Igniting Your SaaS Cloud Sales

SaaS Freemium Business Model Overview

Revital Libfrand, Co-founder, Ignite Cloudware

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What is Freemium ?

Freemium is a business model based on the concept where the company give a limited version of its core product away for free and sell premium products or services The freemium model is used in several variation both for B2B & B2C Examples:

Skype Provides free Skype-to-

Skype calls

Sell other calls type (landline,

voicemail, mobile etc)

Gmail service for businesses provided for free up to 10

users

Sell additional mail users &

storage

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Types of Freemium Model

Capacity based Freemium

Get limited capacity

(usage, # of users etc) for

free, additional capacity requires payment

Feature based Freemium

Get limited features for

free, additional features requires

upgrade to premium version

Get Ads Freemium

Get free sw access license

with Ads;

Removing Ads requires payment

Use case based Freemium

Free access based on usage i.e

Developer free license,

Non commercial

use free license etc

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What companies wish to achieve with Freemium Model ?

• Gain large volume of users easily • Brand awareness • Generate product attention so free users will convert into

paid customers • Gain community of product fans so free users will attract

paying customers

The Product is the Core ! Great, flexible & quality product that people want & love is the most important condition for creating a successful freemium model

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- Suit mainly B2B

- Consumer is exposed to all features from day one

- Conversion to premium is easier from consumer perception as the product is already adopted.

Capacity Based Freemium

Capacity Based Freemium -Highlights

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- Suit both B2B & B2C

- Limited version must provide true benefit to consumer to avoid churn

- Upgrade to premium is not trivial from consumer perception as it requires users new adaptation process

Feature Based Freemium

Feature Based Freemium -Highlights

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- Suit both B2B & B2C

- Consumer is exposed to all features from day one

- Conversion to Premium is done to remove vendor watermark or remove sponsored Ads

Get Ads Freemium

Get Ad Freemium -Highlights

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- This model is used to enable users adopt product in certain environment (developer, non-commercial, students etc) so once they become decision makers they will be more likely to pay for the software

Use case Based Freemium

Use Case Based Freemium -Highlights

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Is Freemium the right business model for me?

Ask yourself these questions: • Does my product adoption requires any

assistance? • Who are my ideal customers? is

freemium right for them? • Does the marginal cost of freemium

user is close to 0 with your product? • Is freemium right for you (does the

math works for you)?

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If you plan Freemium to Premium….

SMBs may never reach the paying level and vendor should consider the cost of free users

Vendor must communicate to Consumers the benefit of the additional features and their ROI

Consumer learned to get alone in Ads environment

Ensure the Ads revenue model works for their product

Challenge to properly monitor consumers’ usage

Take into consideration the following challenges in conversion process…..

Feature Based

Capacity Based

Get Ads

Use Case

Are you struggling what is the preferred Freemium to Premium model suitable for your product?

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Go-To-Market Plan

• Product –targeted sector, geography, integration & implementation issues, on-going support

• Pricing- MRR/YRR/Freemium model • Promotion – sales strategy, online marketing promotion

strategy • Place – company website, social networks, professional blogs

and websites.

Product Pricing Promotion Place Go To

Market Plan

Ignite Cloudware Provides wide Sales & Marketing services to SaaS vendors. Our Go-to-Market plan in a nutshell :

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Ask me how to build a successful go-to-market plan for your SaaS business

www.ignitecloudware.com

+972-72-2116601

revital@ignitecloudware.com