Ahh, the great debate rages on! Here’s the essence of the question:
Should I offer a limited version of my website/saas product for free and try to get upgrades later into a “premium” version (freemium) or should I give some sort of a limited free trial and then lock the user out when the trial ends if they don’t upgrade (free trial)?
And I would also add this to the mix:
If I go the “Free Trial” route, should I ask for a credit card up front and then bill automatically if they don’t cancel?
I’ve been thinking about this a LOT recently for speekit. Right now we’re going with the freemium model, but offering a very limited number of lessons (8 currently) to our free members.
So what’s the right answer in this debate? I think it probably depends on your market and your service. Business customers are a lot different from non-business customers (like most of our market) as well. The only good answer, I think, is to test.
But how do you test something as sensitive as pricing? Won’t people tear you apart if they find out what’s going on? Here’s the best I could come up with. It’s a play out of Amazon’s book:
It’s not a perfect test, but you solve the problem of pissing people off by always giving them whatever feature set they ordered at the lowest price… in other words, folks who pick the higher priced option will feel like they are getting a discount.
For more on the subject, check out this really great article on charing for access by RescueTime’s Tony Wright. There’s also a great little blog about pricing here.
