As a SaaS company, you might be wondering why you should offer a freemium product versus a paid-only product. Here are a couple of good reasons.
First, off, you can get more users hooked on your product. Everyone likes free, and if users know they don’t have to commit to a paid plan, they are more likely to sign up to give it a try.
The key is to give just enough access so the user can start reaping the benefits. Start the paid plans at a stage where the user is too involved to want to stop using your product. Think of the scalability of your product and where a user needs to be to want to pay for your product, or what additional features you can offer to push them over the tipping point.
Second, you can get more media coverage. There are lots of bloggers that like to write about tools and applications. But they don’t necessarily want to pay for hundreds of them just to write about them.
By offering a free plan, bloggers who are interested in writing about your tool can do so freely. Even if they don’t become regular users, their readers might. And, if nothing else, it’s a great link building strategy.
For example, if you search for mentions of HootSuite (freemium product), you’ll find 10M results. If you search for Sendible (premium only competitor), you’ll find 160K results. Similarly, if you search for mentions of MailChimp (freemium product), you’ll find 10M results. If you search for Aweber (premium only competitor), you’ll find 718K results.
TIP: To make sure you get great media coverage, reach out to bloggers that write about products similar to yours. Let them know how your product is better than the other ones they’ve written about, how much their readers will love it, and that the blogger can use it for free all they want.
Third, you can get more word of mouth marketing exposure for your product. Send your free users a message via email or within your product that invites them to share a quick tweet or Facebook post about how much they love their free plan. Hopefully, they will be receiving so much value that they are happy to pay with a simple social share.
7 Great Examples of Freemium Products
Now that you know why you should consider offering a freemium product, here are a couple of examples of how other SAAS businesses do it and why their approach works.
Zapier
Zapier is a service that helps you automate tasks within a particular service or between different services. For example, you can have everyone who makes a purchase through your Shopify store added to your customer email list on MailChimp.
Zapier’s freemium approach is to let users start off with five zaps (automations) that can run up to 100 tasks per month for free.
Their freemium approach works by using their free plan to get people in the door to try out a few zaps. They know that once you have automated a few things in your business, you will have a hard time not automating even more things. Therefore, you will likely be upgrading to a paid account.
Another reason their free to paid plans work is because the next three levels of paid plans are only a little more expensive than the next. Therefore, you find yourself saying, “It’s only $20 more to get more zaps.”
Filament Flare
Flare is a social sharing tool from Filament that was made for blog owners. They offer an easy to install and customizable social sharing bar for your content.
Flare’s freemium approach is to give access to the lite version of their tool for free and to offer a Pro version for more advanced features.
Their freemium approach works their homepage draws you in for trying a free tool, and their landing page gets you excited about the Pro features of their tool. Businesses and large publishers will love the ability to customize the action labels and have a mobile social sharing toolbar.
Once you are ready to commit, you will find that those features you love are available in the Pro plan. Those that try out the free version will love it, but will miss the features that they were introduced to on the landing page. Hence, they will be moved towards the Pro plan.
MailChimp
MailChimp is an email marketing software platform that allows you to collect email list subscribers, send regular email updates, create autoresponder series, and automate your marketing.
MailChimp’s freemium approach is to allow users to have up an account with basic features with 2,000 subscribers and 12,000 emails per month for free. Pricing for more features starts at $10 per month, and pricing for more subscribers beyond the first 2,000 starts at $30 per month.
Their freemium approach works for two reasons. First, you can sign up for free, but a few features that you will likely want as an email marketer, including automation, are only offered to paid account subscribers.
Second, if you have ever set up an email list, you know that the last thing you want to do is switch to a different service. Switching means you have to change out all of your opt-in forms, get used to a new platform, set up your autoresponders and automations again, and export/import your subscribers. All of this takes time, and once you have 2,000 subscribers, you will just want to continue to grow more.
Google Penalty Checker
The Google Penalty Checker by Fruition is a simple tool that connects to your Google Analytics account and shows you the effects Google algorithm changes and penalties have had on your website, both positive and negative.
Fruition’s freemium approach is to allow you to sign up for free and connect up to two domains to see how they have been affected by Google updates.
Their freemium approach works because, once inside, you see how valuable their data can be at helping you determine what Google updates are affecting your organic search engine traffic. You will also find that the most recent three months worth of data is hidden behind a call to action to upgrade your account. This is how they hook you into a paid plan.
FreshBooks
FreshBooks is an invoicing software for freelancers and small businesses. You can also track expenses and manage projects with their platform.
FreshBook’s freemium approach is to allow you to see their software in action with one client and the basic featurs. Additional clients and features are offered in the paid plans.
Their approach works because most freelancers and small businesses do not have the time to try one platform to the next. If they like how it works for one client, they’ll commit to the paid plans to stick with what they know for the rest of their clients.
Dropbox
Dropbox, the popular cloud storage platform, offers a free plan for up to 2GB of space for backups and simple file sharing. The Pro plan for a significantly larger amount of space (1TB) is only $9.99 per month.
Dropbox’s freemium approach is to allow users to see how easy it is to backup and share their files using the Dropbox platform.
Their approach works because they allow you to backup from anywhere, including your mobile device. And anyone with photos and videos can tell you that 2GB of space will never be enough. At $9.99 per month, you really can’t go wrong.
HootSuite
HootSuite is a popular social media management tool. They offer free plans for individuals who want to manage up to three social profiles, and business plans for those who need more.
HootSuite’s freemium approach is to allow users to get to know the benefits of using their platform with enough access to their main features to know that they want access to more.
Their approach works because most social media users, even individuals, will have more than three social media profiles to manage. And with plans starting at $9.99, it’s easy to say yes to the upgrade.
What Freemium Products Have in Common
Aside from great free services and even better-paid services, what do most freemium products have in common? A great pricing and features table, as shown in the examples above.
It sounds simple, yet it is usually the key thing that helps users decide to try a freemium product as it shows the product is scalable for beginners to advanced users. Seeing the features that they are missing out on with the free plan also makes the decision to upgrade to a paid plan a no-brainer in most cases.
Follow these examples and others in your niche to ensure that your freemium product is ready to compete and win paid customers!
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Source: Forbes
