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I have a web-based service that requires a paid subscription. In fact I have the following subscription levels:

  1. 3-day trial
  2. 1 month
  3. 1 year

In my personal opinion, the main value of the service lay in its built-in analytic tools, which can save hours of manipulating data in a single project. And while I do get a strong interest from multiple users, many would like to give the tool a try with a promotional complimentary subscription. I am not certain if I convey where the value is strongly enough.

I am thinking of adding a LITE version of the same service, which will do the same, but won't have most of the analytics. In addition I can include a comparison chart of what features LITE and regular subscriptions include.

I think I will get more subscribers to at least give initial whirl to the service.

What are the PROs and CONs of this approach? Also, any potential problems with offering this LITE version as free?

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3 Answers

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I think staggered feature levels can work great for SaaS. But like Jarie said, I'd avoid saying 'Lite', as it detracts value from the service/product by creating a negative perception to the customer.

Beyond that, the actual presentation of the plans themselves can be crucial. You want to frame the plan properly so that it accomplishes its mission: to ultimately steer people towards your premium services and then lock them into a subscription.

Personally, I love how 37signals handles it. Take Basecamp for example. You immediately know there is a free trial available, that a massive number of new companies are signing up on a regular basis, and that it only takes 60 seconds to be one of them.

Looking at the plans, they give extra emphasis to the 'sweet spot', the 'Premium' plan. There's nothing really special about it, this is just the pricing point where they want to drive the majority of their users to, and the entire page and even the plans themselves are set up to do just that.

Take a look at the names: 'Max', 'Premium', 'Plus'. They all add value to the product. There is a 'Basic' and 'Free' plan almost hidden at the bottom. This is intentional in that it makes them seem inadequate compared to the others.

They've made sure there's something there for everybody, but still, the page is essentially set up to drive you to that 'sweet spot'.

Check out this cool article to see an evolution of their plans, pricing, and presentation over time. I'd bet good money that their conversion rate has steadily increased with the changes.

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up vote 1 down vote

Read these regarding 'free' versus paid subscriptions. It has helped me better determine pricing for some of our products.

Provide good insight on offering free plans.

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Read both articles -- great stuff. Although my livelihood does not depend on the success of this venture, extreme low conversion rate from free to paid is a major deterrent and I'm glad I now have the knowledge instead of learning it the hard way. Still not sure though why LITE is a "bad" word. In my case it can describe light on features as well as suitable for light usage. LITE seem to be a commonly undeerstood concept, isn't it? Would "Budget" be better? I personally want it to be very clear and not "cute", the way some sites call the plans... You actually read and compare to make sense. – usabilitest Sep 19 '11 at 4:36
Because Lite communicates less than -- as in "less filling" -- which may be the right way to go for your market. I think that Ryan and Jamie and Alex are saying that you might want your lite version to be the baseliens and the current version to be the "professional" or "premium" to communicate a "more than" -- like SuperSize. Look around at your purchase decisions and see the contexts you are invited to go "more than" versus "less than" and I think you will see the accepted standard. – Joseph Barisonzi Sep 19 '11 at 10:38
Lite is definitely understood in the mobile space. It's less used in web app / saas settings. However, in your case it seems like it is better than the 'free' version. Just make sure it's obvious what features they will be missing out on and make sure it's still nice and usable ... but they should be itching for the features in your paid version pretty quickly. – Ryan Doom Sep 19 '11 at 12:57
up vote 4 down vote

Lot's of SaaS companies have been successful with "Lite" versions (like SurveyMonkey and anything from 37signals) by not calling them "Lite"

I think you have to avoid calling it "Lite" and just have different levels of user experience. That way, you can get a good cross section of users that pay for your service at different levels -- all without losing sales on the high end.

The trick is to figure out what features are at each level.

To start, I would take a look at what features your present customers use the most and see if a nice cleave point exists. You might cleave based on the number of users, kinds of queries, analytics, etc.

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