How To Transition From A Free To A Paid Service

[webtickle]

http://techcrunch.com/2010/06/13/free-to-paid-tips/

[daryn]

I work at TeachStreet, and this has been a really dramatic change for us. By thinking through the transition and being as transparent as possible with our users throughout the process, it has worked out as least as well as any of us could have hoped.

Go checkout the article!

[rishi → daryn]

Awesome article. We will be killing off our free plan soon. This helped a lot.

[daveschappell → rishi]

Thanks, Rishi -- and, I just checked out FlyingCart.com (saw you mention it in your HN About Me section). Looks great. Do you white label that for other sites, too?

[rishi → daveschappell]

Thanks. Yes you can white label the store easily. Just use a custom domain.

[randfish]

Really like seeing stories like this shared in such a transparent fashion. I wish there were more case studies from inside.

I will say that when we transitioned from free to paid, there was a little bit of negative feedback, but I agree with the article that the overwhelming majority of feedback was positive and supportive. It also enabled us to do much more remarkable things than what we did previously :-)

[blantonl]

An outstanding article. However, I'd love to understand further the business dynamics of handling a price increase for a service.

Five years ago I somewhat went through the same scenario..except we went from a donation model to a subscription model.

Now it is time to evaluate a price increase and up against a five year established price I'm curious as to how it has been handled in the past.

[daveschappell → blantonl]

I think the most of the tips apply to price increases as well. Most of your loyal customers will understand that prices go up over time, but if you communicate with them and explain the changes, offer some grandfather'd benefits, etc. etc you'll find that many will make the transition with you, especially if it's gradual.

[Groxx]

4) Provide Grandfather’d Pricing for long-time customers, or give them exclusive benefits

Something which seems to be missed by nearly every cell, internet, electronic, etc. company in existence. You'd think you'd want to keep customers, not just incentivize new ones.

[derefr → Groxx]

It's a problem with the division of strategy throughout a company. The job of sales is to turn people who don't pay into people who do. They have no incentive to keep current customers; in fact, it's sort of the opposite—every customer that quits, and then comes back later, counts as a new sale.

[gbolan]

Great idea to find other "currencies" from your clients/suppliers. What about the idea of having teachers provide you with free classes as their way of paying? You could then turn those freebies into promos/giveaways, etc..

[daveschappell → gbolan]

The problem with teacher paying with free classes is that many of the free classes are just ways to get a first meeting with a customer. And then future transactions between the student and the teacher happen without TeachStreet being part of them. But, we're experimenting with some ideas in this space (helping teachers to offer promotional pricing, with additional featuring on TeachStreet.com itself).