Loading...
Answers
MenuHow should I decide which part of a freemium mobile app should be free?
Answers
Very interesting concept - I could see how parents would certainly gravitate towards a feature like this. So, freemium apps, models, features are quite common of course and people have grown accustomed to most applications or platforms at least offering a trial period (as you do.) But, if you were my client my first question I'd ask you is: do you need to even offer a free option? Typically a freemium model is offered as a means to maximize your "front of the funnel" conversion and use tools inside the platform to get people to continue utilizing the application (and thus expand into the paid services section.) You have 200 paying customers, why use freemiums at all? you know people will purchase and use your service. Why not consider say discounting or trial period pricing? from a product development standpoint it will be much easier on your engineering team to manage one product version, not to mention that you potentially diminish your service perspective by at any point offering it for free. Unless a direct competitor is out there and they are beating you because of the freemium model they offer I would strongly consider avoiding it altogether. your product, from what you described, sounds simply enough to understand as a concept (it is not a digital cure to cancer you are explaining): plus parents know the value of curating and protecting their children from salacious/inappropiate content, so why try to get them familiar with the idea? As long as it does what you say it does and they are able to fairly easily use it I say go full price, or at the very least avoid free features and just do a discounted trial period. People often underestimate how shocking moving users from free to paid can be and how it actually can be a liability (e.g. Netflix has never offered a freemium model - Hulu has though.) That being said, it is possible that a freemium model makes sense for your app, under the right circumstances and context. but before diving in I'd advise going through a quick exercise to make sure it is the right move. If it is, there are some pretty common themes and feature trends you can follow to reduce friction (many of which require specific demographic and psychographic information about your target users etc.) Feel free to reach out if you'd like to chat further directly and talk through your options/evaluation.
This is always the dilemma with freemium business model. To decide what to give free and what to charge. I like your idea about preset education channels only available. Also you can give top 5 for free and charge for adding extra. You also charge for saving or grouping functionalities. What you have right now is trial period but in freemium you have give something free. So preset is good idea. You can also give control 1 user for free and to control more users you have to pay this is of course if your app supports that feature.
There are two ways to do this: You can allow customers to control 2 channels for free and then if you want to more control, the customer pays. Another way is to start with 7 days free fully functioning but have an alert that tells them that you only get to keep 2 channels after the 7 day period is over. I'd be happy to speak with you in more detail on this.
Businesses are constantly searching for new ways to acquire new customers while also keeping costs down. With customers becoming savvier, and thus sceptical of traditional marketing tactics, this becomes an even bigger challenge. However, using a freemium acquisition model can reduce the cost required to acquire new customers by shifting the education burden from your sales and marketing teams to the customer. The freemium model creates a natural lead nurturing process that offers users the opportunity to discover your product and its capabilities on their own. After achieving success with your product, free tier users will eventually reach the limits of the free-level account and decide to invest in a premium account in order to gain access to the full set of features and value that your product provides. By limiting access or usage in your product, you create friction for free users, which encourages them to upgrade to your premium tier.
So, when B2B companies implement a freemium acquisition model, it involves a more convoluted system of limitations. Users need more incentive to upgrade because of the complexity and high price associated with the product. Zapier is a web application that allows users to connect different digital tools together through sequences of automated triggers called “Zaps.” To boost account creations and give tentative users just a small taste of what the product is capable of, Zapier uses a freemium model that leverages all of the different types of limitations that you can place on a freemium product. This is a great strategy because the single-step Zap is a perfect way to give users a taste of how powerful the product is, while still leaving them wanting more. They also have gated app integrations that are only available to premium users. So, if users want to build Zaps to connect with tools like PayPal, Magento, or Facebook ads platform, they will need to upgrade to one of the premium tiers. In addition to gating certain features in their product, Zapier also places limits on the usage that users are allotted. This is an excellent example of how complex and expensive freemium products can take a very targeted and comprehensive approach to boost revenue by encouraging free users to upgrade to premium.
The app also lets users save music, create and share playlists, and discover new music. In the case of Spotify, the free plan lets users stream most albums, playlists, or curated radio stations on shuffle play, but they are served ads in between songs and users can't skip to specific songs they like. Conversely, the Premium plan level affords users a much deeper set of features for a richer experience. But free users still see a lot of the value of the product through the limited features.
Still, things like the inability to switch to a specific song on a playlist when listening constantly remind users of what they are missing out on by not going premium. Users in the free tier are only allotted four song skips every hour. This restriction is eliminated after upgrading to premium, allowing users to skip as many songs as they wish. Coupling this limitation with the fact that free users can only listen to playlists on shuffle adds up to a powerful incentive for any picky music listeners out there. Finally, as mentioned earlier, free users are served ads in between songs. Free users get a taste for the value of the product through the limited features, but the limitations create enough friction that anyone looking to become more than just a casual user will likely upgrade to remove the limitations. Evernote is a notetaking and organizing app that allows users to jot down notes in different “notebooks” across different devices for notetaking and writing on-the-go. Evernote Basic's features are fairly limited for users who want anything beyond the basic functionalities of a virtual notebook. Evernote Basic users can only get customer support through self-serve online forums, and they do not have access to collaborative notebooks or the ability to work offline in Evernote, among many other paid features. Evernote Basic only allows users to sync notes across two devices, vs. Freemium vs. Just like freemium, free trials are designed to lower the cost of acquisition by letting the product and on-boarding do the work of converting leads into customers.
Freemium, on the other hand, creates a pressure-free environment for new users to explore your product without being forced to make a purchase decision before they're ready. Freemium also allows your solution to scale in parallel with your users' needs. This makes it easy for your product to become integrated into your users' normal workflow, making the limits that you've placed on your free-level plan more effective because it is much more painful to switch to something else. They start by giving users two GB of free storage, and as users see the value and start adding more and more files to their Dropbox account, it becomes their new norm for storing and sharing electronic files. When users finally reach the 2 GB storage limit, it's will have become very hard to switch to a new solution and move all of these files somewhere else, so the user ends up paying for more storage instead. One of the best ways to grow a product quickly with extraordinarily little cost is to leverage word of mouth from current users, and freemium makes this extremely easy. So, even if your free users are not directly bringing in revenue for your business, they could still be helping you grow by referring your product to others in their network.
If users can get all of the value that they need from your free plan, there is obviously no incentive for them to upgrade to a paid account. You just need to make sure that you're leaving enough of a value gap to create friction for free users in order to encourage more upgrades. Get the best of both worlds by offering new users a full-featured free trial while still offering a limited free-forever plan at the end. You can see in the example above, TuneIn Radio offers free users a free trial for their Premium tier so that customers can experience the full functionality of the app.
Offering a free trial lets new users explore the full functionality of your product with no limitations. That means it is absolutely essential that your free users are able to quickly and easily discover the value of your product right when they sign up. This can significantly increase the likelihood that free users will upgrade to a paid account. Remind users to upgrade at every turn.
One important thing to keep in mind is that your users are real people, which means you cannot expect them to pick up on subtle encouragement to upgrade their account. Instead, you should find every excuse to remind users that they are on a limited plan and that they have the option to upgrade to a paid account with fewer restrictions.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Related Questions
-
iOS App: Beta vs Launch Quietly?
I would suggest launching in a foreign app store only (ex: Canada). That will allow you to get more organic users to continue iterating without a big push. I got this idea from Matt Brezina (Founder of Sincerely, previously Xobni) https://clarity.fm/brezina - he's the man when it comes to testing & iterating mobile apps.DM
-
Pre-seed / seed funding for a community app... valuation and how much to take from investors?
To answer your questions: 1) Mobile companies at your stage usually raise angel funding at a valuation equivalent of $5,000,000 for US based companies and $4,000,000 to $4,500,000 for Canadian companies. 2) The valuation is a function of how much you raise against that valuation. For instance, selling $50,000 at $5,000,000 means you are selling debt that will convert into shares equal to roughly 1% of your company. 3) I would encourage you to check out my other answers that I've recently written that talk in detail about what to raise and when to raise. Given that you've now launched and your launch is "quiet", most seed investors are going to want to see substantial traction before investing. It's best for you to raise this money on a convertible note instead of actually selling equity, especially if you are intending on raising $50,000 - $100,000. Happy to schedule a call with you to provide more specifics and encourage you to read through the answers I've provided re fundraising advice to early-stage companies as well.TW
-
If I am planning to launch a mobile app, do I need to register as a company before the launch?
I developed and published mobile apps as an individual for several years, and only formed a corporation later as things grew and it made sense. As far as Apple's App Store and Google Play are concerned, you can register as an individual developer without having a corporation. I'd be happy to help further over a call if you have any additional questions. Best of luck with your mobile app!AM
-
What is the generally agreed upon "good" DAU/MAU for mobile apps?
You are right that the range is wide. You need to figure what are good values to have for your category. Also, you can focus on the trend (is your DAU/MAU increasing vs decreasing after you make changes) even if benchmarking is tough. Unless your app is adding a huge number of users every day (which can skew DAU/MAU), you can trust the ratio as a good indication of how engaged your users are. For games, DAU/MAU of ~20-30% is considered to be pretty good. For social apps, like a messenger app, a successful one would have a DAU/MAU closer to 50%. In general most apps struggle to get to DAU/MAU of 20% or more. Make sure you have the right definition of who is an active user for your app, and get a good sense of what % of users are actually using your app every day. Happy to discuss what is a good benchmark for your specific app depending on what it does.SG
-
I've been working on an app concept for 6 months and built an MVP. Is it better to pay a development firm to build or hire a developer as a cofounder?
I have built two software companies by hiring out the development work. I sold one for a decent sum during the dot com era (circa 1999). I remain a shareholder in the other one. I currently work with amazing development company on behalf of one of my clients. Here are some things to consider. 1. Do you really want to give up equity? If not outsource. 2. How fast do you want to get to market? If sooner than later, outsource. 3. How capitalized are you? If undercapitalized, either outsource offshore (which runs about 20% of US rates), or bring on an equity development partner. I offer a free call to first time clients. Let's chat and I'll give you some great advice from three decades of experience. Just use this link to schedule the free call: https://clarity.fm/kevinmccarthy/FreeConsult Best regards, Kevin McCarthy Www.kevinmccarthy.comKM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.