How would you structure a freemium SaaS case?

I'm working on a SaaS case where the client needs to decide which product features should be free and which should be premium. What would a sensible MECE structure look like for deciding where each feature belongs?

Ian’s Answer

Well, your framework here needs to be how you evaluate each feature.

So,

Value of product as "Free" offering

Value of product as "Premium"

For each, you need to measure:

Quantity of consumers i.e. likelihood of bringing in customers
Value of customers i.e. how much they're paying
Stickiness of customers i.e. likelihood of preventing them from leaving

So, free has the benefit of bringing in new customers (which you have to value at a certain rate), which have a x % probability of buying premium products, BUT may free-ride

Premium has the benefit of earning more money per customer BUT preventing certain users from entering the platform.

Free = Drives Quantity

Premium drivers basket size per customer

You want to maximize this equation/combination

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How would you structure a freemium SaaS case?

Ian’s Answer

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