In the world of Freemium, one of of the biggest challenges is introducing a paid offering to complement the free one.
Here are a few tips:
1. The new offering needs to be better than the existing one. There are very few examples of companies that have successfully charged for what had previously been free. Best practice is to add functionality that subscribers have been requesting, and charge for the upgrade. Too many companies try to swap offerings, or add features and require everyone to pay–often resulting in loss of goodwill and damaged brand equity.
2. Upgrade messages for existing subscribers should be delivered in multiple ways. Emails and homepage ads are only one way to reach users. A better approach is to integrate the upgrade offer into the product itself, in the form of triggers. For example, with online greeting cards, you can see all the available options, but if you click on a "premium" card, you will be alerted, and invited to upgrade on the spot. Another example is online surveys in which you can click a "download' button, but need to upgrade in order to actually download the survey results into another application.
3. Make sure that you reach out to new subscribers as well. Your new functionality may actually broaden the target audience, so in addition to generating more revenue from your existing subscriber base, you may be able to attract a different segment. For example, if you are an online music business that allows people to hear music online, you may attract a different group of people if you enable downloads to mobile devices or even offline usage.
4. Make sure you test the new offering before launching it widely. I will write more about this subject in a future post.
It is possible to successfully integrate paid with free offerings, but it requires planning, testing and careful communication.
