Tuesday, April 21, 2009

Limited Paying Customers

If your building a niche product and using either the Freemium or the Freegrade business model, this might be an interesting strategy to quickly convert your non-paying users into paying customers and charge a premium while your at it.

The idea is to limit the number of paying customers you will accept for your niche product. For example, if your targeting a very small niche, you could limit the number of paying customers to something like 99.

That way:
  • The non-paying users feel a sense of urgency to convert into paying customers, and
  • making it exclusive means that you might be able to charge a premium and maybe in return also customize the software for the paying customers.

If your familiar with the psychology of persuasion, then you'll recognize this as an applications of the principle of scarcity .

I came up with this a few days ago and haven't come across anyone doing this yet, but I have a feeling it will work because:
  • I think you can make more money by doing less, and
  • doing less per product, frees you up to build more niche product to improve your odds of success.

Think it'll work?


Some References:

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