Freemium vs Free Trial - How to Decide?
- Matthew Lerner
- Nov 9, 2020
- 1 min read
Most questions about "freemium" revolve around what should be "free" and what "paid." Sean Ellis to the rescue!
In a “breakout growth” workshop Sean and I hosted last week for CarWow, Deliveroo, Depop, Curve, and a few other impressive U.K. startups, he dropped a ton of great knowledge about freemium (and beyond).
Two things that really stuck with me:
1. Freemium is definitely not dead particularly if your “free” offering has built-in network effects or a referral mechanic, where referrals make the product more useful to the referrer.
2. The free part should... “solve the immediate problem customers know they have when they sign up.” The paid part should solve the litany of problems they are going to discover once they are successful with the free offering.
(A "free trial" by contrast, is a time-limited trial of your full product. So put your best foot forward… But only for 15 days!) This works best for products with a short "time to value" where the interface will be familiar or dead-easy to figure out.
In short: freemium gets them to try the most basic version for easier onboarding; free trial is better when you think they can handle and appreciate the whole package... in 15 days.