Create an account to save sources and durable progress.
A Smart Bear · Jason Cohen
articleprincipleSource excerpt
About A Smart BearFreemium means high costs, low conversion, and customer feedback dominated by the non-ideal customer. Treat it as a marketing expense to ensure ROI.
This is a limited feed-provided excerpt, not the full original work.
Apollo layer
Treat a free tier as a paid acquisition channel, not a default product model. Assign its support and infrastructure costs to marketing, then judge it by the qualified customers and paid revenue it produces.
Freemium can consume resources while attracting feedback from users who are unlikely to buy. Measuring it as marketing spend forces clearer ROI decisions and protects product priorities from being shaped by the wrong audience.
Calculate your free tier’s fully loaded monthly cost, free-to-paid conversion rate, and resulting acquisition cost. What usage limits or targeting changes would make its return competitive with your other growth channels?
Private notes
© Apollo Advisors° ABN 34 346 108 139