In a world dominated by free services, I find myself increasingly embracing the “mium” part of freemium by happily paying for more services.
Dropbox, Skype, Freshbooks, Performancing and Vimeo have become part of my premium portfolio, and I suspect there will be several others in the near future. (Note: Another product that I use on a regular basis is Connected. It was a paid product that went free after Connect was purchased by LinkedIn. If LinkedIn decided to offer a premium version, it would probably be something I’d seriously explore)
Why?
These services have become must-have components of my professional and personal life. I get so much value and utility that upgrading from free to paid makes complete sense.
It’s an interesting shift in direction because I love a free lunch – and free service – as much as the next guy but free only gets you so much. If you want more, it makes sense to pay for it.
At the same time, I’ve embraced the idea of paying for a service because it means the company that’s offering it has a way to support the service and develop new features. I also like supporting entrepreneurs if they provide a good service that meets a specific need.
What’s interesting is that in the scheme of things, these premium services cost about $50/month in total. Compared with my wireless, cable and broadband bills, this is a relatively modest amount for services that deliver great value.
While most people will stick with free services, I’m hoping premium services become a more attractive option. The expectation of getting something for nothing makes sense to a certain point but it is a difficult business proposition to sustain unless a company can attract enough traffic to attracting advertising.
In contrast, a company that can get even a modest amount of people to pay for a service can create a viable business.
As I work with more startups, I’m encouraged to see how many of them are focused on selling services while offering a no-frills free service or not offering a free service at all. Having paying customers can give a startup traction from a brand awareness, financial and investment perspective.
While most people will use free services, my enthusiasm for paid services goes against the grain but in a growing number of cases, it feels like the right thing to do.
Freemium is an art as well as a science. I have a mixed opinion on this actually. My company offers a free plan, but I’m actually considering whether I stop or continue. The fact is that most free accounts are for people that doesn’t really use it. So it’s not far from a waste of resources. Those who find value into our tool don’t hesitate to pay the day their free trial expire. Plus, most of them ignore the cheaper pro account to get the more expensive premium account.
I guess I have to see it from a marketing point of view. I mean, normally, people would use the free plan. But in our case, they don’t. So we keep the free plan mostly to keep a hook on potential paying customers. But I’m not sure it’s a good idea as if they don’t use the free plan now, why would they pay in the future?
In short, freemium is a strategy that is not suited for everyone.
Stephen: I agree that free forever is a strange value proposition. At some point (15 days, 30 days?), users need to decide whether a service has enough value to pay for. Thanks for the comment. Mark
Add Expensify and Evernote to your list of web apps worth way more than their cost.