Hi Guys, I have a case to work where it goal is to develop a freemium model for a SaaS product & one has to decide which features should be "free" & "premium"
What kind of MECE structure/framework can one use to decide the feature in "Free" & "paid"?
I have tried to brainstorm on this but reached a dead end. Any thoughts?
(edited)
Hi,
I recommend using the Product Development frameworks. They include the analysis of companies vision and strategy, customer segments and needs, etc. You can find a lot of product frameworks in the following books:
The first 3 books are very famous and commonly used to prepare for such interviews
Best
Well, your framework here needs to be how you evaluate each feature.
So,
Value of product as "Free" offering
vs
Value of product as "Premium"
For each, you need to measure:
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
Hello!
I would not advise you to think about this leveraging frameworks, but to think about it in your own terms.
I would try to create a score system, such as a table, in which I would list as rows all the different features. Then, as columns, I would measure different KPIs that are key for a customer, such as:
Then, I would give a score to each feature in each of the different KPIS.
With that score, you can prioritize them and see for which ones you want to charge and for which ones not, which ones to use as a hook, etc.
Hope it helps!
Cheers,
Clara
Dear A,
in general a good structure can be evaluated by a certain depth and breadth. The “depth” should be at least 3-4 levels while the “breadth” should cover the entire solution space. You can cross-check this with the MECE principles (For details see respective article on Preplounge), but the CE (collectively exhaustive) part is basically defining your breadth.
Finally, make sure to check for inter-linkages in your structure and point them out.
Simon
Exciting case! Since you're analysis this on a feature leve, not a product, level, I'd map out each feature across two dimensions: Importance for basic app usability and customer excitement (translates to willingness to pay). That way, you can make a decision in a 2x2 for each feature individually.
If there are featues that you identify as high/high (shouldn't be too many, as customers won't get very excited about a table stake), you can either make them freemium or start premium and then offer then as promotions for free. E.g. social media raffles, referrals bonusses, etc.)
