When something costs nothing, you’ll get a lot more people to try it than if you charge up front. That’s the idea behind freebies, on the web and otherwise. Free lowers a barrier to entry.
Consider this:
- Shopify had a service that allowed anyone to create an online store for nothing up front. Shopify only got paid when the seller was paid.
- Then they up and added a monthly fee.
Portland Web Innovators has a discussion of the changes. Poor communication from Shopify seems to be the biggest culprit here, but the long-term damage may come in the giant barrier they constructed in front of prospective customers.
I think we’ll see a free version back soon, with premium features available for a monthly fee. The “Freemium Business Model” is powerful because it harnesses the simplicity of free and adds on important bits for those who get the most benefit from your product.
The model allows new customers to hold off on paying until they know it’s worth it. Money now may be better than money later, but any time you ask for money, a big chunk of folks leave.
A Portland company that plays the freemium game well is SurveyMonkey. Their price list shows a good free service with room to move up.
Throughout their site SurveyMonkey reminds the free users of features they could have. It’s like a shareware registration nag, but less intrusive.
Those who are in it for the free stuff keep on taking, but who will they go to when they need more than 100 respondents or want to redirect to their own site upon completion? Most of them will choose SurveyMonkey, because they’re already familiar with what it can do.
Shopify may go for the harder business model. Maybe it will do better, but I doubt it. Free is very easy, and on the web simplicity–and its low barrier–rules.
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