Converting a Free Product to a For-Pay Model

By Christina Suter on Apr 16, 2015 at 02:02 PM in Business Issues
Converting a Free Product to a For-Pay Model

I had a client who was writing a newsletter and wanted to take it from something he offered for free to something he charged people for.

I came across an article by Bree Willimans of smart and the following 7-steps are what recommends and are augmented by me:

1. Give customers access to the item for free for a while. Ease people in, but let them know that soon it will be available for a price. Give them at least 3 months before the shift happens so they can ask questions and prepare.

Get them to register for the information so you can have their contact information. You want to be able to send an email saying that you’ve switched to the for-pay model. Also, if they don’t buy, you can send them a reminder in 6 months and re-invite them to join.

You want to be able to build your list because a lot of visitors to your site are anonymous users, so you don’t have access to them. Having access to them helps you to build a relationship with them, relationship marketing.

2. People enjoy the idea of exclusivity. While I don’t find benefit in that, I do appreciate being awarded for my loyalty. Mention exclusivity, but don’t make it the focus unless you offer a luxury item. Offer them quality, exclusive people like a clean relationship so when they pay, offer them a good item.

3. Differentiate the new from the old. People want a sense of old and new, they want to transition with you. No one wants to pay you for what they were already getting for free. So, create a new site, or redesign your old site, and show them that there’s something good, better, or different. This says to your customers that you’ve committed to a better product. Focus on what they will get, and why it’s worth investing it. Give a clear reason as to why you are now charging and what they get out of it.

4. Reframe the pricing. Comparison price against things they’re already used to paying for at the same price. Compare the value of their everyday cup of coffee to your product. Make the price easy on the checkbook and more people will have less reason not to buy.

5. Decoys- give great value and throwing something in for free. Add the price of the new for-pay item in with a product or service you’re already charging them for like a processing fee or application fee; bulk packaging.

6. Don’t bang on about it- don’t remind people that they’re paying for it all the time. Explain the fee structure once and let it go. If they have questions, answer them, but don’t bring it up all the time.

7. Force paywall- guilt people into paying. Make some things free and others make them cost and capitalize on their guilt. The Wall Street Journal for example offers the first paragraph for free and then you have to pay to read the rest. After people read a few first paragraphs, they’ll want to pay for the rest.

8* (Bonus)- When you convert from free to for-pay, you’re shifting from a social to commercial contract, and that shift happens, people will have expectations. If you’re giving away something for free, people think it’s not valuable, but they still feel guilty. When people pay they commit to you for the value you charge.