tech-company, business-plan, website, software, saasFor context: I’m 21 years old and looking for ways to make a little extra income. Over a year ago I built a productivity web application that I’ve neglected for a while now, but looking back on my analytics I think it would be silly not to try and monetize my free web app.
During a typical day, my web app gets 20,000 unique active users and within a month it gets 42,000 unique active users and 5.5 million pageviews with 5 minutes spent per each pageview…
My plan is to turn my web app into a freemium model, where users can upgrade for a monthly fee and get better/more useful features..
I created a Google Form and had 7 questions for my users to fill out and answer. One of the questions was “How much would you be willing to pay to ‘Upgrade’ to have better/more useful features on __?”.
So with 300 users who answered (which is a somewhat small sample size) this is the general breakdown (just as a sidenote, my biggest competitor has 2 million users and they charge $1.99/month to upgrade):
Not willing to pay to upgrade: 75.2%
$0.99/month: 8.6%
$1.99/month: 0.7%
$2.99-$5.99/month: all had 0%
Other (which ranged from answers like “Depends on the added features”, “Willing to pay a one time fee, but not monthly”, “I’d like to but can’t at the moment” etc): 15.6%
So with all that being said, according to my small sample size, 9.3% of my users would be willing to pay $0.99/month, which going off of my monthly user statistics would be 3,906 users who’d be upgrading… which would be a lot of money, and that doesn’t factor in the 15.6% who were a little skeptical, but decided against answering “not willing to pay to upgrade”…
So I have a few questions for you guys that have done this before: How reliable is this information? Sure 9.3% said they’d be willing to pay monthly, but when it actually comes down to paying do they?
My goal is to make $2,000/month.. is it safe to assume if I implement a good “Upgrade” solution I’d easily make that based off of this survey?
Is charging $0.99/month my safest bet? What about if I had 2 plans where you get some features for $0.99/month but even more added features for $1.99/month?
I guess I’m just trying to figure out what my next step should be… Thanks for any advice!
Asking what they’d pay is not the most effective/efficient way to find out.
If you survey people, you’re better off finding out what specific problems and situations have led them to your app.
When it comes to money, what people say and do are two different things.
Your best option is to actually test out your pricing and see what’s best for you and your customers.
You are doing all the right things! Great job collecting that data. 300 survey responses is impressive. Your customers must really like your product.
Frankly, you are in the best position to decide the next step since you know your product and customers far better than we do. Given the data you collected, charging $0.99/month for additional features seems like a great next step.
I’d suggest proceeding in smaller steps instead of big changes. For example, add only the $0.99/month option now. In a year, consider adding the $1.99/month option with more features based on how things are going. You will lose some customers by charging for features, but smaller steps should alienate fewer customers.
Going from a free product to paid product, you should:
For a $0.99/month product it should be really low risk of someone suing you, but the above two things will decrease your risk even more.
Getting people to pay is all about creating value. When people talk about value, they are not referring to money - they are referring to the benefits someone receives from using a product. For example, a microwave’s value isn’t the cost or even that it cooks the food - it’s about convenience. Microwaves save people time. Thus, it has value and people pay for it. Find the value in your product, market it effectively, and your users will pay.
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