Re: OT Do free versions work?
- From: "David S" <noway@xxxxxxxxx>
- Date: 19 Apr 2007 04:44:00 -0800
"Chris" <nospam@xxxxxxx> wrote:
Hi
I sell a business invoice application in the UK and in an effort to drum-up
new customers I am considering releasing a free but feature limited version
of my application.
This is an interesting marketing question that needs to be
appreciated in a larger context.
The short answer is "Yes!", but not in the way you might be
thinking.
For starters, I get really annoyed at supposed estimates of
"theft" of commercial software. The fact is, the vast majority
of people who acquire any particular piece of software for free
fire it up once or twice and then never use it again. That's
true of pirated software, shareware, and even stuff you might
give away for free as "trial" or "lite" versions of the app.
I was approached by someone last year to supply him with a free
copy of a new app that he could use to complement a product
launch he was running. At first, this made me cringe. But I've
noticed several marketing folks who are pulling in a SH*TPILE of
money by giving stuff away. It's rather counter-intuitive at
first, but it works.
Personally, I detest the usual "feature limited" versions of
trial software -- like the ones where you can't save or print
or really do anything useful with the program other than play
with it. That's a no-no in my book.
I got to thinking ... people often tend to make buying decisions
based on a time vs. money equation. People who value their
time more than their money are happy to buy an upgrade that
saves them time. However, people who value their money over
their time will NOT upgrade. These are people who swear that
assembly language is the best way to program anything. Or who
bought an old copy of VB4 and see no reason to upgrade.
It boils down to effectively selling the BENEFITS of the
full product.
So I looked at some of the features of my app and asked myself,
"what are some features that are really nice time-saving
features that can be removed without affecting the overall
utility of the program?" In most apps, there are several. If
not, add some.
I build a "Personal Edition" of the app using compiler switches
to exclude these time-saving features, as well as a
"Professional Edition" with the missing features included.
Note that I don't use a registration key to enable additional
features because they can be hacked.
The "Personal Edition" is given a price, but its primary role
in life is to be used as a marketing tool. I think I've sold
one copy. I don't care if people pay for it or not.
When they come to my site to get a copy, they give me their
name and email address, and then are presented with a "One-Time
Offer" for an upgrade to the Pro Edition for a reduced price.
On average 10% of them purchase the Pro upgrade right then.
Nobody complains about missing features in the Pers Ed, as there
aren't any. For example, one program contains some editing
features where the user needs to supply synonyms for words.
The Pro Ed includes a thesaurus included in a pop-up editing
window, while the Pers Ed lets you open a browser window
to thesaurus.com. When your thoughts are flowing, that
browser window seems mighty slow!
Another thing in the Pro Ed is something I call "Smart Links".
They make editing much faster and easier. It's like the
difference between having a WYSIWYG editor vs. a plain vanilla
TMemo for editing HTML code. Except we're talking about just
a few words at a time, so it's not like editing an entire
web page.
I calculate the prices this way:
Pro Ed Full Price = $xx
Pers Ed Price = $yy
Upgrade price = $xx - $yy
OTO price = upgrade price - 15%
Again, the Pers Ed _is_ available for sale, but I make very
few sales.
Out of 1500 people who've grabbed free personal editions of
two apps, I've had 250 people buy the Pro Ed, either via
the OTO or just from the web site. A couple of people have
actually upgraded, but most of the activity is either OTOs
or direct sales at full price. (And the occasional promotion.)
The thing is, my mailing list is quite responsive to follow-up
offers. This is where you can make most of your money in the
long haul. Just be aware that 99% of your Pers Ed users will
never use the program, and they won't upgrade. But they
WILL periodically buy something you promote to them. Enough
to make it worthwhile anyway.
In a nutshell, that's how you can make a pile of money by
giving stuff away for free!
-David (digloo at yahoo com)
.
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