How Startups Can Maximize Conversions With Free-Tier Pricing

Done right, free tiers can act like quicksand to keep customers with you

Don’t put a free tier or free trial on your website arbitrarily. You’ll lose a ton of money.

I’ve seen and even built too many of these money-wasting free-tier offerings, and they can come from first-time founders and multi-million-dollar companies alike. These free tiers and trials fail the company for a lot of different reasons, but mostly because they never bring the customer prospect closer to recognizing the value of the product. In some cases, the free tier even pushes the prospect away from conversion.

It’s an easy mistake to make. Conventional wisdom tells entrepreneurs that if their product and business model is something brand new, customer prospects are going to need time and education to figure out how to make themselves successful with it. So why not open the doors and let them kick the tires?

Sure, that’s logical. But in a lot of cases, I’ve found that it’s harder to convert a prospect from free to paid than it is to convert a prospect from nothing to paid.

What I’ve learned is: If you’re going to have a free tier or free trial, you have to make it work like quicksand in the customer funnel. That is, keep…