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Freemium Model vs Free Trial: Which is Better for Your B2B SaaS?
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.
Key Points
- 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
- B2B SaaS Business Model: Ultimate Guide for 2023
- How to Build a Profitable AI-Powered B2B SaaS Business for Less Than $750
Generated by Podcast Show Notes at podcastshownotes.ai
Free Email Course - https://bootstrappersparadise.com/course
Private Coaching - https://bootstrappersparadise.com/coaching
Bootstrapper's Paradise - https://bootstrappersparadise.com/
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By Sean Boyce
5
22 ratings
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.
Key Points
- 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
- B2B SaaS Business Model: Ultimate Guide for 2023
- How to Build a Profitable AI-Powered B2B SaaS Business for Less Than $750
Generated by Podcast Show Notes at podcastshownotes.ai
Free Email Course - https://bootstrappersparadise.com/course
Private Coaching - https://bootstrappersparadise.com/coaching
Bootstrapper's Paradise - https://bootstrappersparadise.com/