Idea: Go free first, then start charging customers


3

My primary aim is to get as much publicity as I can get.

  1. Would it be a good strategy to go all free when you first launch your product and then turn it into a paid service couple of months later?
  2. Should I really let them know in the beginning that the service will turn into a paid service later on. Letting them know might hurt number of users, not letting them know might hurt their feelings. Is that correct?

Thanks in advance

Pricing Launch

asked Nov 16 '11 at 21:44
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Celalo
118 points
  • You will generate a lot of bad will by switching from free to paid. You will lose many customers. At the very least charge for extras - don't just switch. – Tim J 9 years ago
  • thanks a lot for all the answers. It sounds good to me to convert to paid service where letting early users keep it for free. – Celalo 9 years ago

4 Answers


5

I think you should have a basic free offering but also a premium paid offering right from the start.

It's really challenging to charge people once they are used to getting something for free. It's also not a good business strategy because what people use for free they might not pay for.

Develop a Minimum Viable Product (MVP), have 2-3 tiers of pricing (with one being free) and go from there. That model has been successful for a lot of SaaS companies and there is no customer confusion about wanting to charge for your product.

answered Nov 16 '11 at 23:24
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Jarie Bolander
11,421 points

2

Turning a free service into a paid one is of course legit but will give you a very bad publicity. It would be much better to either have a premium version from the beginning or somehow (specially if you want to turn into a paid service very soon after launch) keep it free for the users that signed up at the beginning (in the end, they are doing free beta testing for you)

answered Nov 17 '11 at 02:27
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Jordi Cabot
243 points

2

I would say yes, and definitely yes.

Or, you can let the early adopters use the site for a while (6 months?) after you convert. Remind them monthly that their special treatment will end on a certain date, so they are not surprised.

Also, how much does it cost you to let them use your service. Often it is zero. If so, why not let them keep using it for free?

It's also a good idea to have a free option MVS (Minimum Viable Service), regardless of how many people use the service before you start charging.

Don't overestimate how many users you will have, even if you give it away for free. You may be surprised at how difficult is to get people to use your service, even if it is free. (I am speaking from first-hand experience.)

I suspect that given the small number of users and low cost it will make sense to keep them free. Once you are big, rich, and successful, you can tell them they have to pay. Until then, having more users will generate momentum.

Another idea is to ask a favor of them. "We are converting to a paid service. Since you have been an early adopter, we are going to allow you to continue using the service for free. Could you do me a favor? Can you give me feedback about how we can improve? What made you decide to start using the service in the first place?"

answered Nov 19 '11 at 14:00
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B Seven
234 points

1

Take a look at Seth Levine 's breakdown of pricing models. I found it to be very helpful when thinking of my own pricing model. For your situation I think you should consider:

  1. Do users get value from the product right away, or is the value tied to the number of users? I think initially offering a service for free makes the most sense when you need to attract a lot of users before the value can be perceived by the user.
  2. It's very hard to start charging for a product that used to be free. Users don't like it when their prices go up, and going from free to paid is a big leap. It's likely that a lot of users will leave - is it worth giving away the product for free if a lot of users will leave when you start charging?
  3. Speaking from a personal perspective, as a user I would definitely like to know if a service is free temporarily
answered Nov 17 '11 at 01:54
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Jrullmann
383 points

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