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We're looking for advice and opinions on economic, effective ways to convert existing users from free to paid subscriptions. Our SaaS product is a slight twist to the traditional freemium model: "buyers" use the system for free and "require" their suppliers to enroll and conduct business with them; "suppliers" use the system (basic) for free, but can upgrade to a premium account for a nominal annual subscription fee. Our market research indicates that "supplier" users want the features available to premium subscribers, and our price is almost an order-of-magnitude lower than the competitors.

Our concern is: how do we quickly, effectively monetize our application? Is outsourcing lead generation an option, and if so, how should we get started with this? What about email campaigns, or webinars?

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Please post your site or tell us who the competitor is. You may get more specific answers. – JeffO Aug 17 '10 at 1:03

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up vote 1 down vote

Have a listen to this week in startups discussion with Phil Libin, the guy who started evernote.

Key points I got from it.

  1. In the first month 0.5% of people will pay, after 2 years 20% will pay.
  2. Most pay simply because they like the product and want it to continue.
  3. Some need the advanced features, in their case storing to many PDFs cost to much so they charged for it. The clients understood that and were fine with it.
  4. The free version should be the version you add the features to, premium features should actually be only those that apply to specific subsets of your market.
  5. Don't stick a whole bunch of features in premium and cripple the free, you will loose too many people through bad feelings.

So if you have the money to sustain it, this was their recommendation for getting a massive audience.

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up vote 0 down vote

You guys have good ideas, I don't know if there is any low hanging fruit you haven't already though of. But:

  • Set the feature set of Free so low that it is usable but rather painfully limited.
  • Offer Premium features for free for (30, 60, 90) days after account creation as an appetizer.
  • During trial periods / just after signup, send out "how to" emails and/or links to "how to" video tutorials that showcase how to get the most value out of your app (including relevant showcasing of Premium features).

I do think there is a tension between revenue from early stage customers and word of mouth referrals. Intuitively {good app, and it's free!} should get more word of mouth advertisement than {good app, but it also costs a pretty penny!}.

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