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independence7 unconnected · 7 more authors in those circles
standing

contested · 11 claims against 11

applies to

b2b and consumer, no audience needed

mixed results

confidence

high

evidence

23 claims · 21 articles · 4 receipts

window

2017-08-07 → 2023-12-27

7 builders who never spoke to each other · contested

Decide whether a free tier earns its keep

One camp staffs the free tier as a marketing department, because free users are who tell other people, and reports it as the largest single acquisition channel they have. The other camp measured free users outnumbering paying ones, performance problems hitting the customers who do pay, churn rising and revenue missing, and switched it off. The tell that yours is broken is healthy usage next to no revenue, which means the free version already delivers the thing people came for, and the honest counterweight is that free users are often the only source of the messages telling you what to fix.

What both sides agree on

  • Suspect your free tier when usage is healthy and revenue is zero: if the free version already delivers the experience people actually value, they have no reason to upgrade to the paid part.

Where this splits

Fishkin, Riley and Nath run a permanent free tier as their main acquisition channel, while Jarvis, Kahl, Kogan and Zue report free users raising costs and churn without producing paying customers.

  1. side 01 · 11 claims

    Run a permanent free tier as your acquisition channel

    Andy Goldschmidt · Cory Zue · Dru Riley · Jakob Greenfeld · Justin Jackson · Katelyn Bourgoin · Martin Schneider · Preetam Nath · Rand Fishkin

    1. 1Keep a genuinely useful free tier with an allowance that resets, and say out loud that you want people to stay on it.
    2. 2Treat the free tier as your main marketing channel and staff it as one, because free users are who tell other people.
    3. 3Open a free tier so trying the product costs nothing, which brings acquisition cost down instead of paying for every signup.
    4. 4Run a free tier with no expiry date and sell the advanced features on top of it.
    5. 5Deliberately leave your free tier generous when search is your acquisition channel, because Google rewards a site that visibly solves visitors' problems and that feeds the funnel you are trying to monetise.

  2. side 02 · 11 claims

    Cut the free tier and sell a short trial

    Arvid Kahl · Chris Frantz · Cory Zue · Failory · Greg Kogan · Justin Jackson · Paul Jarvis

    1. 1Skip the free tier entirely so paying customers are never funding non-payers, and say that in the pricing argument.
    2. 2Offer a short trial instead of a free plan and let the product close the sale inside that window.
    3. 3Run a short free trial with no card-free tier behind it, and expect most of the people who start one to pay.
    4. 4A freemium tier can raise churn instead of leads. Baremetrics opened most paid functionality to free accounts, free users outnumbered paying ones, the data load caused performance problems that hit paying customers, churn rose and revenue missed, and they shut it off.
    5. 5Avoid a permanently free tier early on because supporting it becomes a burden before you have the staff for it.

What it returned

  • 40,000

    SparkToro reached nearly 40,000 free users in a year and Rand Fishkin names them the number one marketing channel, having chosen freemium over a free trial and counted that among the calls he got right.

  • Rand Fishkin reports heavy free use from artistic, creative and entrepreneurial users whose searches refresh every month, and says the paid tiers exist for when someone needs more depth or is doing it for an organisation.

  • Umso gives away a website, Typeform gives away forms, and Backendless gives away a database.

  • RemNote pairs a free-for-life plan with paid Pro features.

Sources

the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

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the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

963 corroborated plays to draw from · 3 a week

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