In today’s episode, Steli and Hiten talk about the benefits of using freemiums (free plans) for your startup. SaaS companies are known for implementing free plans and with good reason—it’s an incredible way to get people hooked onto your product or service. Tune-in to learn the pros and cons of implementing freemiums and how to turn your free users into paying ones!
Time Stamped Show Notes:
00:03 – Today’s topic is freemium
00:37 – The first episode about freemium was The Startup Chat’s 3rd episode
00:58 – Listeners say the freemium episode was one of the best episodes of this podcast
02:21 – Hiten’s opinion of SaaS companies having freemiums has only grown stronger in the last two years
02:31 – If you have a SaaS business, you NEED a free plan
03:39 – “If people start using your product, why would you ever want them to stop?”
04:08 – A free plan helps you bring people onto your platform
04:19 – Without a free plan, you are missing a growth opportunity
05:04 – Having free users is a long-term marketing play
05:36 – In Close.io, there’s a distinction between their audience, people who engage in their marketing, and people who engage in their product
05:55 – When you have people using the free version of your product, they are still part of your marketing and are not actual customers
07:11 – Hiten often finds that the product team is responsible for the free plan users
07:38 – Sales want qualified leads; these leads can be those who have signed up for the free plan
08:34 – Freemium has activity points that people reach that qualify them for sales
09:21 – If you’re not into long-term marketing, don’t offer freemium. Or, you can offer it, but have an outbound strategy for sales with a paid product right away
09:53 – The free plan gets you marketing, word of mouth, and lowers your customer acquisition cost
11:04 – Do you have an opportunity for a free plan in your market?
12:02 – The key to setting up a free plan is knowing your limits
12:18 – A CRM tool with one free user is a classic example of a per-user charge
13:08 – Advanced settings or upgrades are also a great strategy for opting-in your free users
13:18 – If you are product-challenged, don’t use free plans
14:47 – Mailchimp is a great example of a company who gained success from freemiums
15:27 – Hubspot is also an example of a business with freemium offers
16:01 – if you dedicate your business to having free plans early on, you don’t miss out on the early customers in your market
16:12 – “If you don’t do free, someone else in your market might”
17:30 – If you have examples to share regarding using freemiums or not, send an email to Steli or Hiten
3 Key Points:
Freemiums are a MUST for SaaS businesses because a free plan lets potential customers experience your platform for free.
Setting up a free plan for your business is dependent on your offer limit.
If you’re product-challenged, don’t do a freemium as it will only create problems.
Hey, everybody. This is Steli Efti.
And this is Hiten Shah.
Today we're actually going to revisit a topic that's been one of the most popular episodes that we've ever done, and that was the freemium discussion we had and freemium episode. You know, I didn't realize this, Hiten, until I just looked it up, but the freemium episode was the third episode we released. It's number three. I don't know.
If you had asked me I've would've said like maybe ... I knew it was an early one, but I would've said like the 30th or 40th one or something. I didn't realize it was the third. It's one of the most popular ones, and one that I frequently encounter when I talk to p...