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The ridiculous power of free


#1

So, I was checking out @neiled’s http://www.simplymeetings.com/ site and noticed he has the Mixpanel badge on the bottom. If you’re not familiar, Mixpanel will give you 175,000 data points (tracked events) for adding this badge to your homepage. You already have to be a subscriber though for $150/month min which gets you 500,000.

So, it seems like a rather small upside for the downside of putting an ad on your site. Obviously, Dropbox used this same technique to huge success, however, they’re B2C and it’s sharing amongst friends which is a little different than a general ad on your homepage for another product/service.

So, is free just so powerful that people will do nearly anything for free stuff? Those who’ve placed this badge why did you do it? Have people seen other programs like this that seemed to work well?

For instance, New Relic gives you a tshirt for signing up for a trial. I wear mine all the time :smile: though I never became a customer. Does this work beyond clothing people? Thoughts? Data?


#2

Hi,

Actually you don’t need to be a subscriber, we get 200k datapoints for free after we added the badge. I can’t seem to find an article on it but I’m sure they advertised it to me when I signed up.

I actually think it’s a really smart idea on their part. It seems like they’re really trying to SEO optimize for Mobile Analytics and this has to be helping no end.

Although it does slightly remind me of those ‘free’ wordpress themes that contain a crazy link to something really small at the bottom for the purposes of SEO (lose weight now!).

Still, it’s working great for us. When we hit some revenue we’ll remove the badge and pay for the service.


#3

Ah, I only saw it when I signed up to pay. So it giving you free service makes more sense. I kinda like that, wonder if it converts for them.


#4

I think seeing that badge on lots of websites over time helped to convert me into a customer. Not only that, but I also lobbied to use Mixpanel at my day job. It reminds me of re-targeted ads: Once you know what Mixpanel is, you seem to notice the badge on any site that has it.

Also, just to clarify, Mixpanel offers a free plan (25,000 data points). Adding the badge will give you 175,000 more data points for free (no matter what plan you are on, I think): https://mixpanel.com/free/


#5

That’s an interesting approach. There are lots of possible variations to free plans that people don’t really seem to be trying. For example, I’ve considered doing a “free” plan that’s $1/yr.

At the moment I’m not sure it’s worth it though. If we double our user base, that costs us time and money. I’d rather spend that time and money building stuff for people who’ll pay. :slight_smile:


#6

“Free” that is $1/yr wouldn’t work, as it’s not free anymore and the power of free is psychological. At least that what Dan Ariely’s studies on the subject say. Here’s a video telling about similar experiment with chocolate: http://bigthink.com/videos/when-free-is-dangerous

As soon as there is a price, even if it’s 10 cents, people start thinking again.

I can really recommend Predictably Irrational, the information in that book is great for marketing.


#7

Cool video. :slight_smile:

The $1.00 would be there to make people think. I’m not sure if it would work, but the idea would be to filter out as many people as possible who’d use the service but never upgrade. And to get their CC into stripe, so that upgrading is super easy.

But most saas business aren’t like mine. In basecamp, the hardware cost to add an extra 1000 free users is nominal. For us it’s definitely not.


#8

Isn’t it :slight_smile: Too bad he had to get those burns to get interested in rational decision-making.

After you mentioned the cost to add customers I just had to check what your SaaS was again. Then I went “Ooh - It’s one of my favorites! Why are they even thinking about $1 plan?” Sorry, but that was my initial reaction.

In my opinion you have a very high-value product and the $19 plan is reasonable for anyone who has any customers or a real business. $1 plan might get you more people, but who would they be? Cheapskates who don’t upgrade easily and require the most support. People who have built products that no-one wants - and those products will stop existing soon. Hobbyists who will never upgrade. I love the idea for filtering people out with price, but is $1 enough? I have no idea.

Unless you have a competitor who is collecting up the good prospects with their free plan? But in that case the “free” may win you anyway. It’s tough to compete with the funded guys who can pull off marketing like that.


#9

Thanks :slight_smile: Yeah, right now a free plan isn’t on our radar. But it never hurts to explore an idea.

I didn’t really mean to make this all about me. I was originally just meaning to say that there are lots of variations of the free plan that might be interesting to see results for. They probably wouldn’t be the same results as for a pure free plan. But it would be interesting to see the differences.