TLDR – The title says it all. This is not scattershot approach of freemium.
My all time popular article – most read, tweeted, commented – is the one on Freemium I wrote for Gigaom. That article begins with a quote from Christian Vanek, CEO of Boulder based SurveyGizmo. I will always have a soft corner for SurveryGizmo because it is from my adopted hometown of Boulder. And it is an amazing survey tool with great UX.
Three years ago, in my telephone interview Christian shared this with me (I encourage you to read the full interview as it shows how transparent and forward is Christian in his thinking)
“We are now seeing the end of the freemium model — signing up users for free and trying to upsell,”
SurveyGizmo knows pricing is not static and it needs to constantly iterate to align with changing customer mix and needs. Yesterday they announced a free version that has no limits on questions and responses. What does this mean to its stated segmentation strategy? Is freemium back? I did not get to talk to Christian on this but I posit this is not fall back to scattershot approach of freemium but a carefully chosen pricing strategy to account for change in customer mix.
Here is a view of what its current pricing looks like.
In addition to a free version there are now 3 versions. Contrast that to their single pricing option they had in the past.
And prior to that the choice of three versions.
Now it may appear they are not only back to where they started but also introduced a free version which could be seen as adoption of freemium.
Here is why I believe they did it and why it makes sense
- There is abundance of general purpose survey tools for casual users – hobbyists, bloggers and the rest. You cannot compete for this category nor can you expect them to pay.
- Casual users are not conducting a rigorous marketing research but are simply collecting some data and writing it up.
- Most surveys by casual users have less than 3 to 12 questions. So offering unlimited questions is a no brainer choice.
- Most surveys get fewer than 500 responses. For a carefully designed survey that does random sampling of its target population that is more than enough.
- Will these casual users ever become paying customers? Highly unlikely but the cost to serve them is almost nothing and there is value in using them as test subjects for many new experiments and product features.
- Serious users start with a decision problem, conduct exploratory step to build hypothesis to test then conduct a meticulous survey. These users need more sophistication from the tool.
- All the feature that serious users value – input error checking, adding logic and control to the flow, rules etc. – are available only in the next tier.
- Of these serious users who is willing to pay for a superior survey design, there is a certain class that is satisfied with basic support while another that is willing to pay for faster and better support experience. For the second class there is a premium priced version at $85.
Overall I believe this is pricing done right based on customer segmentation. The goal is not to get bunch of free customers and hope they will upgrade but to keep SurveyGizmo in the consideration set for many serious users by increasing its awareness among all users.