Making the Freemium Model Work for WordPress Products
I’m a big fan of the freemium pricing model for WordPress products. Time has shown that how effective the model really is and how, in some circumstances, it overshadows its “premium only” counterpart.
Understanding the Freemium Model
There are generally two types of freemium models used for WordPress products.
Traditional Freemium
This is oldest and most common type of freemium model used for WordPress products.
To implement this model you would release a free theme or plugin which has a direct up-sell path to a premium version of that product.
The free version often has a limited feature set and encourages you to upgrade to the premium version to unlock the full functionality and priority support.
Users tend to love this model as they have the opportunity of trying the product first without having to make any monetary commitment.
The general expectation is that the number users using the free version greatly exceeds the number of paying users.
This model has been implemented by a number of WordPress businesses including:
- Delicious Brains with WP Migrate DB & WP Migrate DB Pro.
- iThemes with iThemes Security & iThemes Security Pro.
Freeware 2.0/Ecosystem
This model is slightly less popular but has proven to be successful for certain vendors.
To clarify, the Freeware 2.0 and Ecosytem models are two separate models but are similar enough to be categorized together. The product is free forever and is fully featured but is monetized using slightly different methods.
- Freeware 2.0 Monetization occurs via the sale of first-party add-ons or extensions.
- Ecosystem Monetization occurs via a combination of first-party and third-party add-on or extension sales. The monetization of third-party add-ons usually occurs via a revenue sharing agreement similar to that of the iOS App Store.
To implement this model you would release a free theme or plugin which has a few genuinely compelling key features but also lacks a few niche features.
Users also tend to love this model as they’re able utilize the base product without having to make an initial outlay. Once they’ve familiarized themselves with the product they can decide whether or not to purchase additional extensions based on their needs.
This model has been implemented by a number of WordPress businesses including:
- Pippin Williamson with Easy Digital Downloads.
- Automattic with WooCommerce.
- WP Ninjas with Ninja Forms.
Hybrid
Whilst rare, there’s also a hybrid approach to the freemium model. This typically involves combining two or more variations of the various different freemium models.
Yoast has a great example of this with their Yoast SEO plugin. They have a direct upgrade path to a premium version of their plugin whilst also offering several niche extensions to the base plugin.
Benefits & Caveats
As with all things the freemium model has its advantages and disadvantages, though as an advocate of the model I believe it’s certainly worth considering for certain products.
Advantages
- The ability to publish the free version of the product on the WordPress.org theme/plugin repository. This establishes goodwill between your brand and the community and can increase your exposure.
- The ability to open source the code, allowing you to host your project on GitHub or Bitbucket. This allows other developers to contribute code, report bugs and request features.
- Low barrier of entry. Having a $0 cost product will generally attractive more eyeballs which may result in favourable tweets, blog articles and general word-of-mouth advertising for your brand and products.
- Compatible with the GPL license and the general WordPress ethos. You could argue that Automattic themselves implement the Freeware 2.0 freemium model with their offerings of WordPress extensions in Akismet, VaultPress, VideoPress etc.
Disadvantages
- Additional support. This may or may not be a burden depending on how and if you plan on implementing support for the free product.
- A risk of possible fewer conversions compared to a strictly premium model, though this really depends on a number of variables.
A Balancing Act
Perhaps the biggest consideration to make when implementing the freemium model for a WordPress product is deciding which features to include in the free version and which to reserve for the pro version or extensions.
Here are my recommendations for the free version:
- Fully functional (barring “pro” only features.)
- No time limits.
- Minimal unobtrusive nag screens and upsell sections.
- Include a email capture form offering a discount on the pro version / extensions.
- Include clean unobtrusive social sharing buttons.
- Leverage social proof.
- Prompt the user to rate your product on the WordPress.org repo if they enjoy using it.
- Respect the WordPress.org theme and plugin guidelines.
And a few recommendations for the premium version and extensions:
- Offer theme and plugin updates via the WordPress update system (do not force users to download updates via your website).
- Unobtrusive upsells or cross-sells.
- Priority support.
- Easy access to renewals, upgrades, invoices, help documents etc.
Implementing the Freemium Model
One of the most time intensive aspects of starting a WordPress product business is setting up the infrastructure to sell your products.
This usually includes:
- Setting up an ecommerce website and PCI compliant payment gateway.
- Configuring taxes and EU VAT.
- Creating a refund policy and refund processing system.
- Configuring invoicing / receipts.
- Creating a licensing system that provisions license keys and manages site-based activation limits.
- Setting up a support system.
- Creating a plugin / theme update system that plays nicely with both the free and pro versions of your product.
Luckily for us there’s a product that handles most of the heavy lifting for us. Freemius provides a WordPress SDK that enables you to get your products to market faster.
They describe their system as:
A complete payments, licensing and auto-updates solution to sell your freemium plugin from within the comfort of the WordPress admin dashboard — setup takes minutes.
Last year Delicious Brains published a comprehensive review of Freemius which is well worth reading if you want a comprehensive overview of the system.
What are your thoughts on the freemium pricing model for WordPress products? I’d love to hear what you think in the comment section below.
Note: this article was originally published at my now defunct WordPress website. You’re seeing it here because I thought it deserved a new home.
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