Confessions of a Perpetual Freeloader: When to Jettison the Freemium Tier

How do we update pricing to generate more revenue from these customers? is the question they each proposed to me. The implication of that question is that the carrying costs of the free tier have become too large to sustain.

Periodically examining the value of the free tier as a growth engine and comparing the costs to support it is essential as freemium SaaS companies evolve. I suspect for most businesses keeping the free tier is the way to go because the positive brand impact and lead generation capability outweighs the marginal cost per customer. But for some businesses, jettisoning the free-tier booster rocket as the company evolves to focus on an enterprise business will free a business to focus on the opportunity up-market.

via Confessions of a Perpetual Freeloader: When to Jettison the Freemium Tier.

 

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