Mariamz

For freemium success: tell them why

Posted on: May 15, 2010

The New York Times has announced their latest freemium experiment – a “metered model” where lighter users get content for free but those who use the site heavily will be asked to pay.

On the face of it, this may just cause heavy users to leave the NYT when they hit the subscribe request. However, this model is worthwhile exploring if the NYT pays close attention to three things: user flow, payment methods and telling them why.

Payment methods

There are still a suprising amount of sites that make it difficult for you to part with cash. For example, just the other day, I was very keen to support the inspirational Sue Black in her 10k run in support of  the Mental Health Foundation. Having entered my donation figure I was then confronted with the ‘are you registered?’ question – which took me in a full circle of thinking I was registered when I wasn’t.

The point is, think very carefully about uneccessary barriers when you are trying to collect payment.  If justgiving.com lets me pay by PayPal – why do I also need to register with them? 

An important consideration in relation to this is payment methods: providing as many options as possible makes things easy for users. Here are some of the most popular online payment service providers that should be considered – after weighing up a) the cost of implementation and b) charges for handling transactions.

If possible users should be asked the method they prefer before any are built into a website. A pragmatic option is to implement one payment provider and then add more until the site has reached a satisfactory level of payment completion (it is possible to measure this by viewing the exit page from the purchase screen).

Telling them why

Potential subscribers should be told very clearly the benefits they will get from subscribing / donating / making a purchase. But the site can also be explicit that an action will help the site – and that this help is needed. Content on the New York Times isn’t free to produce, and making it clear they are dependent on user patronage will serve as an incentive for the loyal user to go through with their payment. Here are some examples of sites being explicit to users that completing an action / making a payment will help sustain them. They are mainly donation-funded media, but the principles employed and language used is transferable to any online operation seeking user support:

Wikipedia

Money saving expert

Smashing Magazine

Age of Stupid

(via Laurel Papworth)

Global Voices

(click through to their donate page to see a great example of providing lots of payment options)

Democracy Now!

Picture of New York Times June 29th, 1914 from Wikipedia

Advertisements

2 Responses to "For freemium success: tell them why"

Nice post – these 3 components are a big part of getting people to upgrade in a freemium model, but there are definitely other components like getting the right balance of features and capacity to entice the user to upgrade. A couple good SlideShare presentations from Pandora and Xobni – http://www.forentrepreneurs.com/two-excellent-startup-presentations/ – do a good job of talking about how they got to this balance. Another consideration is getting people hooked on your service, so when the time comes to upgrade to get additional features or capacity, they don’t mind paying for the service. Dropbox does a really good job with this because by the time you hit your storage quota, you are using the service every day and see the value in upgrading.

Thanks – those are really interesting presentations. In fact I may write a post highlighting the most interesting learnings from the DropBox deck. I agree that getting people hooked and then looking for ways to get them to upgrade / complete other valuable monetisable actions is a definite winner.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

This blog is about utilizing and optimizing the social web for business, pleasure and social change

My tweets

Enter your email address to follow this blog and receive notifications of new posts by email.

Creative Commons License
This work is licenced under a Creative Commons Licence.

The views in this blog do not reflect that of my employer