Freemium vs free trial: Where do you stand?

I think it really depends on your product

For my own (Evoke), a freemium plan would not be feasible due to cloud compute costs. However, I think if it costs nothing for you to implement a freemium or free trial, or at least costs very little, it could be beneficial.

A huge factor to me is the value (or lack of value) that free users bring to paid users. If you have the functionality to make sharing/communities/connection a good, useful experience, free users can be awesome -- they might make the coolest, most useful stuff for the paid users.

But at most of the places I've worked, freemium didn't make logical sense, even when we really wanted it to. We didn't want to put in the product work... we just wanted lower acquisition costs, haha.

@IndieJames Thank you, man, for sharing a detailed post about the pricing of the product and which one to choose and why to choose a free or a trial option.

We have worked for our product's free trail option because our product is not much complicated but the first users want to see how our product can help them to grow their business.

If you have a good product and giving a free trial is a good option. We are woking on Churnfree a customer retention tool that is helping the SaaS membership business to reduce customer churn and increase the customer retention rate.

Recently a person facing high customer churn and sign up for free and on the same day he converted to the paid pro plan because on the same day our tool helped them to save to users from churning... he is selling $39/memerbership and on the same day our tool saves his 39+39 = $78 and he pay us only $49 for our tool service it means he is on the profit from the same day.

the rest of the 29 days he will enjoy the revenue he was losing on the name of churn.

I share if you have a good product then your customer can be converted to your product in short period of time because they see their growth first that does not matter what you have developed... they see how your product will help them in their business growth.

Reduce your customer churn rate with Churnfree. Enjoy 14 days free trail.

Oh cool, I like that “free tier + trial” approach. Best of both worlds. Will implement. Thanks!

I completely agree that freemium is a better model than a free trial. One of the key strengths of freemium is that it allows users to try out the product without the pressure of a ticking clock. They can take their time and decide if the product is right for them. Additionally, freemium offers a more sustainable revenue stream compared to free trials, which tend to be a one-time event.

In our case, we started with a free plan and added premium features over time. This allowed us to build trust with our users and show that we weren't just looking for a quick cash grab. We kept the core features of our product free, but added additional filters to our premium plan. This approach has been successful for us, as it has allowed us to offer a valuable service while still generating revenue.

However, freemium also has its weaknesses. One of the biggest challenges is finding the right balance between free and paid features. If you don't offer enough value in the free plan, users may not even bother trying it out. On the other hand, if you give away too much for free, users may not see the value in upgrading to the premium plan.

Overall, I believe that freemium is a great model that can benefit both users and companies. By offering a free plan with valuable features, users can get a taste of the product and decide if it's worth investing in. And for companies, freemium can provide a sustainable revenue stream while also building trust with users.

All option works according the the product nature, user base, location and features of the product.

Great post. Thanks for sharing. Here’s my take on the subject. Phil… https://abitgamey.substack.com/p/our-product-led-growth

Depends on the product and your standing. If you can afford a freemium model for your users do it. If it costs you a lot of money and your pay users have to pay for the free users ... i think it is not a great idea.

Both models can work well in different contexts. It ultimately depends on the specific product or service, target audience, and business goals.

At GoLogin, there's a free plan and free trial of commercial plans. We have a fair amount of free users for which free features are just enough, they won't convert into premium buyers. So for us a freemium just won't work. It depends on your product and offer a lot.

Some of our competitors don't offer a free plan, which is a serious drawback in my opinion. I'd never pay for a software I haven't even tried.

From my experience, in order to make money from a product you should ask for money in the first place. Capping the free version at the right spot between being useful but pushing the majority of customers to upgrade is a fine art that I've never managed to master.

I'll go with a free trial every time, unless, each user brings some kind of alternative value to me. ( e.g. Network effect mechanics )

Very interesting and insightful content !! Agree with the conclusion .

Thanks for the detailed post with great suggestions and actionable information. One thing that might factor in here as well is the operational issues related to more complicated pricing strategies. Depending on the platforms and integrations that you are using, setting up more complicated free trial plus freemium options might take some gymnastics.

I've been seeing this fight "freemium vs trial" for so many years but honestly, my opinion is: the pricing model is based on solely the fact of how a founder treats their users: either he/she looks at them as a milch cow or if he/she wants to do something kind.

In the first case, the trial is the only option, the second case gives a chance for freemium.

Of course, the technical limits could make some effect too.
For example, if having non-paid users requires pretty expensive resources from a founder, obviously, it's not an option. On the other hand, non-paid users can have more restrictive limits.

It's always a trade-off. As a user, I prefer the freemium model, and so do I as a founder.

Whether people believe or not, all the big tech companies offer free products or services that made them what they are today!

That is cool, thanks

Really well detailed post. Thanks.

I think that both (or three) could work, but it depend a lot on the business that you are trying to build.

How important is interaction between each users in your app? If it is, probably a freemium model is better than free trials. At least at the beginning.

If you are builiding a SaaS and you are validating, you probably should charge even for the free trial, with money back guarantee.

I for one am completely against free tiers. It puts the cost of the free users onto the paid users. Get rid of the free users and focus on your paid users — they are who you should be catering to. Move those cost savings over to them.

Love it! I have tried both and have now ended at free trial with required credit card when signing up.

I chose freemium for my product (Embed N Pages) for a single reason: the viral effect.

Free embeds display a watermark on the bottom of the page, so the main idea is free users will hopefully bring me more users and some of those might become paying customers.

We'll see...

I am with freemium.

The choice between freemium and free trial depends on factors such as the nature of the product or service, the target audience, and the business's goals and budget. A/B testing can help you determine which model is more effective for a particular product or service.

i think freemium is best than free trail but its upon one opinion. but for me freemium is best.

Great post - also pulling existing indie hacker's comments back in is a sick (positive) engagement move. Like @RichardGao mentioned, it really depends on your product.

For Timeva free trial is the way to go since it cost nothing and it gives new users 100% value immediately. I tend to veer on the side of giving potential users everything so they can see the big picture of your value prop.

Awesome post.

Thank you for sharing your thoughts on the debate between free trials and freemium. It is true that this debate is quite heated, and your article helps to provide clarity on the advantages and disadvantages of each option.

I think you've done an excellent job of outlining when it is best to use freemium, and when free trials might be the better option. Your advice on freemium best practices is very useful and can help companies to maximize the benefits of this model.

I would like to add that while freemium can be a great way to build a loyal user base, it is important to consider the potential cost of supporting free users who may never convert to paying customers. Companies must ensure that the cost of free users is not too high and that they are able to provide enough value to incentivize conversions.

Similarly, while free trials can be a good way to filter out users who are not serious about purchasing, it is essential to strike the right balance between the free trial and premium features. If the free trial is too generous, users may never convert, while if it is too limited, they may not see enough value to make the purchase.

Whether freemium or free trial is better depends on the specific needs and goals of a business. Both models have their advantages and disadvantages.

Freemium is a pricing model in which a product or service is offered for free, but certain features or functionality are only available to paying customers. This model is often used by software companies, mobile apps, and online services. The idea is to offer a limited version of the product for free in order to attract a large user base and then offer premium features that users can upgrade to for a fee.

Free trial, on the other hand, is a marketing strategy in which a product or service is offered to customers for a limited period of time for free. This model is often used by businesses that sell higher-priced products or services. The idea is to give customers a taste of the product or service and then convert them into paying customers once the trial period is over.

Freemium can be beneficial for businesses that want to build a large user base and have a lower-priced product or service. It can also be an effective way to test different pricing strategies and features to see what users are willing to pay for. However, the downside of freemium is that it can be difficult to convert free users into paying customers, and the revenue generated from paying customers may not be enough to sustain the business.

Free trials can be beneficial for businesses that want to demonstrate the value of their product or service and have a higher-priced offering. It can also be an effective way to generate leads and convert them into paying customers. However, the downside of free trials is that they require more effort and resources to set up and manage, and not all customers may be willing to commit to a paid subscription after the trial period is over.

In summary, whether freemium or free trial is better depends on the specific needs and goals of a business. Both models have their advantages and disadvantages, and businesses should carefully consider which model is best suited for their product or service.

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Thanks for the thorough post! Especially for including so many points for either approach, and working in the responses from others.

Some of the advantages/disadvantages really depends on the product. For example, user growth can be a horrible metric if you don't have sustainable conversion to paying customers with that growth. User growth without net profit growth is a vanity metric. Besides figuring out marketing based customer acquisition costs (CAC), you need to figure in all of the overhead (IT, customer support) for those free-tier users into CAC. Especially if you're not filtering use cases you don't plan on building features for.

It would be really interesting to tie in how advertising spend performs and affects the trial vs freemium CAC for paying customers. For instance, does freemium act as a cheaper top-of-funnel lead magnet over ads+trial, or do you spend as much in ads cost for either one? Since freemium might be a lower barrier and act as a list builder, is that cheaper, or at least take less ad spend?

As you said, cost of freemium depends on your overhead costs per non-paying user, so CAC is going to vary widely for different services.

I stand with free trials. I've seen them working the most.

Great insights on the freemium and free trial. Keep up the good work 🚀

ill go with Freemium sure because i think its better than free trail.

Fantastic Post! Great breakdown.
We're about to a lunch a SaaS based on Exclusive PPV content that works on the freemium model but allowing people to have an upgrade to the premium account for three months.
Our model allows for free accounts, freemium and premium.
Really good reading the positives and negatives! Very insightful.

I would definitely go for trial with a limited period for my product A-Bot. https://a-bot.app/ which is a plugin for microsoft teams. Would you recommend me doing that ?