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Estd 4.22.2023
Below is a concise answer grounded in our saas pricing book, Price to Scale:
Direct Answer
When designing a freemium offering, include the absolute core functionality that lets users immediately solve a problem or experience the primary benefit of your product. However, reserve advanced features, higher usage limits, integrations, analytics, or customization options for the paid tiers. This balance gives free users enough value to adopt the product while preserving compelling reasons to upgrade.Insights from Price to Scale
• As discussed in our book, the freemium model is effective when it focuses on the essentials—the critical features that solve the customers’ core problem—while incentivizing users to move to paid plans through premium features and extras.
• Our pricing strategy emphasizes not “giving away the farm.” By providing a robust free experience that demonstrates your product’s potential, you create a natural pathway where the premium elements (advanced functionality, deeper integrations, and higher limits) become clearly desirable upgrades.Practical Application
In practice, you might:
- Offer basic access to key functionalities that users need daily, ensuring the product’s value is evident.
- Paywall value-add features such as advanced metrics, multi-user collaboration, customization options, or integrations with other vital systems.
- Clearly communicate within the app the benefits of upgrading, so users understand the additional value and capabilities unlocked with a paid plan.
- Summary
The takeaway is to strike a balance between delivering immediate, practical value and reserving enhanced, business-driving functionalities for your premium tiers. This approach, advocated in Price to Scale, not only attracts users but also creates a clear incentive to upgrade.
By following these guidelines from our pricing strategy book, you can ensure that your freemium model effectively converts engaged users into paying customers.