Why Charging For Software Can Make Sense

Free trial versions are commonplace for business software, but is giving away your product the best idea? Charging even a small fee may result in a more committed user base.

That's the approach taken by customer service software provider Zendesk. While it does offer a basic free trial for its service, small companies can also sign up for a three-user licence which costs just $20 a year. That $20 is donated to a charity, so why does Zendesk do it?

"People don't necessarily appreciate free," Asia-Pacific managing director Michael Folmer Hansen told Lifehacker. "ZenDesk is a product where you need to have an experience. If it's free people don't care."

Not every developer would agree. "By giving a customer a free version, that gets them familiar and creates that relationship," said Vaughan Rowsell, CEO of POS software developer Vend. "Hopefully the small guy grows and becomes the medium-size guy. The idea is if they love your software, they will pay for it, but how are they going to learn to love your software without trying it?"

What's your take: go free and wide and hope people will upgrade, or charge a nominal sum to weed out rubberneckers? Tell us your thoughts in the comments.


Comments

    Angus I suggest you start reading articles on the Free Software Foundation website for example http://www.gnu.org/philosophy/shouldbefree.html if you want to understand free software since they have the right idea.

    The issue is that while free software can be just as good as paid they are still far behind commercial software which is why I use Microsoft or Apple solutions.

      But that has nothing to do with the article. The point is that if people pay $0, there's little to no appreciation for the value of the product. But if they pay $20, and the product is just as good as the free one, they feel as though they're getting $20 worth of software, and this makes them more likely to keep using it / support the company in the future.

      The $20 is even going to charity in this case, according to the article.

        I think whether having a 'mandatory donation' for the minimal version is a good or bad idea depends on a few things.
        If your goal is to get maximum exposure and have a bucketload of people fiddling around with your tool then free is good. It is inevitable that at least some people will be put off be even the smallest fee. Mind you, once you have a bunch of users you can potentially introduce an ongoing subscription. Some people will get annoyed and leave, but it is unclear that these people would ever have moved to a paid subscription so it probably doesn't matter. Some people will reflect on the value the product gives them, and be willing to pay that amount (maybe especially if it is going to charity).
        From a user support perspective, I imagine there are pros and cons to having money handed over as well. On a 'free tier' then people can't really expect the same level of support as they might expect having paid. However, even people on a free tier can complain about poor service and affect your reputation. Also, a 'free' tier may attract a crowd of whiny I-want-everything-for-free-and-will-never-pay crowd that you don't necessarily actually want: they are high maintenance, hard to please, and give basically no return on investment.

        This is pretty much consumer psychology: if someone has invested more in something, they are more likely to persist with it/value it. (Otherwise they'd have to admit that their money was wasted, which is always a bit uncomfortable).

      Note that "free beer" software isn't the same as "free speech" software. You can still charge for providing "free speech" software (although you probably need to provide the source code on request).

    Problem is, if the creator/seller of the software is unknown it becomes risky to spend $20 on something that possibly will not fulfill your requirement leading to another $20 or more spent trying to find the right fit. I don't know about you but I've bought a few apps that looked good but left me wanting. Now, if it's not a known brand/creator, I just won't buy it. And that's a sad thing as it reduces the competition and I may be missing out on something great. I'd suggest it would be better to have a 'forced donation' after a trial period if you decide to ditch the free software philosophy.

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