Paid Up Front: Two Perspectives to Make this Business Model Work to Your Advantage
I found an interesting connection between two articles about paid up front apps, and how this paywall can work to your advantage in two ways by separating the ap user’s population into two groups, prospects and paying custoemrs:
- Reduce the support volume, because far less people will be using your app compared to freemium.
- Learn from prospects (and increase conversion) by supplying a free-to-download variant to them.
I never thought about the effect of paywalls on support email volume until Jordan Morgan launched his app Spend Stack the other day and now published an interesting argument pro paid up front pricing. Paid up front will limit your user base a lot compared to free-to-download/freemium, that’s true, but you’ll have a far lower volume of support emails, and you will only get emails from paying customers. Jordan receives 10–15 emails/day at 500 downloads/day right after launch. If you think freemium will increase downloads tenfold to 5000/day, he would also have to deal with hundreds of emails!
Of course paying customers will be more likely to interact with the developer than people casually browsing the App Store to download any free app. So Jordan might not get 100–150 emails/day, but still he will get more. Success results in more inquiries which suck away at your hours. Will you respond to less emails in return? Is it okay for you to talk less to paying customers because non-paying users also end up in the same inbox?
There’s value in numbers, though: if you want to tailor an app according to user feedback, you will want more and not less emails. There’s at least one way I know to make this work. Separate paying from non-paying users, gather feedback, and treat your paying customers with care by installing a paywall as a filter, but then target the folks outside your paywall, too.
A piece by Joe Allen I wrote more about in 2016 gives away the details: In short, Joe Allen launches free versions of his app concept to gather lots of user feedback. People will tell you the killer features that need to be added to the app eventually. You could even split the initial concept into multiple laser-focused apps and sell them individually, at “pro pricing”. Market the resulting app to the folks that showed interest, got in touch, or subscribed to your mailing list. Then you could also end up with a great launch day1, with pre-orders and tons of people who you know will be interested in the result. This approach required preparation, and you will want to make getting in touch with you as easy as possible to (1) gather feedback, and (2) get user contact details to send them the app launch notices.
When you frame an increase of user feedback for free downloads not as cost but as an opportunity, you can split the population in two with a paywall and target them separately . In short, you can make use of the increased volume of support email if your strategy incorporates building a product based on user feedback – it’s the same cause-and-effect chain Jordan describes, but focuses on the upsides of getting in touch of users that have not paid for your app (yet). This is not a given. There’s plenty of reason not to listen to what users say they want. But that’s not the point of this post today.
To summarize, the paywall of paid up front pricing works to your advantage in multiple ways:
The paywall will leave you in touch with customers – not just users of a free version of your app. You want to take care of these fine folks. The paywall thus reduces your support volume (and the volume of 1-star reviews of people who don’t seem to get what your app is about; you know the kind of review I’m talking about). Jordan has a point: you want to treat customers with care, so being able to focus on them is important.
Outside the paywall, there’s far more people. They haven’t paid for your app (yet). Treat them like potential customers: Try not to end up framing the anonymous masses as a bunch of evil and/or dumb folk who want to ruin your business. I understand why some devs get frustrated, and there sure are trolls in the wild. It’s true that a lot of the world’s overall population is not your target audience. It’s both in your and your user’s interest to know if your app is a good fit. The paywall is your filter, and it’s your job to help people figure out if they want to pass the filter or not. You can work with the folks outside your paywall, generate interest, and find out what they really want from an app like yours. To get there, I think it’s clever to release a free variant of your app like Joe does.
In the end, your paid customers will receive the premium support they deserve, and you can tackle feedback by user of the free versions at a different pace (if you feel inclined to respond to all of them at all, that is). You will be able to learn from both paying customers and non-paying but potentially interested users.
I don’t want to emphasize the importance of a good launch here. It’s probably an important factor to get off quickly, but it’s not the only thing that matters. Are you in the indie app business for the long haul, or is this just a one-off project? ↩