ignite cloudware - saas freemium business model overview
DESCRIPTION
Freemium is becoming a common business model for SaaS vendors wishing to gain market share in short time. The presentation provides an overview of the varied Freemium models used for B2B & B2C.TRANSCRIPT
Igniting Your SaaS Cloud Sales
SaaS Freemium Business Model Overview
Revital Libfrand, Co-founder, Ignite Cloudware
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What is Freemium ?
Freemium is a business model based on the concept where the company give a limited version of its core product away for free and sell premium products or services The freemium model is used in several variation both for B2B & B2C Examples:
Skype Provides free Skype-to-
Skype calls
Sell other calls type (landline,
voicemail, mobile etc)
Gmail service for businesses provided for free up to 10
users
Sell additional mail users &
storage
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Types of Freemium Model
Capacity based Freemium
Get limited capacity
(usage, # of users etc) for
free, additional capacity requires payment
Feature based Freemium
Get limited features for
free, additional features requires
upgrade to premium version
Get Ads Freemium
Get free sw access license
with Ads;
Removing Ads requires payment
Use case based Freemium
Free access based on usage i.e
Developer free license,
Non commercial
use free license etc
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What companies wish to achieve with Freemium Model ?
• Gain large volume of users easily • Brand awareness • Generate product attention so free users will convert into
paid customers • Gain community of product fans so free users will attract
paying customers
The Product is the Core ! Great, flexible & quality product that people want & love is the most important condition for creating a successful freemium model
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- Suit mainly B2B
- Consumer is exposed to all features from day one
- Conversion to premium is easier from consumer perception as the product is already adopted.
Capacity Based Freemium
Capacity Based Freemium -Highlights
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- Suit both B2B & B2C
- Limited version must provide true benefit to consumer to avoid churn
- Upgrade to premium is not trivial from consumer perception as it requires users new adaptation process
Feature Based Freemium
Feature Based Freemium -Highlights
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- Suit both B2B & B2C
- Consumer is exposed to all features from day one
- Conversion to Premium is done to remove vendor watermark or remove sponsored Ads
Get Ads Freemium
Get Ad Freemium -Highlights
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- This model is used to enable users adopt product in certain environment (developer, non-commercial, students etc) so once they become decision makers they will be more likely to pay for the software
Use case Based Freemium
Use Case Based Freemium -Highlights
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Is Freemium the right business model for me?
Ask yourself these questions: • Does my product adoption requires any
assistance? • Who are my ideal customers? is
freemium right for them? • Does the marginal cost of freemium
user is close to 0 with your product? • Is freemium right for you (does the
math works for you)?
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If you plan Freemium to Premium….
SMBs may never reach the paying level and vendor should consider the cost of free users
Vendor must communicate to Consumers the benefit of the additional features and their ROI
Consumer learned to get alone in Ads environment
Ensure the Ads revenue model works for their product
Challenge to properly monitor consumers’ usage
Take into consideration the following challenges in conversion process…..
Feature Based
Capacity Based
Get Ads
Use Case
Are you struggling what is the preferred Freemium to Premium model suitable for your product?
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Go-To-Market Plan
• Product –targeted sector, geography, integration & implementation issues, on-going support
• Pricing- MRR/YRR/Freemium model • Promotion – sales strategy, online marketing promotion
strategy • Place – company website, social networks, professional blogs
and websites.
Product Pricing Promotion Place Go To
Market Plan
Ignite Cloudware Provides wide Sales & Marketing services to SaaS vendors. Our Go-to-Market plan in a nutshell :
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Ask me how to build a successful go-to-market plan for your SaaS business
www.ignitecloudware.com
+972-72-2116601