

Why Free Plans Do Work - mmilo
http://www.angrymonkeys.com.au/blog/2010/08/19/why-free-plans-do-work/

======
wolfrom
It sounds from the explanation that was provided that the free users for your
product contribute not only to customer acquisition but also create value
through their contributions to the site. In this case, free may make sense for
your software, as only you can weigh your infrastructure and support costs vs.
the gain in marketing and usefulness of the product.

But your experience may not be common to many other businesses. If free users
aren't contributing to the product other than marketing, it would come down to
a decision of whether or not that goodwill was worth the added cost. It can be
hard to measure that cost, but perhaps Twitter Analytics and web referrers can
provide an idea.

~~~
toast76
The main point I was probably trying to make with regard to our particular
model is that it is a viable alternative to offering a free plan as a trial
version. If you're using "free" as a "trial", you're doing it wrong. There are
plenty of opportunities to utilize a freemium model without resorting to it
being Shareware. Ours is but one example.

Chargify is a great example, as are others that have startup/education plans.
The point is that if you want to have free as an option, you should own it and
promote it and make it work for you. Having a free option as a subtitle is
simply a dumb idea. If you want to charge people, charge them. Don't be half-
arsed about it. Having a free plan because you're not sure people will pay is
the fastest way to find the unemployment queue.

Most importantly, if you have a free plan, there should be a REASON for having
that free plan. Having a free plan is sensible when there is a natural
progression to a paid plan (e.g. Chargify), there is benefit to your business
by fostering a community (e.g. UsabilityHub) or there is potential to make use
of micro-transactions (e.g. Xbox Live). The point is, that there are plenty of
options to be explored by all businesses, not just those that leverage the
input of the community like we do.

