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When should you offer your product for free? Or should you never? 🤷♂️
For the first time, I'm launching a B2B product. This product is a SaaS sales solution for a niche industry. We've always capped our free beta users at 15, for feedback cycles in my previous B2C launches.
However, this product a much higher ticket item and the value itself has significant ROI immediately.
I want to charge off the bat. But I'm not sure that's the right move right out of the gates (leaning prob not). I'm curious to hear from other makers who have launched B2B SaaS products and their thoughts about getting their first 1-3 users / customers (institutional level).
Should the same methodology apply? (i.e. exchange feedback for payment)
Appreciate any insight! 🙏
18
Replies
Ben Brausen
It's certainly a challenge. By offering it for free (or even a reduced rate) you risk devaluing the product. Unless people find a HUGE value in the product, they're unlikely to go from paying nothing to paying something for it, even if the price is very low. Look at how many will find a free app to do the job of a 99¢ app, despite the fact it does it only 50% as well.
I'd suggest reading up plenty on pricing strategy, especially with regard to B2B.
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Thanks for you thoughts @benbrausen. The .99 cents point is a very valid one. The product is $89.99 (basic package) but that comment has me thinking... 💭 Maybe we can simplify even further and offer an even more basic package.
Definitely think there are reasons why. Offering to an early-stage startup is a great way to get an early customer later down the line once they make revenue
Intellectually, I understood that people don't value free products as much as paid ones and that charging for my product would force the issue: is this product valuable or not?
Rather than starting with your product, start with your customer. How much will your client spend to solve their problem?
It’s worth ‘pricing the need’ before starting product development. This will help you quickly eliminate high-touch products that would be too expensive to operate and identify cheaper product ideas that clients can afford.
Super GREAT thinking @sanaz_bidad.
Tough question though, because there's a balance right... The product we're offering could (honestly - not just saying this) bring $50,000+ return to anyone using the tool, but I can't price it that high... So where's the balance? I'm typically a subscriber to the YC pricing strategy of identifying a starting point (based on data + value) and adjust the price by 5% -/+ to see where that breaking point is.
Dear @alex_papageorge
I recommended this article for you https://www.linkedin.com/pulse/w...
I know a lot of B2B CEOs are very against ever offering their product/service completely for free. That being said I think there is some value is offering a heavily discounted early adopter option!
@austinmeta I like the discounted rate, good idea. Similar to @arseniyw , I prefer the idea of some kind of payment instead of just outright free. I feel there's another level of validation of the idea/product with a payment in exchange for value.
@arseniyw @alex_papageorge If possible, maybe even running some A/B tests where you charge some people at a discounted rate vs offering it for free for a limited time.
It depends. For my E-book Start With A Side-Project I'm delivering great value for what I ask for, so I decided to charge for it. Now it's even on AppSumo https://appsumo.com/marketplace-...
If your goal is to build an audience and this is not the main product on your line, then consider giving away for free. If you don't plan ahead with upselling another product and your product delivers, then consider charging.
@noy_s Book looks solid. Congrats on the sell of a side project! Three months is FAST. Good thinking too. We're leaning on breaking down the product into three different "packages". That being said, and to your point: For the demographic we are targeting, we have an entire product suite. So, theoretically, we would be able to upsell the audience on other products / higher package offerings. With that, would you suggest offering the "basic" package (let's call it) for free?
@arseniyw ❤️ that idea. I'm a big appsumo fan too so I'm familiar with the website. Out of curiosity, I'll check out appsumo (great idea), but do you know any similar websites?
@alex_papageorge I don't know how much exposure it provides, but I think https://startup.deals/ does something comparable.