7 Tips for Successfully Introducing Freemium Business Software Making a profit on a new software business solution requires successfully giving away the basic version.

By John Boitnott

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Software solutions providers face an ongoing challenge in an increasingly-competitive marketplace. How do they get the word out about the tools they offer? This is especially true of B2B software companies, since they have to actively convince businesses that they can help improve their operations.

One of the best ways for software providers to win over businesses is to show company leaders what your tool can do for them. Through offering a premium version of your product, you can easily lure customers away from competitors. Some of the top software companies in business today use freemium models to engage customers. Here are a few tips to help you make it work for you.

1. Make it easy.

The first step any software provider should take is to have a website with clear installation instructions. Make sure download links are easy to find and that customers can quickly locate your pricing plans. Offer side-by-side comparisons, demonstrating what extra features come with your various paid plans. The hope is that businesses that first sign up for the free plan will soon see the many benefits of paying a small monthly amount to access more advanced features. Only once you've set up your website should you begin the process of marketing your business to your target audience.

Related: 4 Questions to Help You Price Your App in a 'Freemium' World

2. Know your market.

One critical mistake many brands make is in failing to truly get to know their target market before they begin the marketing process. Don't skip the market research portion of developing and promoting your software. Learn as much as possible about the businesses you're targeting and ensure your efforts meet their specific needs. Over time, you'll begin to refine what you know about the customers who choose your freemium plans and this will help determine what you need to do to convert them to paid plans.

Related: Get to Know Your Customers, and Get Your Marketing Back on Track

3. Target the influencers.

Instead of offering freemium plans across the board, you could save money by simply targeting those who have the most influence within an industry. Educational software providers often target teachers and administrators with a platform designed for them, realizing the influence they have over their students. Consider those within a field who have a wide reach and offer your freemium version to them in the hopes they'll like it and recommend it to others.

Related: Influencer Marketing Tips From a College Student With a 250 Million Follower Reach

4. Conduct a survey.

Surveys can be used in a variety of ways to get the word out, especially if you're doing B2B marketing. Create a survey with a few easy-to-answer questions that you require customers to complete before they download the free version of your product. Your survey should generate the information your company needs to convert freemium customers to paid subscribers. This may not even be information you act on immediately, but the results could color your future decisions regarding making your paid options more attractive.

Related: How to Ask Survey Questions for Maximum Marketing Benefit

5. Make upgrades compelling.

Some of the most successful freemium offerings make converting to paid plans a natural progression. In some cases, this means giving a certain number of transactions in the free version. A business that uses free invoicing software, for instance, will find that as its client base grows, upgrading to a plan that allows them to invoice more clients is only natural. The notice that they've run out of the number of clients they can add can serve as a prompt that it's a good time to upgrade.

Related: 5 Premium Tech Upgrades That Will Give You Geek Envy

6. Evaluate success.

When you're giving your software away, it's crucial to evaluate the results your freemium model is bringing. Year after year, pull data on the number of customers who convert from a free plan to a paid subscription. Also determine if there are other benefits from offering a free plan, such as extra social media referrals. If your freemium customers are bringing other people to you who eventually become paid customers, it may not matter that they never convert to premium plans.

Related: 5 Growth-Hacking Secrets for Your SaaS Business

7. Offer discounts

Occasionally, offer a discount on your paid plans to attract customers who may have already been thinking about switching. If there's a deadline on the offer, those customers may rush to sign up while they can get it at the reduced price. You can also try granting one free month of the premium version of your software to show customers what they're missing on the free version.

For B2B software providers, freemium plans can be a great way to win new customers and generate buzz about their products. However, it's important to come up with a way to convert free customers to paid plans within a certain timeframe. In doing so, you'll be able to win at marketing while still generating cash flow.

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John Boitnott

Entrepreneur Leadership Network VIP

Journalist, Digital Media Consultant and Investor

John Boitnott is a longtime digital media consultant and journalist living in San Francisco. He's written for Venturebeat, USA Today and FastCompany.

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