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Bad idea to get a lot of publicity for a free beta version though when I'm planning to start charging for it eventually? [EDITED TO ADD: Will it hurt future paid sales?]

I have a software program that has been developed and is now in beta version. I'm giving it away for free off of my company's website (just to get users), and traffic is starting to pick up, with a few dozen users so far.

I have a big announcement on the website saying 'Send feedback and we'll send you a copy of the paid version once it's released, at no cost to you', but nobody has- I'm assuming that the product works OK, as I tested it extensively.

I have found a bunch of blogs and industry trade publications that would probably feature my program (as they review software targeted to my industry), and I would like to start publicizing it to get even more users.

I don't want people to think that it's not worth a cent, but I want a lot of users, since I figure extensive word of mouth is a good thing. I am fine with even just giving away the program rather than charging for it, if it would result in a high-level business deal at some point- surely someone would be able to monetize it.

Thanks.

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3 Answers

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I don't believe that building traction with beta customers using the product for free will hurt future sales. There are some highly niche with a very defined markets characterized by user group with a high degree of social cohesion markets where this would be the case, but my assumption is that you would have mentioned something that would have lead us to believe it was in that market if that was the case.

My "red flag" on what you said in your question is that you have solicited feedback, have not received any, and believe that the product works "ok" as you extensively tested it.

A product working in a controlled testing environment, and a product working in the field with real customers are two different things. One of the business requirements you are testing during the beta period is if the product is experienced by the customer to be of the value that you believe it should be. I would be very concerned that none of the beta users have expressed a direct desire to have the full paid version when it is released.

Based on your previous question, I am assuming that you have collected some type of information from at least a third of the beta users -- like an email, or a phone number. I would strongly recommend that the next step is reaching out, and asking, and listening to the experience of your current beta users.

I would also strongly recommend that your future distributions of your product would include basic contact information for you to communicate with the user. Unless you are in a "mass commercial market" where the expected conversion rates will be in the 2-3% range and driving up usage as quickly as possible is necessary, the "barrier" of adding contact information to receive a piece of free software is most often a "qualifier" of who has the potential of becoming a real customer.

And this very question is an example of why knowing them would be so valuable. They can answer it for you.

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Thanks. This is super-helpful. To add some more facts, slightly over 1/3 of the visitors to my website have downloaded the program I'm marketing. About 1 in 20 has downloaded it and provided contact info. I changed the site to say "please provide feedback and we'll give you the paid version of the program for free" late last week- no feedback yet, but it has been under a week. – user6492 Apr 26 '11 at 0:52
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Generally speaking, I don't think there's a problem with what you are trying to do. This is more or less how most software beta tests work. There are a couple of different factors at play here, though.

One thing to consider is the user's expectations. If it's not completely clear to people when they download that it's just a beta version, there may be some backlash after the test period ends. Will the software become disabled at a certain point in time, or how are you planning to handle things when the beta ends? The more severe or abrupt the transition from beta version to paid release, the worse people may feel about it.

Probably the easiest way to avoid this problem is by making a conscientious effort to manage their expectations—e.g., making it clear on your web site that the download is a limited-time beta version, requiring some sort of beta test agreement, etc. People don't normally take issue with a company's efforts to charge for software, and they generally appreciate the opportunity for trials and previews like this. What they do take issue with is bait and switch.

I think you're on the right track by offering the software for free in exchange for feedback. Keep in mind, participation rates in most beta tests are pretty low, sometimes as low as 25%. If you aren't actively trying to focus users on participating and giving feedback, it could be lower still. But if the beta testers have the opportunity to keep the software and use it free of charge in exchange for feedback, there's little reason for them to be upset when you start charging for it.

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Thanks. I have a message in huge font on the website saying "Beta Version- Free Download". The copy that people can download will last forever, which is fine by me. Will it hurt sales efforts in the future if people find out that the program was free, but costs $29 or so once it's for sale--will people be reluctant to pay for it if they find out that a prior version was free? Thanks again. – user6492 Apr 24 '11 at 21:51
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Beta testing shouldn't affect your sales. If you don't have some sort of cap on the number of beta installs, a significant portion of your target market downloads the beta, and it lasts forever once it's downloaded, are you cannibalizing potential sales? Sure. But you have the ability to control that. I don't think people judge a piece of software because you made it available for free during beta testing. They might consider themselves unlucky if they just missed out on the beta phase, but in theory, they're getting a better product because it was tested by those early adopters. – Adam Wright Apr 24 '11 at 22:27
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Why not offer the first 100 users - or 500 - whatever, a free premium account. Put a limit on the number of free accounts you plan to give out, so that you don't lose the perception of value.

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