What is the most optimal way to model your business launch in 2015 for rapid customer acquisition?
My startup has a 3 plan subscription model. It has privacy features with organizing and a bit of storage features. I'm concerned a free version might devalue the product value perception. Yet, in not offering a free version I turn away those without credit cards, lower user reach/market share. Also, it seems investors don't like it. Famous words of Mr. Cuban “You live by free. You die by free.” Is that still the case in 2015?
My indirect competitors offer a free version with a paid upgrade. I offer some features they dont offer as I'm targeting a 'slighly' different audience.
At my last SaaS company, we offered a free trial for 30 days to enterprise customers with some limited functionality and a freemium app to consumers. We didn't have any problem attracting investors using all three options because our business model showed the value and strategic benefit of each. However, every situation is different so you need to think through all the issues.
The one answer I am confident is that the pay only option is no longer an option. Even the most powerful software and SaaS companies in the world offer free trials.
While you need to consider many aspects of your business model to make this decision, I can offer a high-level opinion based on my experience. First, if your service can show financial benefit from data collected or analysis completed as a result of freemium subscriptions, then you will want to keep those users active even if they are receiving the service for free. But if you can't see any financial benefit from the data generated from the freemium users, then focus on the free trial. Keep in mind, depending on your product, there may still be enough cost savings to show the value of a freemium model.
My second part to this advice is to consider how you will implement customer success for a freemium versus free trial. Both offerings will need a way to help the customer successfully use your product and find the value. If your service is too complicated for someone to use when they have no investment in it, then a freemium doesn't make sense.
If you would like to discuss your specific situation, let's setup a call.
