Watch our on-demand webinar, Tackling Digital Product Management, Part 4: Pricing the Flavors of “Free”, to learn more in-depth about product-led growth pricing models.
My Recent “Free” Experience
“Sorry, you’ve used up your free articles for this month. But don’t worry! As you clearly value quality news, click here to unlock unlimited access to the best news coverage in the world.”
This is the similar verbiage that popped up on the New York Times site when I reached my maximum “free” limit. I read that notice exactly one time before taking action and upgrading to a paid digital subscription.
The conversion from “free” to happily paying
You see, I’m a news addict. I start each day by snacking on whatever fresh-baked global, national, and local news has been served up. A lot has changed in the news business since the hardcopy The Times used to plop in my driveway each morning: the packaging, the pricing, and of course, the news cycle itself. What hasn’t changed is the value I get from the content. And so, I renew each subscription period, by clicking a button in the app. I haven’t had to respond to another NYTimes ad, phone call, or solicitation of any kind, since then.
When traditional newspaper advertising began drying up a quarter-century ago, so did many long-established newspapers. This market force, combined with the emergence of many new sources for 24/7, free online news, provided a true strategic inflection point (SIP) for the folks running the newsrooms and presses.
A Successful Product-Led Growth Strategy
Companies drive growth through product-led efforts
In the past year, I’ve written and presented on how to achieve Product-Led Growth (PLG) and the overall rise in importance of digital product management. If you don’t recall the essentials, it is simply this: Product-Led Growth refers to a model that uses your product and your users as the primary mechanism to drive growth.
Two key components to a great PLG strategy are how we attract new users, and how we price our product
How can we entice people to become users, and those users to then become paying customers? Not surprisingly, it’s all about value: what customers “get” and what they have to “give,” in exchange. Closely linked to any discussion on value is the vital discussion of Pricing. So, let’s talk about a simple, yet powerful, pricing concept: “free.” “Free” and “no strings attached” are promises we have all heard as consumers. Come on, admit it: the offer of “free” often gets us to consider, evaluate, and ultimately buy something new.
NY Times for the (digital) win
Decades before the term PLG was coined, the NY Times, in its crisis, learned they needed to become product-led—or perish. So, they let their high-quality product do the talking. They gave prospects a little “taste” (like your local ice cream shop) to convince their browsers to become buyers. As a result, the Times not only survived the digital transformation of their business, they thrived: By 2019, they had doubled their digital revenue over a mere four years and their stock price had more than tripled.
The Times faced a myriad of questions to answer:
- Who are we selling to and how do we deliver value to them?
- What about other potential buyers beyond them?
- Where does each value delivery/pricing approach fit best?
- How much do we give away “free” and where do we put our paywall?
And, “free” itself comes in different varieties: so-called Freemium (free-forever), Free Trials, and the like. The answers to these questions must be informed by continuous, rigorous experimentation.
Get Advice From the Experts
We discuss more in our webinar how today’s leading SaaS providers think about PLG and “free” pricing. We touched on what experiments they run and the outcomes they have achieved. Learn more in the recording from Chris Seidell, VP of Product Management (Growth) at Survey Monkey, Kyle Power, Partner, Expansion Platform, at Open View Partners, and I in an exciting discussion on: Tackling Digital Product Management, Part 4: Pricing the Flavors of “Free.” You’ll learn how to use PLG pricing techniques to give before you get and watch the leads pour in.
