Do MSPs Need Freemium Strategies for 2011?
Freemium isn’t a new concept: Get customers hooked on something free, then provide something of high value that triggers customers to switch from free to paid services. It sounds so easy. But plenty of freemium strategies implode. Still, some MSP software providers have freemium offers for channel partners. My question: Should MSPs emulate the freemium strategy with end-customers — and if so, how?
The seeds for this blog entry were planted earlier this week, when Naverisk — a New Zealand-based MSP software provider — disclosed plans for a U.S. push, which includes a freemium effort. And for the past 14 months or so, N-able Technologies has been promoting freemium endpoint security. Meanwhile, some RMM (remote monitoring and management) software companies are giving first-time customers free Autotask Go subscriptions (a limited-time offer). I’ve called that a freemium approach, but critics tell me otherwise.
Creative Steps Toward Market Growth
Either way the trend is clear: MSP software companies are working very hard to lower the barrier to entry for VARs and MSPs. Will channel partners, in turn, take similar steps with their end customers?
About a year ago, I recall MSP coach Stuart Selbst suggesting that MSPs may someday give away remote monitoring services to their end customers. At the time I thought Selbst was crazy. Now, I’m rethinking my stance.
In some cases some MSP services really are free. For instance, I hear from numerous MSPs that offer free VIP and free concierge services to CEOs who have home IT needs. You know: Your most prized customer has a spouse and kids with about a dozen IP endpoints in the house — iPads, notebooks, PCs, printers. Manage that at-home stuff for free, and you’ll keep that CEO’s business forever, or so the theory goes. Not exactly a freemium strategy but it can help to pay the bills.
What else will go free? I’m not sure. I can’t imagine patch management remaining a paid standalone service for too muich longer — especially as SaaS applications begin to replace on-premise servers. Also, as more and more small business owners use iPads and other specialize devices, they’ll expect a well-patched system to just be part of day-to-day business.
Either way, MSPs would be wise to check out a Freemium Guide written by 16 Ventures, which helps SaaS companies develop their recurring revenue strategies. The guide highlights five freemium business models. I wonder if any of those models apply to your business.
I’m certainly not suggesting that you give away your high-value services. But the idea of getting your foot in the door with some sort of freemium offer has caught on with numerous MSP software providers. We’ll be watching to see if MSPs adopt similar strategies when dealing with end-customers.