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Ignite cloudware - SaaS freemium business model overview


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Freemium is becoming a common business model for SaaS vendors wishing to gain market share in short time.
The presentation provides an overview of the varied Freemium models used for B2B & B2C.

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Ignite cloudware - SaaS freemium business model overview

  1. 1. Igniting Your SaaS Cloud SalesSaaS Freemium Business Model OverviewRevital Libfrand, Co-founder, Ignite Cloudware
  2. 2. 2What is Freemium ?Freemium is a business model based on the concept where thecompany give a limited version of its core product away forfree and sell premium products or servicesThe freemium model is used in several variation both for B2B& B2CExamples:Skype Providesfree Skype-to-Skype callsSell other callstype (landline,voicemail,mobile etc)Gmail servicefor businessesprovided forfree up to 10usersSell additionalmail users &storage
  3. 3. 3Types of Freemium ModelCapacity basedFreemiumGet limitedcapacity(usage, # ofusers etc) forfree,additionalcapacityrequirespaymentFeature basedFreemiumGet limitedfeatures forfree,additionalfeaturesrequiresupgrade topremiumversionGet AdsFreemiumGet free swaccess licensewith Ads;Removing AdsrequirespaymentUse case basedFreemiumFree accessbased onusage i.eDeveloperfree license,Noncommercialuse freelicense etc
  4. 4. 4What companies wish to achieve with Freemium Model ?• Gain large volume of users easily• Brand awareness• Generate product attention so free users will convert intopaid customers• Gain community of product fans so free users will attractpaying customersThe Product is the Core !Great, flexible & quality product that peoplewant & love is the most important conditionfor creating a successful freemium model
  5. 5. 5- Suit mainly B2B- Consumer is exposed to all features fromday one- Conversion to premium is easier fromconsumer perception as the product isalready adopted.CapacityBasedFreemiumCapacity Based Freemium -Highlights
  6. 6. 6- Suit both B2B & B2C- Limited version must provide truebenefit to consumer to avoid churn- Upgrade to premium is not trivial fromconsumer perception as it requires usersnew adaptation processFeatureBasedFreemiumFeature Based Freemium -Highlights
  7. 7. 7- Suit both B2B & B2C- Consumer is exposed to all features fromday one- Conversion to Premium is done toremove vendor watermark or removesponsored AdsGet AdsFreemiumGet Ad Freemium -Highlights
  8. 8. 8- This model is used to enable users adoptproduct in certain environment(developer, non-commercial, students etc)so once they become decision makersthey will be more likely to pay for thesoftwareUse caseBasedFreemiumUse Case Based Freemium -Highlights
  9. 9. 9Is Freemium the right business model for me?Ask yourself these questions:• Does my product adoption requires anyassistance?• Who are my ideal customers? isfreemium right for them?• Does the marginal cost of freemiumuser is close to 0 with your product?• Is freemium right for you (does themath works for you)?
  10. 10. 10If you plan Freemium to Premium….SMBs may never reach the paying level and vendor should consider the costof free usersVendor must communicate to Consumers the benefit of the additionalfeatures and their ROIConsumer learned to get alone in Ads environmentEnsure the Ads revenue model works for their productChallenge to properly monitor consumers’ usageTake into consideration the following challenges in conversionprocess…..FeatureBasedCapacityBasedGet AdsUseCase
  11. 11. Are you struggling what is thepreferred Freemium to Premiummodel suitable for your product?11
  12. 12. 12Go-To-Market Plan• Product –targeted sector, geography, integration &implementation issues, on-going support• Pricing- MRR/YRR/Freemium model• Promotion – sales strategy, online marketing promotionstrategy• Place – company website, social networks, professional blogsand websites.Product Pricing Promotion PlaceGo ToMarketPlanIgnite Cloudware Provides wide Sales & Marketing services to SaaSvendors.Our Go-to-Market plan in a nutshell :
  13. 13. 13Ask me how to build a successful go-to-market plan for your SaaS