A Freemium Model That Works
Tuesday, May 10th, 2011When I started eBookBurn.com, I was unsure of the pricing model, but I was definitely determined to charge money for it.
Ebook conversion “consultants”, part of a cottage industry that has developed recently, take an author’s source material, spend several days or weeks hacking it into an acceptable (or in some cases unacceptable) digital file, and charge several hundred dollars.
So in that context, I started with a time-based scheme: one day of using the editor cost $25, one week cost $150, and so on.
My reasoning was: if an author already had their source file ready, copying chapters into the editor and making minor edits would take no more than a few days, the resulting files would read well, and it would cost just a fraction of hiring a consultant.
Unfortunately, people have come to expect that web apps should be free or at least “freemium”, and so my pricing generated some complaints.
Since I got no traction, I tried keeping the basic concept, but lowering prices.
That improved things a little, as I started to see some paying users, but the ratio of people who started to sign up versus those who actually paid and continued was disappointing.
So I tried offering three days free to every new account, and that worked, at least in converting visitors to registered users.
I saw a big jump in my log activity, and several new ebooks were being generated by different authors every day.
However, as before, very few of those users actually paid to continue once the free period was over, and many simply re-registered with a different email address.
It was frustrating, since traffic was high, and based on the number of new registrants I was getting, I knew this service filled a need.
Start Over
I got some unexpected help from a sales rep from a “deal of the day” site (i.e., an AppSumo clone).
She was interested in it, but wanted to come up with something that she could package and sell on their site.
I got her to sign up, and walked her through the basics of creating an ebook, which she got right away.
After a while, she said, “Why don’t you let people sign up for free, let them use the editor as long as they want, but when it comes time to actually burn* the book, charge them a flat fee?”
*Unlike most people who asked about the name, she immediately understood that the “burn” in “eBookBurn” was analogous to “burning” a CD or DVD, without my having to explain it first
The Benefits of Paying Users
A few days after I announced the change in policy, the site had already generated more revenue than in the prior month.
Even better than the boost in revenue was the increased feedback.
When people pay for something and do not like the result, they complain (i.e., unlike people who try something for free and simply shrug when something goes wrong).
Those complaints led me to fix several issues that I hadn’t seen or anticipated before, and it made the service even better.
Perhaps best of all were some of the emails I got back from users when I solved them:
You guys are awesome.
Let me just say that you rock!
So, yeah, thanks.
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That is a PERFECT way to deal with the problem.
Now I will add the remaining chapters and finish the book.
Great!
Thanks!
It’s amazing how a few emails like that can keep you going.
