Free Tools: How to Integrate a Freemium Model in Your Sales Strategy

Free Tools: How to Integrate a Freemium Model in Your Sales Strategy

A chat with Ben Sailer, former Director of Inbound Marketing at CoSchedule

It's almost impossible to invest in a service or software these days without encountering the freemium model. The freemium model acts as a link magnet that gives customers a free taste of your offering so they become invested before they hit “buy now.”

There are many approaches to the freemium model, including free trials, free consultations, and free tools. Free tools are a particularly compelling link magnet — but unlike an actual magnet, you can't guarantee they will attract anything,

So, how do you design a tool people will love and integrate a freemium model into your brand strategy? 

Recently, MediaBerry sat down with CoSchedule's former Inbound Marketing Director Ben Sailer to answer this question. 

Our chat covered how to build a great tool, where tools fit into new and established marketing strategies, and what customers want in free tools. Ben also shared some great tips for brand owners, and I'll pass them on in this article. 

Let's go!

How free tools can drive sales 

Building a free tool takes time, effort, resources, and money. As many brand owners are rightfully hesitant to invest in free tools without justification, let's quickly touch on how they can help increase sales. 

1. Passively build an audience 

Every business owner knows that generating valuable leads is one of the hardest parts of selling a new product. 

Research on 400 salespeople from Sales Insights Labs shows that only 66.7% of respondents spoke with more than 250 leads a year. As the same research shows that only 50% are a “good fit,” salespeople spend a lot of time chasing the wrong prospects.

Time is valuable, and creating a free tool will help you use it wisely. With some elbow grease and clever marketing, you can turn your free tool into a lead generation machine that will passively build you an audience of potential customers. 

2. Promote your skills and offerings 

Have you ever watched a YouTube video and looked away deliberately when ads started to play? So have most people. Many advertisements are loud, intrusive, and overly promotional, and it's easy to get sick of them. 

Free tools help you cut through the noise and make a connection with customers without coming across as too promotional. 

When leads use your free tool, you bring value into their lives. Your tool might enhance their daily routine, transform their work, or help them solve a problem. Essentially, you do them a favor. That favor nurtures a relationship that's far stronger than the one the lead could have built with a sweaty man on a 30-second TV ad yelling marketing buzzwords at them. 

Like the TV ad, leads learn your offering's features, use cases, pricing, and benefits. But unlike the TV ad, leads will pay attention. 

3. Work off existing demand 

Until you launch your offering and see your sales figures increase, there is no surefire way to know people will purchase it. However, launching a free tool can give you a chance to test for demand. 

We touched on this topic with Ben during our chat, as it's something CoSchedule knows well. CoSchedule launched a free tool known as “Headline Analyzer” in the brand's earlier days. Headline Analyzer was successful relatively quickly, as it offered unique benefits other headline-oriented tools couldn't match. 

Coschedule headline analyzer

Eventually, CoSchedule integrated Headline Analyzer (now called “Headline Studio“) into its core CoSchedule Marketing Calendar. 

Coschedule headline studio

If you launch a bare-bones free tool and find footing with a user base, it's a green flag that people may be interested in a paid version of the tool. Then, you can proceed knowing you have a dedicated audience for your product before you make your first sale. 

Strategies to create high-impact free tools

Now you know why free tools are valuable, but how do you make one?

MediaBerry specializes in link–building and marketing, not programming — so I can't advise you on coding. However, I do have some insights fresh from our chat with Ben. I'll share those in this section. 

1. Make it user-centric from the start

The freemium model switches the roles in a typical customer-brand relationship around. Usually, the customer gets the benefits of an offering after investing, but in the freemium model, those benefits come before the investment. This dynamic puts the needs of the customer first. 

Ben touched on this during our chat, emphasizing that while it might feel counterintuitive to give value away for free, it builds the foundation for a long-term relationship. 

“You kind of have to put something else first like your customers or your users. I mean, it sounds counterintuitive, maybe feels counterintuitive, but it works.”

Additionally, offering customers value and putting them first shows your product's real value, as customers know you are banking on them liking the tool enough to purchase it. 

Have you ever bought a subscription to software that looked good, paid in full, then realized the software didn't work as advertised (hence why they required total payment upfront)?

Offering a free tool tells customers, “we aren't trying to trick you. We know our tool is so good you'll pay for it even after trying it.” 

There is no secret to prioritizing customers. You can't fake genuine care and interest, and if you try, customers will realize it's a gimmick quite quickly. 

To make your tool customer-focused, actually ask customers what they want. 

Gather loyal customers (if possible) or a group of people who fit into your target audience. Ask them about the pain points and challenges in their lives, and look for trends. You won't be able to address all their issues, but you might find an idea that's feasible, financially viable, and potentially monetizable. 

Then, consult your market research group and ask for areas you could improve during the tool-building process. Additionally, watch how people interact with your tool once it's live. Look for:

  • Areas people commonly visit with a heat map
  • Bounce rate 
  • Things people click on 
  • Common use cases 
  • How people commonly use the tool in an average session
  • Popular and unpopular features

2. Create a tool with sustainable value 

MediaBerry’s discussion with Ben briefly touched on free tools vs. other link magnets (like eBooks and content marketing). 

He brought up the idea that eBooks have “really suffered from kind of becoming just like a race to the bottom.” He further elaborates that “we've all downloaded eBooks that were trash.”

The issue here is that brands don't always build eBooks to provide sustainable value. 

For example, he says that he has seen ebooks with blog post text, a quote from an influencer, and an image.

“It's literally not worth the click to unsubscribe from this company, you know,” he says, “you feel like your time was wasted.” 

The same lessons apply to building a free tool. If you create a free tool with only short-term value, users will move on to something better. 

The trick to offering sustainable value is to create a tool that won't become redundant or useless in 12 months. CoSchedule's Headline Analyzer is an example of this. The brand launched this free tool several years ago, yet it would still be relevant and valuable if they launched it today. 

You can ensure the longevity of your tool by starting with a timeless concept and working to maintain and update it gradually. 

Take this mortgage calculator from mortgage broker firm Hunter Galloway as an example. 

Hunter Galloway mortgage calculator

Source: Hunter Galloway

The concept is timeless (people will always need mortgages), and the tool can be adjusted easily. Annually, the brand can simply adjust the calculations behind the tool to account for shifts in state and federal property laws and changes in the behavior of major banks. 

You may notice that Hunter Galloway's tool is also well designed and visually appealing. Though you don't need to create something polished and perfect-looking, design plays an important role in how people perceive value.

A study on 612 people from Clutch shows that 83% of people like it when a website is attractive and up-to-date. Additionally, website visitors judge brands' credibility and professionalism based on design choices.

Paying attention to design is wise because you can easily adjust it to give your tool a facelift. For example, you can alter the layout, colors, fonts, and pictures to make your tool look as good as new. 

3. Showcase your commitment through effort

It might be tempting to cut corners to save money and time, but doing so may cut you off from leads.

Let's go back to the bad eBooks for a second. When some brands create eBooks, they try to produce something that will rank well and obtain email addresses from as many people as possible using current trends. So, they build an eBook quickly.

However, they don't consider that a lack of effort will annoy people, make them feel deceived, and waste their time. 

To this point, Ben says:

“Those people might not come back to you ever, like whether or not it's rational. Your product could very well be better than your next five competitors. But if you just left a bad taste in people's mouths, they're probably going to go to someone else first.” 

Every brand and tool are different, but there are some common red flags between poorly constructed tools. These include:

  • Poor navigation. People can't get value from your tool if they can't navigate between features and pages smoothly. Navigation is also one of the biggest influences of a visitor's experience — 94% of Clutch's study participants described it as the “most important website feature.” 
  • Slowness. A study of 3,700 people by Google shows that people abandon websites 53% of the time when a website takes longer than three seconds to load. 
  • Dead links. Dead links show that you don't care enough about your tool to update it regularly. 
  • Features that don't work. Broken or incomplete features show a lack of effort. They also mislead users who may have signed up for a particular feature. 
  • Mobile incompatibility. As of late 2021, mobile traffic accounted for 54.4 % of internet traffic. Thus, over half of your website visitors may not be able to use your tool if you don't make it mobile-friendly. 
  • Poor design choices. Inaccessible fonts, pixelated images, and bad layouts indicate that you didn't polish the tool before publishing it. 
  • Mistakes. Spelling, grammar, and continuity mistakes make your tool look unprofessional. Make sure your written content is high-quality (for tips, read, “Content Writing Guide, How To Write Good Content”).

Alternatively, there are some green flags of a good tool — professionalism, well-thought-out features, and attention to detail. 

If you want to see these in action, visit imisstheoffice.eu by Kids Creative Agency. This cute little tool lets you create an office-like landscape with familiar workplace sounds. The tool is pretty straightforward, but it's polished, functional, and works well. 

IMissTheOfficeEU tool

Source: imisstheoffice.eu

4. Be conscious of your resources 

In August 2016, Hello Games released the video game “No Man's Sky.” However, people were immediately disappointed when they realized developers hadn't delivered all the features initially promised. 

No Man's Sky is now a very popular and successful game, but there's a lesson you should learn from it: think carefully about your resources when deciding whether to build a tool. 

If you have an in-house team or a key person who can build free tools, the benefits of building and releasing one may outweigh the costs and provide a healthy Return On Investment (ROI). 

However, if you need to outsource development, hire a specialized team, or shift resources from revenue-generating projects to build a robust tool, consider whether it's worth it. 

As Ben says:

“I think before you do anything else, you probably need to be really confident that the opportunity exists… because if it doesn't, and this is something that we've learned, free tools can flop pretty hard.” 

Ask yourself:

  • Can (brand) survive financially if the tool does not generate any revenue?
  • Could we make a robust, useful tool with our resources right now? 
  • Does (brand) have other ways to generate leads if it takes a long time for the tool to draw people in?
  • Are there other lead generation avenues that are better suited to (brand)? 
  • Will people pay for subscriptions to our tool?

If you choose to build your tool, you need to make sure you can create something professional and high-quality with your current resources, budget, and time constraints. Otherwise, your tool may only push leads away. 

5. Ensure the market demand exists

Without a crystal ball or a time machine, there is simply no way to know for sure that users will get value from your tool. However, their chances of liking the tool will be much higher if you create something with current market demand.

When thinking about the types of tools you could create, research competing tools and note the features they include and their problems. You want to land on an idea that introduces something new to a market with few alternatives. 

You also want to consider the tool's Unique Selling Proposition (USP), or the “thing” that makes you stand out from competitors. For example, maybe you want to take an existing idea with demand and re-shape it for a new audience. That's the pitch of the free tool Walk Score. 

Walk Score looks at people's local areas and rates the liveability of the neighborhood based on schools, amenities, parks, and shops. Walk Score is free and mirrors many expensive tools available to real estate agents and solicitors. Its USP is that it gives previously private information to the public for free. 

WalkScore webpage

Source: Walk Score

Note: No matter what type of tool you build, talking to potential users is vital. Build an elevator pitch for your idea and ask them if they would get value from the tool. If people don't say “yes” to your pitch, they certainly won't click “sign up” when you launch it. 

6. Engage with your customers beyond the tool

Recently, Ben started using a tool created by a new startup business to see if he could get any value from it. After a while, the startup sent Ben a survey asking how satisfied he was with the tool. He gave it a six out of ten, and to his surprise, a person from the startup responded personally to ask for detailed feedback. 

This type of commitment is uncommon but very valuable. Engaging with your users creates a one-on-one connection people won't forget. 

Of course, large brands with hundreds of leads can't take the time to speak to each one. But there are alternatives: 

  • Offer users exclusive deals 
  • Set up an in-app module for users to leave detailed feedback and suggestions (and reward people who provide feedback!)
  • Add a forum feature to your tool for people to discuss problems 
  • Run giveaways or contests to get users involved 

You could also set up a brand group. Brand groups are spaces for users to share feedback, chat, help each other with problems, and share successes. You can use brand groups to share how-to guides, tips and tricks, and updates about your tool. 

One company that uses a brand group is Canva. The Canva Design Circle (hosted on Facebook) currently has 223.6k members and averages 75 new posts daily. People share their designs, ask for feedback, and troubleshoot issues inside the group.

Canva's Facebook group

Source: Facebook

As this is our final insight, I also just wanted to clarify something — your free tool is part of your marketing strategy, not the whole strategy. 

Every form of contact you make with users is marketing, so approach it as such. Similarly, don't get hyper-focused on your tool. Use other forms of outbound and inbound marketing to attract leads. 

Challenge: what if the money isn't coming in?

Towards the end of our chat with Ben, the discussion went to an interesting place. Say you create a free tool, launch it, and find users for it, but your hard work doesn't translate into profit? 

On this, Ben notes that the time between someone trying your free tool and making a purchase can be “really really long.” He also mentions that if someone is trying your tool, they are likely using competitors' tools, too. 

But, he notes, you can overcome these challenges by tweaking your freemium model:

“Something that you can do is increase the amount of value in that tool, but then create a tier that's paid.” 

This shift changes how your tool fundamentally operates (and thus, how people respond). Before, the tool was an accessory, but now it's a service. 

Ben notes that you have to manage this shift carefully.

“Once you start charging people money, the experience needs to be more polished.”

You'll need to tweak the tool's design, resolve any obvious bugs, and maintain the tool well.

Ultimately, Ben says you need to think of your tool as a test. If it isn't paying off, you may need to switch gears to something else with more potential. Or, if it is working but not paying just yet, it's time to push harder. 

Data and automation are key in pushing harder in the right direction. 

If you add a paid tier to your tool, you need to carefully measure the number of people who upgrade from the free version to the paid version. Then, you should use this data to test what makes people convert — pop-ups, targeted discounts sent via email, a banner that reads “free trial nearly over,” etc.  

Though Headline Analyzer was successful quickly, CoSchedule still took this approach. The team learned what made the Headline Analyzer successful and used that information to turn it into Headline Studio (a product people still use today).

CoSchedule's winning strategy

We've touched on CoSchedule's Headline Analyzer tool a few times already, but how does CoSchedule's freemium marketing model work?

CoSchedule's co-founders Garrett Moon and Justin Walsh launched CoSchedule as a WordPress plugin back in 2013. They originally built the tool for their marketing clients but later released it to the public. CoSchedule reached 5,000+ customers in 2015 and has grown dramatically since. 

Today, CoSchedule's core products include its Marketing Calendar, Marketing Suite, Headline Studio, and Actionable Marketing Institute. 

CoSchedule services

People sign up to use a basic version of CoSchedule's SaaS (Software-as-a-Service) products. Then, they can upgrade to the “Pro” plan or a “Business” plan to unlock extra tools and features. This strategy has worked very well for CoSchedule, as CoSchedule currently serves a customer base of 30,000+ marketers in 100+ countries. Many of these marketers come from big brands, including Forbes, Yamaha, Walgreens, and P&G. 

Embrace the freemium business model

Building a free tool requires a lot of time, money, and resources. Naturally, it's not the lead magnet for every brand. However, if you want to build an audience passively, subtly promote your offering, and capitalize on demand, it might be the strategy for you. 

Our chat with Ben taught us several key things you need to know to build a great freemium strategy:

  • It needs to be customer-centric 
  • It must be sustainable long-term
  • You must be resource-conscious
  • Look for market demand carefully

And, of course, a tool's design, usability, and features are key to its success. 

Thank you to Ben for joining us for a chat, and thanks to CoSchedule for its insights on SaaS freemium strategies. If you're interested in managing your marketing smartly, check out CoSchedule's Marketing Calendar here

Or, if you are interested in growing your brand's marketing reach with link-building, reach out to us at MediaBerry

Michael Rarick is the CEO and Director of Sales at MediaBerry. His mission is to help SaaS companies grow their market share through white hat, relationship-based SEO. Connect with Michael below!

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