Thursday 5 January 2012

"I am done with the Freemium Model" says Tyler Nichols


Tyler goes onto say....
"I am done with “free”. I have come to the realization that most people who want something for free will never, ever think of paying you, no matter how valuable they find your service. I found this cold hard fact out over this Christmas holiday with my free Letter From Santa site. The site uses a freemium model allowing people to create personalized printable santa letters for their children for free. In addition to the free version, I also offered a paid version that includes a higher resolution letter, a personalized envelope and door hanger for a nominal cost."

He goes on to explain that free customers where higher maintenance than the paying customers with free customers not reading the FAQ and then going on to mark his thank you letter as spam.

So let me get this straight, you just used my service to make something for your kid for free and then you nail me with a spam complaint?

Even though they had agreed in the privacy policy to the occasional email. Where as the paying customers didn't spam his letter and only 20 of them asked for help.

You can read his full post here and all the comments people have made. 

My only comment is that the whole point of the fermium model is that there has to be enough income from the paying customers to pay for the free service and still make a profit. So the business model has to meet this criteria or it isn't a viable business. Maybe he shouldn't have offered support to the free customers? Would that have made the difference?

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