MicroConf On Air MicroConf Tactics: This Pricing Strategy is DISASTROUS (unless...)
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Dec 4, 2024 Unpacking the pitfalls of freemium pricing, the discussion dives into why it's more about marketing than actual pricing strategy. The risks associated with freemium models are laid bare, emphasizing the importance of understanding the difference between freemium and free trials. The host shares critical insights on how founders can avoid common errors in their pricing strategies, helping bootstrapped startups navigate this tricky landscape. It's a thought-provoking exploration that could save entrepreneurs from costly missteps.
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Freemium Is Marketing, Not Pricing
- Freemium is not a pricing strategy but a marketing strategy because you charge $0 for your product.
- It aims to generate leads rather than directly generate revenue from users.
Avoid Freemium If Bootstrapping
- Avoid freemium as a bootstrapper because it delays revenue and requires huge user volumes.
- You need to force paying customers to pay sooner to reach sustainable monthly income.
Shutting Down A Free Plan
- Rob Walling acquired an app with a costly free plan and forced users to start paying.
- Only a small fraction converted, illustrating the difficulty in backing away from freemium.