I'm hustling to get my new app out and I plan to use a kind of "hybrid" system. Perhaps it has a name but the premise is just that you have to attach VALUE to whatever it is you are giving away. If you price something as "FREE" and then give it away, then the user does not feel like he's really getting anything. If you price something for $200.00, and then give it away, well they just got $200 for FREE - AWESOME!!
So my current plan of attack is have 3 pricing tiers that all costs money. Then as of now, I'm in "beta" so I have this huge "sale" "this month only" where all users get "PLUS accounts FREE FOR LIFE!". And clearly right there, Plus accounts normally cost $100/yr, so I'm reasoning that a customer would derive more value from signing up than if I had just called the Plus plan "free" with a fat ass zero for the price.
So in other words. Be a premium product so everyone understands you are worth something, and then have sales, and reasons to give those oh-so-valuable plans away.
Heh, I read about this tactic in the Yes! book. It's a great one. I think it'd be a great tactic to do for a short term marketing run, but labeling a Basic product as $30 a year BUT YOURS FREE!!!1one for the long term might not be so reputable, right?
Yeah, as a once-upon-a-time dreamhost customer, I was pretty annoyed to have paid $119 for a years hosting only to see that they discount it 98% every now and then. Definitely not a good feeling.
I think what I'm thinking is more a long the lines of "actually" giving away a non-free plan. So whatever your entry level paid plan is, just lower it a little more, and then be prepared to charge money for it, but anytime you want to do a marketing push, give it away for free. So its not going to be like some secretly free plan. The whole point is to give something of value away for free. I think all customers would appreciate that.
Lastly, I like how 37 signals has a lowly-advertised ass-basic free plan. It's still free, but they make it a point to really imply that "it aint all that great". I like this because it implicitly reminds every customer that deals with 37 signals that their product costs money for a reason. It's kind of like thinking about it backwards...why would I think this company is worth anything if they give everything away for free? Actually...thats EXACTLY what I think about dreamhost now. I have to say back in the days I thought dh was a good company because it was better than the godaddy account I came from. But I've come to realize they absolutely whore out their plans (98% wtf) and its literally at a direct cost to their full-paying customers.. (shared hosting) I am officially not a fan of dh and I am that burned enough to leave a negative comment about them in a public forum as I'm doing now ... Give your customers something of value!!
I'm hustling to get my new app out and I plan to use a kind of "hybrid" system. Perhaps it has a name but the premise is just that you have to attach VALUE to whatever it is you are giving away. If you price something as "FREE" and then give it away, then the user does not feel like he's really getting anything. If you price something for $200.00, and then give it away, well they just got $200 for FREE - AWESOME!!
So my current plan of attack is have 3 pricing tiers that all costs money. Then as of now, I'm in "beta" so I have this huge "sale" "this month only" where all users get "PLUS accounts FREE FOR LIFE!". And clearly right there, Plus accounts normally cost $100/yr, so I'm reasoning that a customer would derive more value from signing up than if I had just called the Plus plan "free" with a fat ass zero for the price.
So in other words. Be a premium product so everyone understands you are worth something, and then have sales, and reasons to give those oh-so-valuable plans away.
HTH