Why Freemium Doesn't Work

[thomthom]

Came across a SlashDot article today:

http://slashdot.org/story/12/01/05/0333258/why-freemium-doesnt-work?utm_source=feedburnerGoogle+International&utm_medium=feed&utm_campaign=Feed%3A+Slashdot%2Fslashdot+%28Slashdot%29&utm_content=Google+International

Interesting quote:

@unknownuser said:

He also discovered that non-paying customers are more demanding than paying customers

Linking to another article:
"Developer declares 'I am done with the Freemium Business Model'"
http://www.itworld.com/cloud-computing/237699/developer-declares-i-am-done-freemium-business-model

[Marian]

@unknownuser said:

Results? Nichols found free customers are higher maintenance and more demanding than the paying customers. 20 or so paying customers asked questions while "hundreds" of free ones did.

Of course....because they were more.

[EscapeArtist]

The answer would seem to be apparent to me. A paying customer has hopefully done due diligence before picking a service or product that requires a financial expenditure. You know what you are buying, and don't expect the product to suddenly morph to suit your needs (though my experience with my airline job seems to contradict that quite often).

Customers seeking free stuff seem to feel entitled to that product, and entitled to complain about what they don't like.

There were two homeless guys sitting in a La Madeleine restaurant, it was around 25F outside and they looked to be having a particularly bad day. They were holding on to some empty to-go paper coffe cups so they wouldn't be evicted. They asked for change. I don't give money to homeless if I can help it, probably would go to booze. I said no, but I'll get you some food. I did, came back with two full breakfasts. Know what they said?

"Where's the coffee?"

[chrisglasier]

I see this free business as a way to create new business activities for yourself.

An off-the-wall example - if you wanted to get into publishing (a very long time ago) you would have needed to invent the alphabet or suchlike. Obviously, you could not charge for this at the beginning because no one had any idea what to do with it nor later because it had already been freely copied and integrated.

But it had served your initial purpose establishing your name and fame in the new highly competitive and expanding market you created.

Like Ford or Kodak perhaps.

Moreover always one step ahead you were able to invent new-alphabet based ventures that people were only too happy to pay for.

Isn't this what Google are doing with free search and advertising. Could this be the basis for free Sketchup - models as the means of communication. The new hieroglyphs?

This pay-for premium services is all well and good but rather weak-kneed - a bit of a side show really.

PS great 'where's the coffee story'!