Willing to pay a Freemium?
Thursday, August 12, 2010 at 1:38PM Like a lot of businesses, we use Hootsuite to manage several Twitter accounts.
It has a lot of advantages over the Twitter web interface including the ability to pipe RSS feeds to your Twitter stream and allow multiple team members to collaborate in managing the accounts.
However, Hootsuite is now "going Freemium". Basic accounts will still be free, but the enterprise features such as multiple RSS feeds and team members will command a price.
The damage ranges from $4.99 per month for a package which allows multiple RSS feeds up to a truly eye-watering $1,499 per month for the enterprise package which allows you to have more than eight team members and various other goodies.
This has been on the cards for a while (after all Hootsuite were always going to need some kind of revenue stream) and the "Freemium" model is hardly revolutionary any more. Indeed, it seems likely to make increasing inroads into the legal market (see for example the recent Law Society Gazette article on whether the Freemium model could work in legal services).
However, I wonder how small businesses who use Twitter will react? Ning came in for a lot of flack from users when it decided to start charging earlier in the year and a couple of groups of which I am a member decided to relocate as a result. Will the same thing happen with Hootsuite..? after all it is a lot easier to move Twitter clients than to migrate a Ning group.
I have a gut feeling that 'Freemium' seems more attractive when you sign up for it at the start... and less so when it suddenly means paying for something which you have got used to using for free.
On the other hand, Hootsuite have to make money and you could argue that $50 per month is nothing compared to the benefits your business reaps from having access to an enterprise-grade tool to manage your Twitter presence.
What do you think? Are you going to move to a paid Hootsuite account or do you think this will lead to a mass exodus of business users?
Reader Comments (4)
Interesting post.
Is the issue really about how we have all become used to free?
Real question now is how serious are you about social media for your business? Serious enough to invest? Serious enough to invest to get ahead of your competitors? I anticipate a 'shake out.' Huge opportunities for the firms who invest, (with a plan), and steals a march on late comers.
The 'cost' will always be relative to the 'return.'
Is $90 expensive if it generates $500 profit? That looks like good value to me.
Thin end of the wedge; most things have a price and that price is largely, (although not entirely), dictated by the value it offers. You can only appreciate value if you understand it.
As with all things we will refine and match the appropriate solution to our need.
I can't criticise Hootsuite for charging for their service, but I think they might have miscalculated in the way they have gone about this. As I understand it, existing users have one week's notice before having to opt for a paid account, then getting one month's free trial of that paid account. We are going from free (with no stated intention to charge) to paid accounts in just over a month.
The paid accounts are not cheap. Apart from the pricey enterprise edition, the ones that are of use to anything more than a one or two person business are $49 and $99 per month.
The price will make me look elsewhere, and the short notice means I'm going to be looking now, rather than drifting into a paid account.
Freemium is all very well, but you have to be very careful in managing existing customers, particularly where your service is not unique and there are other completely free alternatives.
I have often wondered how companies that provide us with free services like HootSuite can survive without charging. Obviously they can't and at some point they have to find a way to pay their way. The same is, of course, true of Twitter itself. In principle therefore I don't have a problem in paying a reasonable price for a service that I find useful especially if better than the available cheaper or free alternatives.
I have used HootSuite since its very early days and am unsure if I would find an alternative that suits my needs as well as it does. I have never tried TweetDeck and whilst that may be an alternative it can only be a matter of time before they start charging as well.
For me I think I would have been happier with a charge per Team Member. On the basis of what the account tiers are this would in effect equate to $10 per Team Member. Thus 2 Team Members would be $29.99 and 3 Team Members would be $39.99 rather than having to pay say $49.99 for 2 Team Members. The jump from free to $49.99 or $99.99, not to mention $1499 or $1998, per month is quite a leap.
As Laurie says we are not being given much time to decide what to do (that is no doubt by design - to give us less chance to switch providers). I will ponder my options but possibly those will be fairly limited and I will end up going for Gold. Perhaps as Jon (Busby) says that will turn out to be good value for me.
Some interesting responses.
I still think it is about a value decision. And if you cannot justify a value do not buy.
Of course you can move to other providers. But then you need to weigh up all the knock on costs, (signing up, educating, learning as well as the data you may have lost from leaving), and it may actually end up being counter productive.
I think a more valid discussion is around the lack of warning, 30 days would have been more considerate in my book.
Interesting though that lawyers kind of do 'freemium' anyhow...that 30-60 minutes of free initial advice, listen to what I say, decide what to do next is a variation of freemium.
There will always be a 'free' option but to get value you have to pay.