The German middle class of innovators lose it said recently on techtag.de and not least because of the price pressure impedes competition – we have to rethink about <-! more ->
If you’re looking for software on the net today, comes rarely without the search terms “free”, “free” and “free” from. Want to pay for an app the least and when we already pay for music and Co, but then please just flat subscription fees, so that we hear all the music and use all the features.
“The competitive pressure is increasing Price pressure dominates, which in turn prevents innovation activities “, Christoph Strobel writes in techtag article” Weak economy slows innovation of the middle class “. Also we have for some time free software in our marketplace and want to have long been using the free demos of our vendors to attract customers.
Destroy price dumping, the price / performance ratio?
Last year the price battle of the big cloud providers Amazon, Microsoft and Co was regularly in the headlines. The smaller cloud providers were advised to specialize their services and expand, because the low prices of the mega-corporations, they would hardly be able to keep up.
At the same time even have popular companies that freeware and limited free versions make their software available, problems getting their business models in the black. Evernote – with no fewer than 34 million users (Wikipedia, as of 2012) – was able to bring only 4.1% of its users (1.4 million) to book a paid account. And though Evernote already holds more than 100 million US dollars a year, it is still dependent on investors.
This does not necessarily mean that all freeware offers have to fight to bring profits, because such a study of Statista 2013 revealed there are some apps that take as a freemium model largely more money than apps that must be paid from the beginning. The secret seems to lie in the normal service “in-Paid Services” adding, that additional functions that can be used only by a small mite often however. This works – as one might think – not only in gaming apps, but also in social networks, media use (newspaper apps) and organization of content. Only productivity and navigation apps to function much better if they are to be paid at the outset and later require no further payments
freeware, and demo software Fremium -. Which is which? Just click on the image to view a concise infographic.
How much may want, we should pay for software?
Especially with the advent of cloud computing, ie web-based software, seems to spread the price dumping. As a user, you have the feeling that you have to pay less, because you no longer just a box full of CDs (or something old-fashioned: floppy) holds in his hand. But just in software, the production costs of CD packaging and the least in comparison with the lengthy development of the program it / they contain. And while physical books and music albums containing at least some design, context and art in the packaging (whether in the cover, the print or the quality of the package) was software never anxious, “aesthetic”, therefore, to come.
The setting that something just because it is available in the network, is automatically cheaper, must be modified on two levels. Psychologically by the user and the marketing of the provider, the latter is responsible for basically means that the former uses also as far as possible.
This is not to say that freeware, Freemiums and free demos from the ground up are counter-productive for the market, quite the contrary. But the transition from the freeware to pay software to be logical for the user as he seems to be up to date, so that the software market can develop healthily and especially innovative in the digital age, without especially small businesses that do not have to can afford long waits to pay customers go bankrupt.
Let’s think. To the sea trials with a car we want to buy any We do not drive the car afterwards, too regular to work and back to the “test” so that we have no more reason to buy it at all. The test drive is only used to provide the driving experience. Similarly, it is with snack samples at the grocery store, the (really) do not serve to eat their fill.
But in the world of Freemiums it often seems to me as a users individual so as if the free software versions already so perfect that I did not need to avail the pay option. Only with the offers that are really important to me – as commercial-free streaming music even in offline mode – I’m willing to pay more or even to pay.
What providers need to do to sell your software?
So the value must be clearly obvious, while the free version does “wanting more”. But that’s easier said than done, because for many users is the app-life between smartphone, laptop and tablet already complicated and functional overloaded enough, at the same time offer wholesale provider resourceful additives (or sometimes gigantic cloud storage) at bargain prices.
What can you do?
. 1 Security as a selling point
Especially in the B2B sector – ie in software offerings for companies – have providers much more afford than private customers, because if it comes to data storage, personnel management or CRM software – the claims to the data protection and compliance are many times higher than that of a Share app for private clients. In order to ensure safety, some measures must be taken, the transparency of encryption and verification of the server locations. Users are willing to pay for more security, but they also need to know exactly which costs money and that they just do not have this advantage with any freeware.
. 2 Demo takes Freeware
Although everyone feels compelled to offer free applications, the provider should consider whether a demo version is completely sufficient (eg for one or two weeks). This ensures that the user just not for years used the free version (and the Book of the paid version regularly shifts to the next week) and there is a possibility for feedback to the users who have not booked pay software after demo to ask them why they have chosen not to. This can be productive for product development or marketing even in criticism. It must not lie on the product, when a user does not decide for the product after the trial, but to the expectations he had in mind.
. 3 Communication with the customer
Speaking of which, active marketing is more popular than ever, because even though (or perhaps because) our communication processes in the CRM area are always automated, users are very positive about the classical techniques of “Klinkenputzens “: personal mails, calls and proposals for discussion resulting in increased conversion rates and should in particular be applied to users of freemium, freeware and demos. That one should not overdo it, hopefully is obvious, but against a polite requests, which keeps the user from the product, what features he would like to see and why he pays or does not pay, does not harm anyone, but benefits all involved.
. 4 Does not need the freeware?
When a provider has decided to offer freeware Freemiums or trials, he should think about how easily he can make this. Of course, they should provide a good overview of the full version and so well run that the user can not turn away frightened, but the user should at the end still have the feeling that the paid version is much more useful. Here, it is perhaps to some in the later product development that new features are not necessarily incorporated in the free version, but the paid version will be added. The user can then through newsletters or information within the free version of the great features in the payment function will be informed.
. 5 The pay benefits communicate
Why the user should buy or book at all the full version? There are a number of providers that will keep this question silly, but realize with horror that their pay products do not provide immense value to the user or that the user does not have the impression that they are doing it. Marketing and content must be matched out here that the user learns exactly and that these benefits also make sense for the user (often holds the developer a function is essential for the user would use them even for free). One should make sure that not only social media, newsletters and blogs are used for communication, and the free product should actually contain references to the several advantages of the pay version, so that the user does not even forgets what he actually missed.
. 6 Make payment as easy as possible
The transition from free to paid software model should run smooth and easy, big registration, payment and Installierungs hurdles should be largely avoided. In-Paid App Features should be booked for example, without additional 10 new windows and logins and the full version should not be made to work only by complicated uninstalling of the free software and then reinstall the payment software.
should Finally Never forget why you have developed the freeware, the freemium and the Demo and always ask the same time (and I know I am repeating myself here): why would I want to pay for the product
So easy this question also seems the answer to can lead eventually to rethink the business model, the product or marketing, but they will lead in all cases to the fact that providers their customers to know better and they can therefore successfully motivate them to purchase.
Remember that we have become so accustomed to it that we can get for free almost everything on the network, there must be information, transparency and especially the reasons why that does not work precisely. Convince users and convince especially yourself, because who does not believe in the pay model of his product and therefore prefer to bring a free version on the market, so that the customer will only pay attention at all, should think again exactly whether the product , marketing or audience not still needs some work.
For more information, tips and software offerings for the right sales approach to get the way our topics page CRM. Look Just drop:
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