How we approach freemium

Up: § 2023 Shareholder Letter Index

There’s a lot of conflicting advice out there on how to approach freemium and whether to have a free plan or just offer a free trial.

For us, our choice to offer a free plan is more philosophical than purely tactical. Where others may experiment and go with whatever they find gives them the most growth, we are making a fundamental commitment to serve those early in their journey. There’s no better way to serve creators and entrepreneurs starting out than to have a great free plan.

Having a free plan is also a long-term decision. One way to think about a free plan is an unlimited time trial. Of course, restricting the timeframe of the trial will lead to more new paying customers in the short term. Over time, however, you’ve lost those people who could gradually build a habit using the product, see value from a free offering, and grow their project or business to the point where they are in a position to pay for a tool. We want to be there for customers at every step of the way, and we’re making a bet that by taking care of them early on for free, they’ll choose us when they’re at the next level in their journey. We’re privileged in being able to take a long-term approach here, and we’re confident that the results will compound over time.

During 2023, we started a process of auditing and improving our approach to freemium across all of our tools. Our goal is to have a freemium model across all aspects of the Buffer product, where some portion of most value is available on the free plan. Unless the functionality is truly more advanced in nature, we’d like to include it on the free plan. We’ve found over many years that letting people actually use something (with a usage limit) is a more effective way to show people the value of upgrading than paywalling functionality entirely. This isn’t reflected across all our product yet, but over time, we’ll gradually make changes so that Buffer holistically reflects this strategy.

One other learning I’ve had with freemium is that if you stop investing in the free plan, it will become less effective. It sounds obvious, but it’s so easy to fall into the trap of starting with a strong free plan and then, after a few years, only improving paid plans. We’ve seen a lot of changes in social media over the years, and the world has become a lot more comfortable with a variety of media types and functionality (just think about Instagram with stories, reels, stickers, trending audio, etc.). As users become more comfortable with a wider range of functionality and variety of social networks, our free offering needs to reflect what is available at this baseline natively on the networks.