VP Product at an IoT SaaS startup · 7y ·
Here’s a few common reason why, over the last few years, I’ve supported feature requests for low-paying/free customers:
- To make things harder on current and potential competition by reducing the price that everyone in your market can charge for “baseline” features. This is especially helpful if your product/company has some capabilities that that your competitors can’t easily match, which lets you lower pricing on your low-end offering without endangering the value of your unique higher-end offerings.
- Because the competition is doing #1.
- Because your support team is overwhelmed with complaints from low-paying customers. By making the low-price/free product more self-service, you can reduce your support costs and (more importantly) free up your support team to service higher-value customers better.
- If the feature can be easily “upsized” for a paying customer (or, conversely, throttled for free users) to make upgrades more compelling. Sometimes it’s easier to get users to upgrade if you can give them a simple or limited version of the feature for free to get them excited to pay more to make the feature better or unrestricted.
- To grow your marketing & sales pipeline by bringing more customers into the funnel. (Although your mileage may vary on this one—for many products, the value of freemium leads may be less than you’d expect, and conversion may be harder than you expect.)
One key insight is that low-end users often ask for things that higher-end users don’t want at all. Try to avoid building those features when you can.
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