Jacques Mattheij

Technology, Coding and Business

Grandfathering

As you progress towards optimal conversion you may find that you’ve made a mistake in the past.

Mistakes that have happened in a traditional business are usually easy to correct, sales have been done or not, and those that haven’t can be done under different conditions.

But in the freemium model, once subscribers are on board they expect to be given that level of service, support and other forms of attention at the pricepoint agreed upon for an indefinite period of time.

These ‘early adopters’ (or at least, earlier) can not be simply discarded when you find out that you’ve made a commitment that is not so good, neutral or even a loss to your company. You’ll need to find a way to ‘grandfather’ these old users in to the new situation where the loss is mitigated as much as possible under the old conditions, agreed upon when they came on board.

One way to do this is to treat this situation as yet another freemium-to-premium transition, only this time the customers are already known and ‘on board’. This is called an ‘upsell’, in concrete form, let’s say you have a hosting company that sells people storage and bandwidth, you could make payment at the higher rate a must for telephone support.

That way the users can continue at the level they’re at as long as they do not increase your costs, but as soon as they do they’re nudged towards payment at the higher rate. That’s a good strategy because it will help close the sale, the user will see an instant benefit from their payment.

In the introduction we already mentioned how not to do this, here is a textbook example of how you deal with a situation like this:

https://support.zendesk.com/entries/174769-introducing-new-features-new-starter-plan-and-new-pricing

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