Summary
Sean discusses the pros and cons of the freemium model in B2B SaaS and why he prefers a free trial to a free tier. While the freemium model can help form a habit with users and has a low barrier to entry, it also comes with risks such as users not converting to paid plans and undermining the value of the product.
Sean discusses the pros and cons of the freemium model in B2B SaaS and why he prefers a free trial to a free tier. While the freemium model can help form a habit with users and has a low barrier to entry, it also comes with risks such as users not converting to paid plans and undermining the value of the product.
Key Points
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- Freemium model creates a tiered system with free access and paid upgrades
- Freemium model helps form a habit with users, but also comes with risks
- Free trials offer a limited period of use before requiring payment
- Understanding activation points is crucial for setting up a successful freemium model
- Converting users from free to paid plans is difficult
- Freemium models can inadvertently devalue the product
- A free tier can be a safer option than a freemium model
Quotes
- “Getting them to switch from how they used to solve it to how they solve it with our product is harder than probably most of us think.”
- “And the freemium can really help you do that with a very low barrier to entry for your users and customers.”
- “It is insanely difficult to convert someone who is expecting a product to be free then to become a paid user of something.”
- “That’s why it’s really difficult to start out with a free product and then at a later date try to monetize it.”
- “Takeaway here is to better understand what a freemium model is and compare and contrast those differences with instead of free tier for gaining access to your B2B SaaS.”
- “And also, in my personal opinion, why I don’t love the freemium model, it’s got limited application and I think too much risk and why I strongly prefer you to consider just offering a free tier instead.”
Free Resources
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