Let me preface my post by stating I am a non-technical founder.
We are gearing towards launching our beta for a mindfulness/self-care app that is AI based, growing towards a Machine Learning system. Other apps (NON-AI) in the vertical charge anywhere between $7.99-$132 on a monthly basis.
We intend to always give a 14 Day FREE Trial. My thinking is that, for the first year, we would offer early adaptor prices for $2.99/month and an additional $4.99 for a trained coach to provide the service, combining computer analytics with human intuition. These prices are a way of testing the price-mix while driving user acquisition and accelerating the machine learning/database growth. By year 2 we plan to establish more competitive market prices at $7.99/monthly or $5.99/month for annual subscriptions. For the coach-matching tier the lowest we can charge is $29.99/monthly or $19.99/month annually (comparable coach-matching platforms go for $50/monthly).
My question is: Should I rather give the app/service for free for the first year (or up to a number of active users) in hopes that helps it go viral? Some west coast investors suggest that, while east coast investors seem to need proof the business can generate revenue, and the sooner the better. Also, if anyone has specific advice on the pricing (is it too high? too low?) I would appreciate that, too.
Thank you kindly!
14 Day FREE Trial looks good. 30 Day FREE Trial looks better.
$7.99 does not look attractive as it cost too much (it's an opinion only). If you charge $2.99/month, you may gain and keep more customers.
It's all up to you. What you focus, on customers or monthly charges?
Sansan, I like your idea of 14/30 days free trial, then levels of membership, from $2.99 to $5.99 ($7.99 may be high, needs to be tested). That way, customers can sign up with no downside, and as you know, most of them will "stick" and continue paying. I suggest that you roll the ones for whom the free trial expire into a "default" plan of, say, $2.99. You can then upsell them to the next levels, if the value is there for the user.
I also like very much the "raffle" of 10,000 subscribers getting free 3 months ... this creates scarcity and urgency, both very sought after features in customer acquisition.
Hope this helps.
ReMi Net, Thanks for your reply! At this point the most urgent is to get customer traction and prove the platform/market fit, but that means (to most investors I meet) not only a ton of non-paying users, but also the fact that people *will* be willing to pay something for it. I do intend to start with the $2.99 for the first year while we push to drive up customer acquisition. Maybe I can find a way to keep the basic level always at $2.99 while including upgraded features in the $5.99 & $7.99 levels. I am also considering offering a 3 month (or up to 10,000 first subscribers) a full year for $20 plus an invitation to our launch party in NYC which will probably be a co-branded event with a bigger company that complements (but not competes) with ours.
As far as the free trial... I know a lot of SaaS models go for 30 Day Free, but this practice is much less common in wellness apps where, at best, you get a week or 10 days, if any. I feel 14 Day gives the user a chance to try the platform 1-3 times and see if they're into it. They only need that many with our platform as it provides pretty much one simple service.
Thank you so much for your insight!
I have an app and website development company and based from my experiences I think its always best to not charge for the app initially. Keep it free so people can download it and use it. The more downloads you get the more visible you will be in the app/google store.
You can include in app purchases for people who want to use the premium functions that you provide or any other additional services that you can include in the paid option.
So since you just launched your app keep it for free so you get downloads, reviews etc and you can learn from your customer what needs to be changed and fixed.
If people pay for the app and they are not happy then they will write a nasty review so reframe from that.
Well said. To avoid a ton of non-paying users better deliver lower price first. Review customer acquisition annually and it will show you is it worth to increase service prices or not.
E.g. LinkedIn charge enormous prices. It's affordable for businesses, but (I think) not for individual users.
My delivered Venture also will focus on low fee accounts
Personally, if it was me I would follow the mobile gaming industry model of something free that has useful but limited function with buy ons and additional features. I can't stand the "free trial" approach. I NEVER utilize them, but admittedly I am far more selective than the average consumer. Its not as bad as "gold, silver, and bronze" packages which are the schmuckiest approach to business...and unfortunately as of about three years ago..healthcare in the US. If I understand it correctly, it seems like a cool ap. The human mind is like the ocean, only a minute portion of it has been mapped out.
From the vantage point of a potential consumer of this type of product, I would suggest that you offer baseline services for free. The focus should be showcasing why you are the best product on the market. If customers love the product they will naturally recommend it to their friends. To help spread the word, you could offer something like one free month of the coach matching tier if they refer 3 friends (whichever metric offers the right payback). Then once your user base is great enough, you can focus on ways to attract advertisers and introduce more pricing tiers.
One other piece of advice is to incorporate some kind of storytelling in your company's branding and mission. For example, I tried Mend because I identified with the founder's story about why such a product was needed in the market. I'll note that I never paid for Mend, but I did end up telling at least 5 friends about it. - Very cool concept - good luck!
The free trial approach is effective, expected by the app users, and provides some clear benefits, if the goal, as stated here, is to provide customer traction and lead to beta paying customers. The benefits are: 1) provides commitment - once the customer downloads the app, she/he is somewhat commitment. Granted, not very strong commitment, as when you pay for something, but the user can sample the product. If they like it, they will stick to it; 2) it provides a "stickiness" to the app. You provide a free trial, then you charge the user $5.99 or $7.99 at the end of the trial. Many will stick with it, as they now made a stronger commitment.
There is no 100% proof solution.
However, Sansan, more important than the free trial discussion, is how the app interface looks. Does it guide the user to take the actions that you intend them to take? Does it make it easier for the user to complete the action on the UI, whatever that action is? The UI is an environment that needs to be designed to nudge the user to complete the action, there and then. To me, that is more important at any moment, as the UI has one single chance to capture the user.
If you want something to spread in a "viral" way, make your baseline free. Many industries have proven that a freemium approach results in higher overall revenue than a paid-baseline approach.
Here's the math: 10,000 people paying $1 is the same as 1 person paying $10k. Reaching the 1 person with that much cash is a numbers-game. If 1% of your clients are willing to pay a large sum for exceptional service (that's a normal rate) and it costs you close to nothing to recruit new users, you gain a lot more from the million or so people who use your app freely than the thousands willing to pay a small fee.
Freemium strategies also free your hands in terms of customer service. Users of a free app are a lot more forgiving of the occasional misfit of features, so you'll find yourself spending a lot less energy on client-retention by focusing on as small a usergroup as possible.
It's a lot like the entertainment industry you were a part of. The availability of pirated media reduced DVD sales less than it increased ticket sales. Spending is commonly a social experience, and people are more likely to take their friends to a theater to see a flick than they are to invite them home to screen a DVD. This is a net gain for producers, because the loss of low-cost sales is balanced by an increase in high-cost sales.
Summary: make your app free, and include features (ESPECIALLY features that can be "gifted") that cost money to unlock.
If I were you I'd be looking for ways to socialize a user's progress in their journey. Let your app be a place where people can interact with *others* on a journey of self-discovery. Include small 'token of appreciation' features that can be gifted from one user to another. Watch as the network effect skyrockets your revenue as people begin to reward one another for accomplishments. (Effectively, giving digital flowers.)
I'd be happy to chat about the subject in more detail - just hit me up in the PMs :D