Freemium Support – Is it happening to you?

Thank you to Rosanne Sax for suggesting this topic.

Do you have a freemium business model and you don’t know it? Freemium refers to models that provide some free basic service, but charges a premium for advanced features. Freemium is much more common than we think — and you may find that your support organization is in fact operating under a freemium model without your being aware of it.

Here are three common examples:

• Providing free support for trials or evaluations while charging for post-sales support
• Giving free access to self-service support, including a moderated community, but charging for assisted support
• Including support in the basic subscription for a cloud service, but charging a separate fee for more responsive levels of support

Freemium models are great for support because they bring support organizations closer to the core of the company strategy, at least if you grab the opportunity to participate and even lead the process.

If free support = crappy support and “real” support materializes only for the paying customers, customers will naturally pay up, right? Well, not necessarily. Customers may be suspicious of the quality they will find beyond the fee gate, and they may also resent a vendor that pretends to provide a service that is not really usable.

Is it ok to place limits on free support? Absolutely! Actually, it’s better to place tight limits on what you deliver and deliver a great experience within these limits, rather than to make grandiose claims that you cannot meet. It’s always better to under-promise and over-deliver.

There are many ways to set limits for a free service. A good place to start is to  look at your competition: if it is offering some level of free support, chances are you will need to follow suit. Alternatively, be bold and make the free support your unique advantage. Be careful about your early promises: support is forever, so don’t promise more than you are willing to sustain for the long run.

Here are common scenarios for free support

• Limit free support to self-service — but then you must provide great self-service, with an attractive and functional website, a solid knowledge base, and a search engine to match.
• Prioritize paid customers’ inquiries over others — but you must provide reasonable turnaround times to non-paying customers, say under 24 hours.
• Cut off free support for evaluations after a set period of time — but be terrific during that limited period.

All three scenarios make a reasonably good to excellent distinction between free and premium support. The squishier one is the middle one, but clearly-defined response times would solve the problem. The idea is to clearly demonstrate to customers what they are getting and not getting with free support.

What customers will need  and how much they are willing to pay for the service determines the success of fee-based support. Who are your power users and what will motivate them to pay for support? The more you can find out about higher-end users the better able you are to define attractive packages and pricing.

Since your goal is to sell support (or an underlying service), there is a tendency to put down the free offer, or to make it so measly as to force any serious user to upgrade to a fee-based level. I find it much more compelling to present the free support on an equal footing. It may be less ambitious, it may be limited in some important ways, but it’s just as valid a support offering as the other, fee-based ones.

I will gladly agree that all support organizations need great self-service, as self-service delivers both productivity gains and great customer satisfaction, but it’s even more true in a freemium model so:

• build great content
• offer a superior online experience
• look for 1:n support possibilities, in particular communities

If you are beginning to worry about your pennies, you are absolutely right. One of the challenges of freemium is how to fund the free support part of the equation. If you intend to fund all of support on the fees contributed by the premium customers, you are hobbling the organization and will likely fall into a pattern of delivering crappy free support (point #1) and positioning against it (point #4) — so not playing a fair freemium game. Instead, right on the start, establish a reasonable funding mechanism for the free support you provide. It could be based on the size of the customer base (best) or the volume of inquiries or self-service sessions, with regular recalibrations as volume mounts and per-transaction costs decrease, but it should be based on some agreed-upon formula.