lincoln murphy sixteen ventures
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Freemium & The Enterprise -Proceed with Caution
We help web companies make print money
Freemium is a Marketing Tacticnot a Business Model
Marketing should align with your market, right?
How does your market feel about free?
Consumer-oriented Customer Acquisition Techniques
Businesses are DIFFERENT than consumers...
...and that is a good thing!
Businesses have more MONEY than TIME
Mo’ Money, Mo’ Problems
Problems
Money
The best idea:Solve a real business problem & charge money for it
3%
Back of the Napkin Math -Is Freemium even possible in our market?
Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium
Back of the Napkin Math -Is Freemium even possible in our market?
Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium
Health Clubs in the US x30% (reach) x
50% (sign-up) x3% (conversion to paid)
30,000 9,0004,500
30,000 9,0004,500135
Health Clubs in the US x30% (reach) x
50% (sign-up) x3% (conversion to paid)
Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium
Back of the Napkin Math -Is Freemium even possible in our market?
30,000 9,0004,500
Marketing
Stops!
Health Clubs in the US x30% (reach) x
50% (sign-up) x3% (conversion to paid)
Most companies just Lay & Pray
135
Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium
Back of the Napkin Math -Is Freemium even possible in our market?
30,000 9,0004,500
Health Clubs in the US x30% (reach) x
50% (sign-up) x3% (conversion to paid)
Wrong
Users
Beware False Traction!
135
Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium
Back of the Napkin Math -Is Freemium even possible in our market?
The Wrong Kind of Traction
http://www.accesshealth.com.au
Attract the RIGHT KIND of users
http://smoothspan.wordpress.com/2010/03/25/freemiums-for-saas/
“The long and the short of it is that we got a ton of Freemium users, but they were mostly not customer prospects.”
- Bob Warfield
Wide-Band Horizontal (HCM, ERP)Narrow-Band Horizontal (Box.net, Yammer, Xobni)
Vertical Specific - Wide or Narrow
Where does Freemium work?
Wide-Band Horizontal (HCM, ERP)Narrow-Band Horizontal (Box.net, Yammer, Xobni)
Vertical Specific - Wide or Narrow
Where does Freemium work?
That’s why they’re here & not the other types
Freemium Methods that Work?
Alternative Product Strategy
Land & Expand
The best idea:Solve a real business problem & charge money for it
New Pricing & Revenue Modeling Programs coming
in April
