What are the pitfalls of 'free plans' in web services and how to set the correct free plans?



SaaS , which provides software via the web instead of selling it as a package, often offers users a free plan because it makes upgrades easier. The free plan is useful for raising the profile of SaaS, but it comes with a price, says Guido Zuidhof , a machine learning expert who has launched several SaaS.

No Free Plan
https://nofreeplan.com/

The free plan will give users a chance to start using it without hesitation, so it is an effective way to increase the number of users when SaaS is not well known yet. Depending on the product, even if a free plan is set up, the server will not be overloaded and there is no concern that the cost on the development side will increase, so it can be said to be a marketing method used by many developers.

However, Zuidhof cautioned that the existence of a free plan incurs the cost of 'time' and 'labor' on the development side, even if there is no financial cost.

Even if SaaS operation generates $ 1000 (about 100,000 yen) a month, it is either the revenue from 10 users who use the $ 100 (about 10,000 yen) plan, or $ 1. The resources required for support vary greatly depending on whether the profits obtained from the users of 1000 people who use the plan (about 100 yen).



When you have a SaaS that offers a $ 5 / month plan and a $ 500 / month plan, customers who use the higher-priced plan generally have more specialized knowledge. Customers with a monthly plan of 50,000 yen may demand a higher level of support, but such customers tend to continue to use the service even if the price is raised if the level of service is high, so time Is worth the effort.

On the other hand, as the number of users increases, we face the problem that 'many users do not pay for services.' This is the same no matter how good the product is. And some non-paying users don't think 'it's free, so it can't be helped' when they don't get what they want. Some people will demand free services that are only available on paid plans and write bad reviews when that doesn't work. Zuidhof thinks that you shouldn't devote your time and effort to such a user who has a lot of demands despite tightening the purse string.

Since the SaaS business is not a charity, it is necessary to make a profit, but there is a situation that 'the number of users of the free plan exceeds the number of users of the paid plan by more than an order of magnitude, and the development side wastes time on the users of the free plan'. It happens a lot. However, in order for SaaS to survive, 'high-quality users who may eventually lead to conversions' are required.

That said, few people want to completely eliminate the cases where SaaS is used for free in people's hobbies and charity projects. Therefore, Zuidhof recommends offering a limited free plan in the following form.



◆ Free plan with a fixed trial period
A limited-time free plan that provides free services for a certain period of time is recommended because it lowers the barrier to using the service, but it allows users who like SaaS to pay.

◆ Choose a free plan user
If you have a website that says 'We have a free plan, please let us know' for a specific use, such as an open source project, a charity project, or an educational use. It is possible to offer a free plan in response to the contact from the user for the purpose. It is convenient to write down the requirements for applying the free plan in advance so that you can make a decision immediately when you are contacted.

◆ Providing a one-time payment 'lifetime trial plan'
One way is to have a one-time trial plan instead of a completely free plan with an unlimited period. The point is to make the price of this plan payable so that it is not too expensive. This eliminates users who don't want to pay, while making the product accessible to 'small budget users who don't need professional features.'

Zuidhof said that it is less fatigued on the development side to prepare a plan of 19 dollars (about 2000 yen) that is paid off than to prepare a cheap subscription plan of 100 yen per month, and the service works well. It was.

In addition, it is said that the following three points should be noted when providing a payment plan.

1. 1. SaaS does not last forever, so guarantee a minimum of 1-6 months of usable life or provide a refund.
2. Specify the deletion of inactive accounts that have not been used for more than 6 months.
3. 3. Have a discount when migrating from a pay-as-you-go plan to a subscription.

in Software,   Web Service, Posted by darkhorse_log