Pricing Tips
Pricing Tips

Tip 15: Overages

Unexpected charges or unrequested upgrades can jeopardize customer satisfaction and loyalty.

In this episode, our experts discuss the delicate topic of overages and explore how offering grace periods in certain situations can foster goodwill and build long-lasting customer relationships. Learn how to identify when a grace period is appropriate, communicate effectively with your customers, and strike a balance between enforcing overage fees and nurturing loyalty. With practical tips and real-life examples, this episode will help you navigate overages with compassion and flexibility while maintaining a profitable business.

Welcome to 20 days of pricing tips—part 15. I’m Charlie a member of the pricing team and I’ve worked on over 36 pricing projects with Price Intelligently clients. Today we're talking Freemium models.

Have you heard of "Freemium"? It's one of our favorites. "Freemium" is a combination of free + premium, and it represents one of our core strategic recommendations when it comes to pricing optimization.

Let's start by talking about what it means, and we'll dig into 3 reasons why you should consider it. A "freemium" product or service can be offered for free but ramps up to include premium features that cost money. The "free" part here is fundamental to why this model is so successful. By giving a "lite" version of your product/service away, you can 1) entice early adopters and 2) get users into your ecosystem and on the path to upsell or cross-sell.

At its core, freemium is a marketing and customer acquisition strategy. If you can accept that your Freemium strategy might show losses in its early days, you should know that it can pay dividends in the long-run as you win over some of your early adopters as remunerative, valuable customers for life, with lower CAC to boot.

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