Recently I have had several clients developing software applications and mobile apps. I’ve been in the software industry and software implementation in one form or another for over 2 decades so I’ve seen a lot of different models for development and product roll-out. The software I see and use seems to have a very different way of reaching their market: It starts with free.
I’m just taking serious note of it as I have had some friends create a new software program that has some potential for great value and they want to ask $420 a year to use it. When I tested the software and found several bugs and functionality issues I came to the conclusion that although they have something, it is not ready, in my opinion, to be a full offering. Here are a few things I think they have missed with this roll-out of their product, that apply to most businesses and some suggestions I think would gain them more clients up front and potential investors to create the full premium version of the software.
Start with Free
The best way to get people using your product is to offer some portion of it for free. The “Free for Use – Pay for Premium” model is used a lot for some of the biggest and best loved software applications right now. In the software industry it is almost expected. Here are some examples of software programs that have ‘Free for Use’ components and ‘Pay for Premium’ profit models.
Facebook.com and Google.com
Get connected, start relationships, and build a following for free. When you are ready to be in front of your target market on other pages they visit you can pay for ads. I would say Google is the granddaddy of this business model to the scale they have created. For years the founders of Google did not even want to charge. Their investors kept asking, “how are we going to make money if we didn’t charge?”
Well that all worked out for them, the users and the investors, didn’t it?
Hightail.com, Dropbox.com and Anymeeting.com
Hightail (formerly YouSendIt.com), Dropbox, and Anymeeting are all online support software packages that can be used for free. They are completely functional and provide amazing support to a certain level for free. Their profit model comes when people need more.
Hightail will send large files for free. If you want to track the downloads, keep records of your messages, brand your emails, or send extra-large files you can purchase one of their premium packages.
The same applies to Dropbox and Anymeeting. Dropbox is a cloud storage location and Anymeeting is for webinars. Want more storage… Want to record your webinar or host larger groups… that’s when they charge.
I admit, I have never used this website but I do know a great deal about it because it was the focus of a book by Bill Murphy (The Intelligent Entrepreneur). I know that they rolled out their software and enticed as many people as possible to use the software for free. Then they transitioned to a paid model.
Here is one way you may be able to use free to get more sales.
- Give the software for free to get a large user base
- Use the feedback to streamline the product for optimal value for your clients.
- Evaluate how clients use the software to create a plan for a premium product.
- Leverage the numbers of your current user base to get outside investment.
- Use the investment to create a paid segment of your product that answers needs not fulfilled by the free version.
- Roll-out the paid product marketing to your current clients first.
- Create a marketing campaign to reach new clients and give your current clients bonuses for bringing in new clients.
If you can give something of value to start a relationship with your target market then think about giving all or some of it for free to get more sales later on. It may be the first step to your multi-million dollar enterprise.