Free Plan Anxiety...
Hello everyone!
So I just ran some calculations about cost estimates and pricing and I found myself very anxious about one thing: The free plan.
I can imagine some of you had this too. Having a free plan brings many benefits with it but what if I have so many people that use the free plan that I lose money?
In my case (Mailspree), the monthly cost of a free user is about $1.01 - which seems like not much at first, but let's assume I have 1000 users using the free plan, it gets up to $1,010.00 really quick, and I didn't calculate the "static" monthly costs which means I did not calculate costs like stripe processing fees, hosting costs etc.
How did you tackle this? The alternative in my case is charging $9/month(or $5/month when paying annually) with a higher email sending limit per month (50k) which, I think, will slow down growth or even be a no-no for some users (Mailchimp for example is free with a sending limit up to 10k).
What did you do for your SaaS? What would you do in my case? I also thought about introducing the free plan much later when I have enough revenue to cover the costs of free users.
Let me know what you think!
I'm struggling with the same problem.
My take so far:
Are you sure you need a free plan? What about offering a free trial instead?
If people leave your app, they were never gonna be paying users.
I've received open, honest communication from SaaS's that I've used and something along the lines of "we can't afford to offer a free plan any more because it costs us X" goes over pretty well.
There's some interesting reading around changes Strava (cycling app) recently changed their free plan. Nothing I've read faults them the changes its more the lack of notice and communication around the changes.
Long story short, I suggest:
1.) It's ok to change things later on, just communicate first.
2.) Don't wait until your app/service becomes "business critical" before making those changes.
3.) You might think about putting a time limit on the free plan, Even if it's 6 months that at least contains your cost.
Good luck!
I did two things