We make an downloadable product [1] that over its lifetime has been sold as donationware, freemium and trial-based -- three of the main v...
We make an downloadable product [1] that over its lifetime has been sold as donationware, freemium and trial-based -- three of the main variants that shareware evolved into. Short answer: downloadable trial software is still viable... we're doubling revenue each year and supporting a team of 6. Donationware (product is free for life, occasionally nagged for money). Lesson's learned: 1) It's no way to live, but a good way to start, as the userbase was at it's most vocal with feedback back then, when we were trying to hit product/market fit (perhaps because 'donation ware' felt much more community-spirited). 2) I don't have exact conversion numbers, but I do remember being surprised by how much an individual donated ($1 was the minimum, $30 the average, $300 the max). I've read studies since that if someone is asked to name their own price, they'll be much more generous (the downside being not as many people will pay anything at all). We then tried freemium (features were restricted until people paid). Lesson's learnt: 1) Do freemium by resource constraints, not feature constraints (i.e. all features are available, but when you use X amount of data you have to pay). Because otherwise users just see a 'broken' product, and don't see the point in paying for something less-useful. 2) We also noticed that most people quit in the first two weeks, and almost everyone who didn't, paid. I.e. the 'free plan' was hardly used (related to the first point). Thus it was just a maintenance burden. Now we have a two week trial , and then you pay. Lesson's learnt: 1) Benchmarked against freemium, conversion increased 4% in real terms (and 20% in relative terms). Mostly because it nudged the small % of 'free plan' folks from above into buying. [1] www.activeinboxhq.com
Posted by andymitchell on Jul 6, 2015, 2:09 PM
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pricing (SaaS)
IMO it's a bit more nuanced than what the author portrays it as.
NewIn the UK Amazon have now raised the price of general shipping to be 2/3 the price of a months prime subscription.
Credit where credit is due, critics claiming "[Apple device] is too expensive for something that just does [basic function]" have been pr...
I like to buy music.
Meet K-Claw.
Fable is way too expensive for basic software stuff.
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We make an downloadable product [1] that over its lifetime has been sold as donationware, freemium and trial-based -- three of the main v...
We make an downloadable product [1] that over its lifetime has been sold as donationware, freemium and trial-based -- three of the main variants that shareware evolved into. Short answer: downloadable trial software is still viable... we're doubling revenue each year and supporting a team of 6. Donationware (product is free for life, occasionally nagged for money). Lesson's learned: 1) It's no way to live, but a good way to start, as the userbase was at it's most vocal with feedback back then, when we were trying to hit product/market fit (perhaps because 'donation ware' felt much more community-spirited). 2) I don't have exact conversion numbers, but I do remember being surprised by how much an individual donated ($1 was the minimum, $30 the average, $300 the max). I've read studies since that if someone is asked to name their own price, they'll be much more generous (the downside being not as many people will pay anything at all). We then tried freemium (features were restricted until people paid). Lesson's learnt: 1) Do freemium by resource constraints, not feature constraints (i.e. all features are available, but when you use X amount of data you have to pay). Because otherwise users just see a 'broken' product, and don't see the point in paying for something less-useful. 2) We also noticed that most people quit in the first two weeks, and almost everyone who didn't, paid. I.e. the 'free plan' was hardly used (related to the first point). Thus it was just a maintenance burden. Now we have a two week trial , and then you pay. Lesson's learnt: 1) Benchmarked against freemium, conversion increased 4% in real terms (and 20% in relative terms). Mostly because it nudged the small % of 'free plan' folks from above into buying. [1] www.activeinboxhq.com
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