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I'm working to launch my product in the near future and some guys are asking if there will be a "free" version. I've read some opinions that discourage the freemium model because canibalizes sales and the paying customers subsidize the free users (notice that I not call them "customers"). Considering that most software product expose a free edition, how an only free-trial product can deal with these users without getting so much negative impact? |
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If this product has to do with user's data (ie., data will be saved somewhere like 'notes') I strongly advise you to provide a free version. It's a "lock in strategy" where user must return to your product and use it; so at some point they need to either upgrade (to a paid version) or export (if function exists) to their local computer. However, if the product has nothing to do with users's data or the "lock in strategy" will not apply; don't go with a free version. When people pay for something they have expectation and they show interest. When it's free they rarely care. |
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Those who are asking for an unlimited free version aren't likely to convert into paying customers so disregard them. The actual premise of the freemium model is that users will convert into customers once they reach the ceiling of the allowed capacity (the number of projects/contacts/collaborators/tasks/etc). It also allows to test drive the product without fully committing to it (i.e. roll out a small pilot). When you have a limited-time trial of the full-featured offering, you're already covering both of those points. The time limit forces users to convert or abandon the product quickly while the complete product allows them to make sure it fits their workflows. Now, as far locking-in user data goes (as @adhg has mentioned), you should always provide the option of exporting all data uploaded by the user/customer. It's just good experience for them. An even better experience would be to allow users export their data after the trial ends if they decide not to convert to paying customers after all. |
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Our product is used by software developers, who expect free almost naturally these days. Moreover, the third-party product that is the de-facto industry standard is free. We have introduced "free for non-commercial use" some time ago, and it has started to pay back: a few such users have decided to commercialize their products and bought licenses for ours, and some have recommended our product to their peers for use in commercial environments. This is our story; it may not apply to your product at all. |
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If you have people asking about a free version, this is a good sign that you have a product that people want. Next, you should talk to them about their problem (the one that you're trying to solve with your product) and really understand the problem(s) from their perspective. This will give you the data you need to set and justify your pricing. Note: asking these people what they would pay, at this point in time, might be tempting, but would be a mistake. |
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