. After a month of trial, we decided to cancel the service. You can imagine my surprise when three months later, I realized they have been charging my credit card for both accounts.
I understand the need for monetization, getting rid of time wasters, and concentrating on paying clients, however, there is a fine line between fast sign-ups, growth, and monetization to using tactics that could end up losing you clients in the long run.
I really believe in keeping clients for the long run. I have kept this view for a long time. True, I am not half as rich as my competitors but I have converted clients over time, it costs me little to support and allow those who can’t pay for it yet or have not decided whether they need it or not.
Do you sell Apps or Software as a Service on the internet?
What is your pricing strategy?
Do you offer a Freemium service?
What is your Customer Acquisition Strategy?
I have helped many startups with their SaaS metric models and monetization and I believe unlimited Freemium is the best solution to grow your business:
A) It provides enough time for customers to make an informed decision.
B) It keeps your clients from going to competitors.
C) It helps them in their initial days of growth and builds loyalty.
D) You convert clients in the long run and come out the winner.