Where Real Estate Gets Its Dirt

More on Freemiums

Sarah Needleman and Angus Loten from WSJ: When Freemiums Fail

“The freemium approach doesn’t make sense for any business that can’t eventually reach millions of users. Typically only 1% or 2% of users will upgrade to a paid product, said David Cohen, founder and CEO of TechStars, a start-up accelerator since 2007 with five U.S. locations.”

Great article on why smaller businesses should forget the freemium hype and get money right away.

  1. Greg, what do you think of the model where the MLS licenses the “light” version and there’s an up-sell / upgrade path for subscribers? This could approach freemium depending on the license, but as the “light” version license goes up, it should reach a point where the article doesn’t apply, right?

  2. I agree, the money must come from somewhere.

    Even freemiums have customer acquisition and support costs – and they can be very high in real estate. The core real estate professional leans more toward being a laggard than an early adopter on the product adoption curve. Understanding this is fundamental to successful marketing to agents. I am sympathetic toward companies that use freemiums to overcome the cost barrier and drive better adoption (See ListingBook). Freemiums are also a great way to enter into a saturated marketplace (See DotLoop)

    My favorite go to market strategy is the 90 days free program for companies that have great products. Once the agent has some success, they will hold on forever. (See Cartavi)

  3. @Matt Not sure I’m understanding you. Are you saying the MLS might do a site license once the contract is up and the agent adoption is high?

  4. No, more that an MLS might pay for a ‘lite’ site license to get things started, then there would be up-sells. Think of it as something between freemium and full site license? Just a thought.

  5. @Matt I see what you are saying. That might work, but what I see most often is sometimes the MLS leverage access to their data in return “lite” product, and not pay any out of pocket money.

    We have a Cloud CMA Lite product, that we intentionally bury on our plans and pricing landing page. I just checked our stats and we are averaging an 8% conversion rate.

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