Free, freemium or paid only: deciding where to start

One of the first big decisions for a new membership is whether anyone gets in for free. Some owners open with a free level so people can try things out, then invite them to upgrade. Others charge everyone from the start and use public content to attract members. A few give the membership away entirely and earn money some other way. Each approach can work, but they lead to very different businesses, and switching later is harder than it looks.

This is a decision about your launch, not forever. The question is which starting point gives your membership the best chance of reaching a healthy number of paying members without burying you in work.

Three starting points, defined

• Free: anyone can register and access everything at no cost. Income comes from something else, such as sponsorship, advertising, events or products.
• Freemium: a free level with limited access sits alongside one or more paid levels. The free level is designed to lead people toward paying.
• Paid only: membership requires payment from the start. You still publish public content for marketing, but there's no free account.

“Paid only” doesn't mean hiding everything. Almost every successful membership gives away plenty of useful material in public, and keeping your best content out from behind the paywall is how many of them get found. The question here is whether visitors can create a free account, not whether you publish free content.

What a free level does well

A free membership level lowers the barrier to trying you out. Someone who isn't ready to pay can still register, sample the experience and get to know you. That brings real benefits:

• You collect email addresses from people who have shown genuine interest.
• People experience the quality of your work directly, rather than taking your word for it.
• A community can reach a lively size faster, which matters when conversation is the main attraction.
• You can watch what free members use most and learn what they would likely pay for.

What a free level costs you

The costs are less obvious, and they tend to arrive after launch:

• Support and moderation. Free members ask questions, need password resets and post in forums, just like paying ones.
• Running costs. Email sending, storage and software fees often grow with your total number of accounts, paid or not.
• The good-enough trap. If the free level is too generous, many people never need to upgrade.
• Divided attention. You end up serving two audiences with different expectations, and marketing constantly to the free group.

Free members aren't a problem in themselves. The problem is treating a large free membership as success, when what pays the bills is the paying one.

The case for paid only at launch

For many new memberships, starting with paid only is the simpler path. Everyone inside has made a commitment, so they tend to show up and take part. You have one audience to serve and one message to market. And every sign-up proves that someone values the membership enough to pay, which is exactly what you need to know early on.

The worry is that people won't pay without trying first. That's a fair concern, but there are other ways to reduce the risk for a new member, such as a short trial or a guarantee. Weigh up free trials against money-back guarantees before assuming you need a permanent free level.

If you choose freemium, design the free level on purpose

A good free level is useful but deliberately incomplete. It shows people what you do and leaves them wanting the next step. Consider a hypothetical trade newsletter for independent bookstore owners:

• Free level: a weekly summary of industry news, the latest three articles and a monthly open question thread.
• Paid level: in-depth analysis, the full archive, downloadable planning templates and the members' discussion group.

The free level delivers the what; the paid level delivers the how and the depth. Now a simple illustration with round, made-up numbers. Say the newsletter builds up 2,000 free members, and one in forty upgrades at $15 a month. That's 50 paying members and $750 a month. The owner then has to ask whether serving 2,000 free members is worth $750 a month, or whether the same effort spent marketing a paid-only membership would do better. There's no universal answer, but it's worth doing the sum before you commit.

If you do launch with a free level, map out exactly what it includes alongside your paid levels, as described in planning your membership levels before you set them up.

Questions to help you decide

1. Is community the main thing you sell? If so, a free level can help it reach a lively size sooner.
2. Can you clearly separate free value from paid value without making the free level feel pointless?
3. Do you have time to support and market to free members as well as paying ones?
4. Would a trial or guarantee reduce people's risk just as well?
5. Does your income come from paying members, or from something that grows with total audience size, such as sponsorship?

Where to start

• Write down which of the three models best fits your answers above.
• If paid only, list the public content you'll use to attract members.
• If freemium, write a one-line description of the free level and the paid level, and check that the difference is obvious.
• Estimate the cost of supporting free members, in both time and money.
• Pick a point, such as three months after launch, to review the decision with real numbers.