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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on our pricing strategy book, Price to Scale, the key is to strike a balance where your freemium plan is compelling enough to attract users and let them experience the core value of your product, while still reserving advanced, high-value features for paid tiers to drive conversion.
Here’s a concise approach:
• Core Value Delivered:
– Include enough functionalities that allow users to see how your solution fits their needs. This creates both stickiness and trust in your product.
– Ensure that the free plan showcases your unique value proposition without revealing every advanced feature.
• Strategic Feature Reserve:
– Deliberately withhold premium or 'power-user' features that provide significant benefits and differentiate the paid offering.
– These advanced tools should address complex needs or deliver performance enhancements, thereby creating a natural upgrade path.
• Continuous Calibration:
– As discussed in Price to Scale, continuously monitor user engagement and conversion metrics.
– Use this data to adjust the mix of free versus premium features so that your freemium offering drives conversions without eroding overall revenue.
In summary, our book recommends a deliberate separation between the essential, free-to-use features and the high-value, premium enhancements. This ensures that freemium users are engaged and see enough success with the product, all while having a clear incentive to upgrade to unlock the full potential of your solution.