How To Convert A Free User To A Premium User — Part 2. Reactions.

Yesterday’s article was one of my best pieces so far — or so it feels, at least. If you didn’t give it a read, make sure you go right now. As a consequence, it gave birth to some insightful discussion.

Reader 1 — Transparency And Honesty + A Churn Story

I enjoyed reading this, thanks for sharing it. It’s interesting how varied the approach has been to converting free users, and how no-one has definitively “solved” the problem despite the huge amount of research and investment it attracts. 2 contrasting examples I think of from my personal experience are Evernote and EverPix.

I was a very happy leecher of both companies, 1 day, Evernote switched off from their free tier the one feature that I actually relied upon (email to evernote), I felt that to suddenly give them money would actually encourage them to keep holding their users hostage, if I pay now, what stops them creating another tier and disabling another feature I rely upon, so I abandoned them.

Everpix sent me a really nice email, they articulated how many photos my account was storing and what their AWS costs were as a result, the email said (from memory) “our goal is to run a sustainable business and to do that, we need to be making some money from our customers, if you have the means, please consider upgrading your account so we can continue to offer you the best service possible”. That logic was flawless and I upgraded there and then.

Ironically, Everpix died and Evernote survived, so I don’t posit that the approach that worked for me is the model to apply, but I find the different models genuinely fascinating and it’s pretty clear, if you’re going to run a freemium business, you need deep pockets to sustain your operations while your community considers its motives.

“I was a very happy leecher of both companies” — That cracked me up

Your third paragraph hit it. Should Evernote had done the same, you’d probably have fewer problems with that given their transparency and honesty.

Think Wikipedia. They’re free as fuck and you’ve seen the “please donate so that we can keep it free”. I know they’ve got:

  • over $80m (million dollars, yes) in donations in 2015
  • assets worth around $100m in 2017
  • probably even more due to anonymous donations (and if you’re donating a lot you want to be anonymous)

And I still have absolutely no damn problem with them asking for money. Yes, that’s revenue on top of which there are expenses (a huge bill, given how much they’ve got to cover).

They’re transparent, they don’t hide these figures I’ve just posted and that’s totally fine. Surely they must be in top 1000 value sources of the modern world.

I think it’s not shame that gets people to donate to Wikipedia but, if anything, guilt. I’ve helped you so much I’ll guilt you into returning it, at least to a degree. I think this is the next wave. And then everyone will be doing that (because making someone feel guilty is a flaw, somehow), it’ll be the old-school and we’ll find something new.

But hey, in the grand scheme of things, at least we all started being better by providing value

Reader 2 — Transformation Story

I agree with your recommendation. I launched a rental inventory management system targeted towards small businesses several years ago. Results were solid but didn’t scale at the rate I wanted. We offered a 7 day free trial, but many users ran out of time for setting up their inventory, and when prompted to pay, they left (likely because they didn’t have an opportunity to experience the benefits before they were asked to pay).

Our new offering is priced based on tiers of inventory (fewer than 10 items is free, 11-50 is $40/mo, 51+ is $90/mo. Under this structure, clients could use our system indefinitely for free, and when they find enough value (or grow their business), we participate in their success. Results have been great so far. Onward!

Boy have you found the guy who believes in this! The caveat is that it takes mental strength and courage to make “the jump”. more so if it’s before going through the phase as you did.

Hopefully, it will be the standard more and more as:

  1. It’s absorbed into culture as good practice.
  2. It’ll be easier to accept micropayments, which I’m sure cryptocurrencies will take us to.

Reader 3 — Visual

Love this! Great knowledge nuggets in this.

I really liked the part about not having a problem parting with the money because of all the help my service has given . Doing the things that don’t scale and creating emotional connections. This has been something that keeps popping up in my head everyday and it’s reinforced with an article like this. This just nails the fact that it is my job to keep listening and to keep building the right solutions

I’m a visual person so I really enjoyed the company examples with Dropbox, Spotify as well.

That’s exactly my point with the examples. If it made sense on a conceptual level, it will hit hard when examples are given.

Reader 4 — Looking for VCs

Trying to do this with a 2 sided marketplace. Every VC I talk to says I need to monetize before they will consider investing. I want to keep it free but no one else does.


I’ve written something the other day — this piece

It’s about why sometimes it’s better not to follow-up. Give it a read and maybe it will make sense. The parallel I’m drawing from following up to your VC case is that

  1. They’re not the right fit if they won’t be talking to you unless you monetize it — VCs become more mainstream when the market is doing well (which it definitely does at the current moment, a lot of people have money) and then the core of good VCs gets watered down. No worries though, it will be washed away at the next crash
  2. Even if you’d “convince” them, it’d be a nightmare in a few months/years.

You might know what I’m talking about. If you do, more power to you and good luck having the patience to find the right VC.

Reader 5 — 70k visitors/month

Best article I’ve read in months.

[Upon me asking whether a line stood out] 

Actually yes. “Open up your doors… and mutually benefit from the winners.” I shared it with a couple of people on my team. We are in a very similar predicament right now. We have about 70,000 people coming to our site each month. But we have paywalls walls up to enter the site.

We’re highly considering opening up the floodgates with a free version, and offering a paid version that has a few better features.


About Ch Daniel

I run chagency, an experiences design agency that specialises on helping tech CEOs reduce user churn. We believe experiences are not only the reason why users choose not to leave but also what generates word of mouth. We’re building a credo around this belief.

If I’ve brought you any kind of value, follow me and get in touch here: LinkedIn | Twitter | Email

I’ve also created an infinitely-valuable app for sneaker/fashion enthusiasts called Legit Check that impacted hundreds of thousands over millions of times – check it out at chdaniel.com/app

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Illustration Credits: Mike Winkelmann

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